Finance Sectors Projected to Grow
There is a saying that “hindsight is always 20/20”. It might seem obvious what that means – but the point is that everyone can look at the past and be able to elaborate on why certain events transpired, rather than actually understand the future and what will happen in the world of finance in the future. For example, there were certain individuals that were accumulating Bitcoin when the price was well under $1000. For example, Tim Draper, the legendary venture capitalist, had the foresight to purchase 30,000 Bitcoin years ago, predicting that the digital asset would rise in value. Draper was actually correct about this assumption, which only adds more to his overall legacy as an investor.
The truth is that while there are certain people that make very smart investments, it’s not as if we can always predict industry trends or the importance of certain products, patents, or companies. However, that doesn’t mean that there are smart investors that notice either money flow or industries with an immense amount of potential. Every smart investor wants to get to a sector “before the money”, so that they can invest in companies that might be undervalued, but in a great position to grow over the years. This is similar to real estate investors that might target a certain neighborhood before it gentrifies, for example, and the real estate prices go up. Here are some sectors that many believe will grow in the coming years.
It’s hard to believe how much the attitude of individuals has changed with regards to marijuana. The drug was once vilified tremendously in movies such as the 1936 propaganda film Reefer Madness, where the movie attempted to claim that marijuana can lead to hallucinations, suicide, and overall deterioration of mental health (hence the “madness” portion of the title). There is even a movie titled Marihuana that attempts to suggest that using marijuana might eventually lead to heroin addiction and attempting a kidnapping.
Of course, we now know that many dismiss this as propaganda and that more people than ever are in favor of marijuana legalization. In fact, a national majority supports the idea, and may even compare it to same-sex marriage in terms of “progressive” ideas in the political sense. The rise of the 1960s and 1970s counterculture, where marijuana was openly celebrated, obviously played a role. However, in general, many wonder why marijuana is illegal when no one has overdosed on the drug. When one compares marijuana to cigarettes and alcohol, both of which have been directly linked to death – it’s easy to see why Americans have altered their perspective regarding marijuana. Even Sanjay Gupta, a chief medical correspondent for CNN, stated in 2013 that we have been “systematically misled” with regards to marijuana and its risks.
Of course, that represents a huge economic opportunity in the finance world. Take the example of Colorado. Marijuana sales exceeded a billion last year in a record amount of time, which meant hundreds of millions of dollars in taxes for the state.
The truth is that while many have attempted to stereotype marijuana users, the truth is that there are many individuals all over the world using marijuana for various reasons. There might be artists that believe it helps with their creativity, business executives who believe that it helps them relax, and of course, others who believe it helps with their medical conditions.
While retail overall might be suffering, many point out that the demand for marijuana is only growing. The numbers certainly support this theory. At U.S. dispensaries in 2018, spending exceeded over $10 billion, which is a big jump from $8.6 billion in 2017 and $6.6 billion in 2016. The industry now employs over 100,00 individuals in the United States alone.
There are clearly opportunities now for companies to brand themselves, and more trends that are growing with regards to marijuana, such as hash oil and edibles. Nancy Whiteman is the founder of Wana Brands, and she believes that the changing attitude towards marijuana means that many consumers are more comfortable with purchasing marijuana than ever. She states: “I think there has been sort of a stereotype that the cannabis user is a young male,” she said. “The total pie is growing because new people are entering the market.” Whiteman pointed out that her company was evidence of this growth. At the time that she was quoted saying this, Wana Brands was on its way to 25% growth in 2018.
Thanks to modern technology, there are now new ways to create content than ever. Podcasting has grown tremendously, thanks to extremely popular podcasts such as The Joe Rogan Podcast, which boasts over 4.5 million subscribers on Youtube. While there are many podcasts that do not ultimately become successful, the truth is that the most successful podcasts have quite a growth rate and an audience that rivals some of the most popular TV shows in the world.
We all know that the attention spans of individuals are shortening, and advertisers understand this. Of course, not everyone simply wants to digest their information in a quick form. There are many companies such as Quartz, that know that people might not have the time to sit and absorb TV, considering all of the constant content and stimulation that they deal with on a daily basis. Quartz, as a result, has seen tremendous growth.
However, the truth is that many people are divided when it comes to their news, and their own biases affect what they watch, and who they believe. In a world where more people distrust the media than ever – we have an economy that tends to reward clickbait. However, the truth is that there are billions of users on social media platforms such as Facebook and Youtube – and users are pushing back against the idea of clickbait on both of those platforms.
In a world where many people are tired of clickbait headlines that are sensationalized simply for clicks, a long-form conversation can truly provide some insight into the thoughts and attitudes of guests. Podcasts such as The Joe Rogan Podcast and The Sam Harris Podcast have taken advantage of this, and the ad revenue for podcasts has never presented a better opportunity. One of the reasons for this is that 85% of those who listen to podcasts listen until the end, which means that ads can last up to 90 seconds, and that doesn’t change the experience, given the fact that the listener is used to listening in long-form.
For those wondering whether certain podcasts are a fluke, one great example of how successful podcasts can be is Pod Save America, a liberal political podcast that was launched in early 2017. For those that want to know more about growth – consider this: the podcast has already been downloaded over 100 million times, and averages well over 1 million listeners per show. As if that wasn’t enough, the podcast has become the flagship podcast for an entire media company called Crooked Media, which now features various podcasts, and has even led to partnerships with huge media companies such as HBO. The company is now home to some of the most popular podcasts in the world, such as Lovett Or Leave It, which features former Obama speechwriter Jon Lovett, and Pod Save The People, hosted by Deray McKesson, a well-known civil rights activist and well-known for his association with the Black Lives Matter movement.
