Edward P. Crotty, CFA, Chief Investment Officer and Portfolio Manager, Davidson Investment Advisors
As technologies offer new and faster ways for people to “connect” and communicate, the world is experiencing a growing trend toward self-selected isolation, automation and even an outright preference to avoid human interaction. As a result, service and convenience are increasingly viewed as “better” when the person requiring service does not have to actually deal with another human being. In fact, many of the companies with the highest-rated customer service are now technology companies that use little, if any, personal contact in their work with customers.
The rapid growth in ecommerce is just one indication that many people prefer to shop online to avoid both the crowds and special trips to brick-and-mortar stores. Person-to-person conversations have given way to texts and interaction on social media through tweets, “likes,” Snapchat pics, Facebook posts and more. Many people prefer binge-watching media on personal devices to the more group-oriented and traditional practice of watching prime time TV with the family. Use of personal devices has become so ubiquitous that in February 2017, The Times of London reported that a Dutch town was installing street lights and signs at ground level to help keep phone-obsessed “zombie pedestrians” from accidentally walking into traffic.1 Other cities are showing interest in the same idea, as this trend of self-involvement and fixation on personal devices only seems to be growing.
At its advent, the Internet was seen as a great equalizer, in that all users globally had access to the same content. Now users tend to be fed content determined by personalization algorithms — no need to compromise with the “Internet of Me.” The Internet has the power to make the world smaller, but it also risks making each of our worlds smaller.
Finding investable opportunities around trends such as this one can be difficult, and is important to consider a company’s valuation, competitive positioning and ability to execute a business in response to a new and changing environment, among other factors. We believe the ability to both seek exposure and manage the risks around themes like this in your portfolio can be efficiently and thoughtfully handled through professional active portfolio management. A financial advisor can help you evaluate such opportunities and seek solutions for your unique interests and financial goals.
1 http://www.thetimes.co.uk