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Hewison Insights
With growth brings change

The times they are a changin’

John Hewison
Founder and Director
10 Oct 2016

Last week Blackberry announced that it was abandoning its mobile telephone business after a strong 32-year stint as the businessman’s best friend and Wall Street status symbol.

It feels like it wasn’t that long ago that Blackberry virtually owned the mobile business on the global stage. If you didn’t have a Blackberry, you would be scorned by your fellow, further advanced mobile business colleagues. It was the ultimate cool accessory in its prime.

So what happened? Pretty much the same thing that happened to the previous market leader Nokia – Apple changed the game! And now owns the game. Samsung is currently Apple’s only legitimate challenger, but its exploding recharger problem might put an end to that.

This sudden and dramatic change of fortune for Blackberry and Nokia has become increasingly common over the past couple of decades across many industries. Other famous brands have met their demise through their failure to keep pace with change include Kodak, Encyclopedia Britannica, and Sony Walkman.

Unfortunately, printed newspapers, street directories, book publishing and retail, fixed line telephones, cheques and postal services are all headed the same way – with most already there. Disruption is everywhere and the products and brands we know and love are dying. Remember video cassettes and players, video hire outlets, tape cassettes and players, movie cameras, bookstores and telephone books?

With growth brings change – now we just “Google” everything, or use “Google Maps” to get directions, connect with people via Facebook, Messenger or LinkedIn. We just don’t call people on the telephone or write letters anymore, we video-chat via Skype or WhatsApp – we email, text or tweet.

Technology has endless possibilities. Take for example the emergence of digitally-printed, three-dimensional objects – this will revolutionise manufacturing and engineering, not to mention medicine with the creation of human body parts.  

This led me to start thinking about investment and the emergence of the successful companies of the 21st century, recognising those industries and companies that have a dubious future. Where will the next opportunities arise? Where will change have a major impact?

This certainly adds a new dimension to the world of investment analysis and management. Trying to recognise the next ‘big thing’, is now more important than ever, as change is increasingly fast-paced, as are the ramifications. Therefore, business analysis based purely on past performance is fraught with danger depending on the industry and the potential for change. You must continue to evaluate each business on its merits. Look at the track record, the fundamentals, and the forward earnings expectations, to determine the long term viability.

Further, we cannot succumb to the idea that technology and or innovation alone will define a company’s success. Though it will certainly help to deliver efficient services, there are always pitfalls that should be considered, and there’s always someone looking to create the next big thing.

The information provided above is general information only and individuals should seek specialised advice from a qualified financial adviser. Please contact Hewison Private Wealth for more information.

Hewison Private Wealth is a Melbourne based independent financial planning firm. Our financial advisers are highly qualified wealth managers and specialise in self managed super funds (SMSF), financial planning, retirement planning advice and investment portfolio management. If you would like to speak to a financial adviser on how you can secure your financial future please contact us 03 8548 4800, email info@hewison.com.au or visit www.hewison.com.auPlease note: The advice provided above is general information only and individuals should seek specialised advice from a qualified financial advisor. The views in this blog are those of the individual and may not represent the general opinion of the firm. Please contact Hewison Private Wealth for more information.