The burden of pain
I try not to spend too much time talking about economics on the blog; I'm often reminded of the description of philosophy being a pursuit for people with 'too much time and not enough to do with it'. The field of making predictions in economics strikes me as much of the same sometimes; in fact, I often wonder if philosophy derives more worth from its contemplative and numinous aspects. On occasion, though, I strike upon a thought which tempts me to indulge - to cast aside my better judgement and put finger to keyboard on something which does pique my curiosity about the future. Since this is an investing blog, it is - naturally - related to investment. I'll throw my musings out there, some potential equity 'plays' and my esteemed readers can judge the validity of the logic for themselves.
Here's my basic principle, then - the Internet is siphoning trade from the high street. Individuals have bought more and more of their everyday goods from the internet over the last decade, as the efficiency - and therefore cheaper prices - that online operators (like the behemoth itself, Amazon) can bring lures them away from their brick-and-mortar tendencies. I can't remember what the first good to be bought primarily online was; it seems likely to me that it would have been something relatively homogeneous, easy to send/deliver and which requires no physical inspection on part of the buyer. CDs and DVDs seem to fit that bill quite nicely. Now people are buying groceries, celebration cards, phones, white goods... more or less everything is available on Amazon. The limit, simply, is what you feel comfortable purchasing online. Some people, understandably, want to see and touch a product before buying. Some of these people then go and shop online (a lamentable habit, as far as I'm concerned).
Either way, if we accept that the young have a higher propensity to shop online than the old - a fairly undemanding assumption - and that the overall propensity of everyone to shop online is increasing over time, as people become more comfortable with the notion, it paints a pretty bleak picture for the high street. The death of the high street, you hear people lament mournfully, usually while angrily waving their proverbial fist at one of the corporate giants of this world. That's that, then. Where are the investment opportunities here? (more…)