I’ve been struggling recently to come up with new investment ideas. While I’ve made my fair share of bad investments over the years I’ve also made some good ones. I’m a big fan of focusing my search initially on a theme, trend or idea. While my favorite shares tend to be reliable dividend paying, income stocks I also like the challenge of trying to unearth some growth gems now and again.
Under The Apple Tree
I was a buyer of Apple in late 2009. Having seen the success of the iphone and envisaged how simple it would be to scale those devices up to tablet size I rightly predicted that it was on the verge of creating yet another new market and establishing early dominance (same as it had done for mp3 players and smartphones). At the time this seemed like an obvious growth buy in point.
I was also convinced it would do as it did with ipods – dominate the high end then gradually release cheaper less functional models (think of the ipod mini/nano) to also mop up the budget end of the market. I guess the plastic iPhone 5c is the first step in that direction for Apple. I wish they’d just hurry up and release the ‘iPhone mini’ and mop up all those millions of disenfranchised Blackberry and Nokia users.
I often smile to myself when I get on the train in the morning and sit opposite the typical commuter. They’re usually about 15 years older than me, are blessed with much bigger bellies than me and almost all of them look much more fed up with the daily commute than me. It’s a daily reminder that I don’t want to be doing this at their age and that I need to make my escape plan happen.
One thing I do have in common with these commuter warriors is that sat on the table in front of almost all of us is the standard weaponry of the city commuter: the work Blackberry, the iPhone and now the iPad (or sometimes Macbook Air). These are the warriors that are turning my Apple investment into a success.
What Next?
I got thinking this morning about how quickly smart phones and tablets have become so widespread. While my Apple investment has done me proud there must be some other ways I can invest and benefit from the proliferation of mobile devices.
Based on my daily train research each morning I’d estimate that about 95% of smart phones and tablet usage is spent either playing Angry Birds or watching iPlayer. So where’s the brass to be made? Well last time I checked the BBC was a public corporation and Rovio Entertainment Ltd (of Angry Bird fame) has yet to make it’s inevitable stock market float. Investing in ARM holdings that makes the processors for all these devices would have been a good one though the secret is definitely out on that one.
I think the way we use these devices will provide the next big growth opportunity. While there is already an app for everything I reckon mobile payments might be a good bet.
My father was bragging to me the other day about how he’d completed all of his Christmas shopping online, without leaving his living room. This is the same man that on a couple of years ago xxx. Hell he even bough his first smartphone a couple of weeks ago.
That just highlighted to me how far online payments have come. It wasn’t long ago that it was only a brave few that risked the odd paypal payment online, constantly paranoid their bank accounts would somehow be cleaned out by some Nigerian cyber pirate.
I suspect in much the same way security was responsible for the initial slow growth in online payments in a recent study by Accenture 45% of people asked who didn’t currently make mobile payments were worried about security. A further 37% were concerned about privacy. As the technology develops and becomes more familiar I’m sure the likes of my old man will soon be powering down the pc and doing their Christmas shopping on their smartphones.
Monitise
So how do I invest in this soon to explode sector I hear you ask. Well I’ve been taking a look at Monitise. It looks like a well run AIM listed company with a broad suite of mobile solutions, particularly banking and payments.
If you believe their Chief Exec they should be breaking even (after a long period of loss making) sometime in 2014. Revenue in the 12 months to June 2013 more than doubled and margins increased. The company have tie ins with both IBM and Visa, in fact their Chairman is the former head of Visa Europe. They have a solid technological base, a flexible suite of products and appear to have a solid management team in place.
The CEO recently stated that their biggest competitors were ‘banks’ own IT departments’. Well I work in a bank and if our IT department is anything to go buy Monitise have nothing to worry about!
Price as of writing on 13-Dec-13 is 53.24p.