THE WAVE OF CHANGE

We all heard of KODAK, once a Dow Jones Industrial Average Index component stock and now defunct.

Below is a comparison of 1991 (25 years ago) DJIA with today. Just look at the component changes:-

Component sectors	Number of stocks 2016	Number of stocks 1991
Industry Technology Services Health Finance Consumer Discretionary Materials	5 8 2 4 5 1 2 3	8 2 5 2 2 1 2 8
Total	30	30

Can you see the change from a majority of industries and materials in 1991 to technology and finance now?

Can you visualize the wave of change from reliance in commodities to technology in today’s world?

Spencer Johnson in his book ”Who moved my cheese?” discussed about change, in a simple parable of Man in a maze (the market) looking for cheese (our needs).

What will the future be like? There are so many once-upon-a-time big giant and now struggling to survive. When NOKIA was selling mobile phones in 90’s APPLE and SAMSUNG were far from selling phones.

Let us see what the possible sunset sectors are and which sectors we should watch.

Possible sunset sector	Causes	Future watch
Cable (pay) TV Netflix Inc. (NFLX) Comcast Corporation (CMCSA) DISH Network Corporation (DISH) Astro Malaysia Holdings Berhad00175.HK GEELY UTO 00175.H	On-line streaming is trending. Will the pay-TV sector face a sunset in the future, just like Kodak?	Video streaming sector:- Alphabet Inc C (GOOG) Google bought Youtube. Facebook Inc (FB) Twitter Inc (TWTR)  Twitter bought Periscope.
Car (automobile) Geely Auto 0175.HK Brilliance Auto 1114.HK BYD Company 1211.HK Ford Motor Company (F) General Motors Company (GM) Fiat Chrysler Automobiles NV (FCAU)	Fossil fuel limitation. Improvement in battery technology. There will be a likely shift from fuel vehicles to electric vehicles. Most of the big manufacturers of vehicles are already producing hybrid vehicles.	Companies that are already producing electric vehicles (EV):- Tesla Inc (TSLA) BYD Company 1211.HK
Energy Oil, gas and coal are the fossil energy in power-production. Coal mining Cloud Peak Energy Inc. (CLD) BHP Billiton (BHP) Rio Tinto (RIO)  China Coal 1898.HK Yanzhou Coal 1171.HK Shougang Resources 0639.HK	Will these coal miners be out of business soon? Renewable energy Improvement in solar power generation, improvement of batteries leads to easier generation and storage of solar energy. China already converting coal to ethanol, a green energy	Solar plants:- GCL-poly Energy 3800.HK SFCE Shunfeng 1165.HK First Solar (FSLA) SunPower (SPWR) Canadian Solar Inc (CSIQ) Coal converting technology:- Celanese Corporation (CE)
The 2 biggest economies in the world are still dependant on coal in some energy production facilities, but the wave of change is approaching. Environmentally, the world is pushing for less coal and more on green energy. Home builders are incorporating solar panel roofs, linked to battery packs so that batteries are recharged during the day in order to supply adequate power in the homes and may also recharge electric vehicles at night (in future). However, fossil fuel is still in demand for heavy transportation like air and ocean transportation. Unless there is a replacement technology, it is unlikely that we can replace airplane and ship fuel with an alternative. But in shorter distances overland, electric railway and HSR (high-speed rail) are the choice of mass travel.
Shifting back from aviation and shipping to railway? Boeing (BA) Delta Airlines (DAL) American Airlines (AAL) China South Air 1055.HK Cathay Pacific 0293.HK China East 0670.HK Cosco Shipping 2866.HK	China is leading the way to connect from China to Europe by rail.   However, capacity wise by comparison, it is still more efficient to ship by sea and faster to ship by air. Small vessels can carry at least 300 TEUs each voyage. A train-load can carry about 30 TEUs each trip.	Chinese railway expanding regionally:- China railway 0390.HK China Railway Construction 1186.HK CRRC 1766.HK
Retail shopping The wave of change is already happening. Retail malls are not expanding, but on-line retailing is booming. Let us take a look around us and witness this change.
Costco wholesale (COST) Burlington Stores (BURL) Parkson 3368.HK Intime 1833.HK Maoye International 0848.HK	Young millennium kids are mostly shopping on-line. Retail malls are moving towards life style centers; more for relaxation, product testing and fun. What can retailing discount stores do to continue to be relevant for another decade?	Amazon (AMZN) Ebay (EBAY) Alilbaba (BABA)
Disruptive technology Artificial intelligence (A.I)       Automation       Internet of things (I.O.T)      Virtual reality (V.R)      3D printing      Quantum computing      Blockchain technology But what are being changed? Which industry will be hit into oblivion? Take for example how UBER hit the traditional taxi or cabs. What can these taxi drivers do? If you cannot reverse the change, you got to join them. The cheese moved so you got to look for new cheese! Manufacturers of artificial limbs will be hit hard once the 3D printing technology becomes cheaper and easier for the man on the street. The last decade was a huge change in the technology of communication. So the next decade should be application of disruptive technology to enhance our lifestyle. For example, years ago our fathers got to visit the tailor to fit and stitch a suit. He had to wait a couple of weeks to collect his fitting suit. It may be possible in future that you scan your body shape into the system, choose the style and colour and get your suit sent to your home within a few days. Apart from those mentioned above, I also like to watch companies like Cisco Systems (CSCO) that keep moving ahead with innovative ideas especially in cyber-security and their networking systems.