One of the reasons why podcasts present a great opportunity for the finance world is because they now are attracting some of the most famous and impressive individuals in the world. For example, some guests on The Joe Rogan Podcast and Pod Save America have included former president Barack Obama, Twitter founder and CEO Jack Dorsey, Tesla and SpaceX CEO Elon Musk, comedians such as Amy Schumer and Bill Burr, and musicians such as Kid Cudi, Killer Mike, and Willie Nelson. It is obvious to see how, with guests such as these, the podcasting industry is poised to grow more than ever.
That isn’t the only reason why podcasting can grow. It’s perfect for personalization and content creation. If you are only interested in current news? There are already dozens of podcasts about that. Are you interested in true crime? You might be into podcasts such as Serial, which is one of the most popular podcasts of all time and has been downloaded over 300 million times. In fact, the first season of Serial is now spawning a new HBO documentary series.
Even Spotify, which has made major strides in the music streaming world and established itself as one of the most important companies in the music industry, understands that there is a lot of money to be made with regards to podcasting. They strategically picked up The Joe Budden Podcast recently, which is one of the most critically acclaimed hip-hop podcasts in the world. As if that wasn’t enough, Spotify has actually outright acquired both Gimlet and Anchor, two of the most respected companies in the podcast world.
There’s no doubt that podcasts will gain more traction going into 2019, as individuals are yearning to learn more about some of the people that they consider the most interesting in the world. It also allows individuals to “binge” in the same manner as they might with Netflix, as there is always a new podcast that may interest them, and it’s the perfect way to learn while driving on a long road trip, for example. Either way – one thing is for sure: there is a real opportunity for podcasts if you are interested in finance/investment. The right podcast can truly open up a lot of doors.
One of the great things about the world changing and the advancement of technology is that it appears that more than ever, individuals want to reward those who deserve it. This means that finance is now injecting money into companies that actually come up with innovative ways to change the world for the better. While there is no doubt that the bottom line is important, the truth is that many are understanding that a community of customers and consumers can often get behind a company because of its social initiatives. Even Larry Fink, the CEO of Blackrock, an asset manager that handles trillions in assets, has stated: “To prosper over time, every company must not only deliver financial performance but also show how it makes a positive contribution to society.”
One example of a company that is doing this is Loop Earplugs. When you consider that there are over 1 billion people at risk of hearing damage and that there are many that suffer from tinnitus. This is a company that makes earplugs more fashionable than usual and reduces decibels. This can prove to be very important for those who want to enjoy nightclubs, music festivals, and more.
Another company that has gained a tremendous amount of traction is San Francisco-based Brandless. The name truly says it all. There are countless companies that are willing to do everything that they can to gain customers, whether it involves spending millions on advertising or hiring certain influencers. Instead, Brandless focuses on being a “nonbrand” and offering products for the lowest price possible. Their website offers household products for $3 each, meaning that it is able to pass off the money that it saves on marketing/distribution to the consumer. The idea here is that Brandless has partnerships with manufacturers, is able to produce reliable products for their consumer, and is able to pass the savings on to their customer base. As a result, the company provides thousands of meals to those who need it, thanks to a partnership with Feeding America. While there are many causes that individuals might not agree on, it’s hard to disagree that ending hunger is an admirable social initiative.
Another great example of a company that has experienced tremendous growth that aims to have a positive effect on society is the Khan Academy. There are all sorts of information and data describing how education can positively transform society. Education allows individuals to find a role to contribute meaningfully to the world, and prevents many from a life of poverty and/or crime. Salman Khan had a dream that involved educating as many people as possible in the world for absolutely free and established Khan Academy as a result. Khan Academy’s videos have been viewed 1.6 billion times on Youtube, and influential companies such as Google have contributed to its growth.
The idea and trend here are that while every company should be focused on growth, profit, and the bottom line, it doesn’t mean that they need to be extremely greedy. In fact, consumers want to gravitate towards companies that actually are ethical, and have a desire to change the world for the better.
There are certainly companies out there that try to latch on to social causes but are not truly authentic about it or think that hopping on a trend is the way to go. We see it all the times with regards to fashion, music, and the film industry – but the truth is that these trends will truly affect finance in 2019, and aren’t going anywhere anytime soon.
More people than ever are interested in marijuana. Marijuana is no longer something that’s stereotyped as a “party drug” for a college student, as there are grandmothers and grandfathers that openly admit that they believe marijuana makes them feel better, and there is even new evidence suggesting that marijuana and CBD can help with regards to child seizures that have epilepsy. For those who want to deny the demand, consider this: there are now more marijuana dispensaries in Colorado than Mcdonald’s and Starbucks, two of the most successful chains in the world, combined.
There is the quest for soundbites and clickbait, and many who want a “deep dive” on subjects are looking more to podcasts as a new form of entertainment and information, on any subject imaginable. Often times, there are articles and clips that take opinions out of context and tend to paint a “black and white” picture instead of actually delving into nuance. The rise of Crooked Media and the fact that Spotify is entering the space is further proof that podcasting will be huge in 2019 and beyond, and that consumers are yearning for longer and more intellectual conversations and “deep dives”.
While consumers understand that companies want to turn a profit, they also want to get behind a company that is actually doing something good. This means that they want to know that they are helping a company grow that actually wants to help in a meaningful way, while making a profit. The success of companies such as Brandless and the Khan Academy are proof of this. After all, who can deny the power of feeding those who are hungry, and educating those who cannot afford it? No matter who you are or where you are in the world, it’s clear that the social impact of companies will be a huge financial and consumer trend.