What if You Had a ‘Carbon Copy’ of the Future?

We’ve decided to extend ‘Frontier Investing Week’ into a second week.

It seemed to make sense, seeing as your editor spent this past weekend at the World Future 2014 conference in Orlando, Florida.

As you can probably imagine, most of the talk was about the future.

Or rather, it was someone’s vision of the future.

There was a lot of interesting stuff. But did we come away knowing any more about the future than we did before the conference?

Maybe. Maybe not. But that didn’t surprise us in the slightest. Because even though the subject was the future, it was actually talk about the present, just with a futuristic touch.

Confused? Here, we’ll explain what we mean…

It’s a simple fact that it’s hard for people to imagine the future.

Most people tend to underestimate how things will change. They think things will be roughly the same five years from now because they can’t imagine that things could get any better (or worse) than they are today.

There is also a group of people who overestimate how things will change. Those are the folks who pictured flying cars and space colonisation by the turn of this century.

The reality is that things rarely turn out the way people think, because tiny imperceptible changes that happen along the way can have a huge impact on how the future looks 10 years from now.

Not quite the home of the future

One of our favourite shows as a youngster in the UK was Tomorrow’s World.

You may know it. It was a weekly science-entertainment show on the government-owned BBC.

One of the things we remember about the show is the fascination with predicting that homes of the future would have robots doing all the housework — cooking meals, sweeping floors, doing the dishes, and so on.

The short segment of three or four minutes would usually end with the presenter saying something like, ‘And that’s what the home of the future will look like.’

Remember, that was in the 1970s. So far, the home of the future (as in, today’s home) doesn’t look anything like that imagined 30-odd years ago.

So why is that? Why doesn’t every home have labour-saving robots rolling about the place?

Actually the answer is quite simple.

Take housework. The fact is that many household chores now take less effort than a few years ago, because the equipment and tools to do the housework are so much better.

That’s because, rather than trying to make a cover-all household robot, firms have instead focused on making the most technologically advanced individual appliances.

The suction and manoeuvrability of today’s vacuum cleaners is much better, and there are automated vacuums. Mopping is easier — if you have a steam mop. And the floors dry almost instantly. So why do you need a robot for that?

Or what about a robot that cooks your meals? Again, companies have innovated in other ways that makes robotics (for now) less urgent. Innovations such as packaged meals, processed easy-to-cook food, microwave ovens, and sandwich toasters.

Without these innovations, it may have made sense to have a robot. But with them, it doesn’t seem worth it.

Now, all this may sound trivial. But it’s important to understand this when you’re trying to predict the future. That’s especially true if your goal is to profit from future trends.

Driverless cars? Maybe. Driverless trains? Definitely

The major problem with most future predictions is that they tend to try and solve the problems that people have today.

But people may not have those problems 10 or 20 years in the future. That means there won’t be a need for a firm or entrepreneur to solve that particular problem.

That got us thinking about the latest hot topic in automation — driverless cars. Could the driverless car suffer the same fate as the household robot? Maybe. Let’s be honest, driving a car isn’t really that hard.

It may have been hard 30 or 40 years ago when cars didn’t have power steering, cruise control, electric windows, and you needed to ‘warm the car up’ for five minutes before you’d risk taking it out of the driveway. You may even remember the ‘choke’ function that helped start a car on a cold or frosty morning.

But if you ask us, what’s more likely is a shift to automation in other forms of transport. We’re talking about aeroplanes, trains, buses, trams, and even heavy goods vehicles.

There’s a simple reason for that — it’s an economic cost to employ someone to drive, fly and steer these transporters. So why not make them automated? The technology already exists to do this for rail transport. And every commercial airliner has an autopilot feature fitted.

It’s just a small step to making the transition to road transport.

As for cars, the beauty of driving a car is that it gives you freedom. If you hand control over to a machine, then you lose some or maybe all of that freedom. Even Pastor Uth on one of the morning religious shows here in Orlando admitted he wasn’t immune to a bit of road rage.

You drive a car because you believe that you can get you somewhere faster than any bus driver or train driver. Odds are most people believe they know a quicker way to get from A to B than their satnav, too.

So we don’t see people giving up that control.

A carbon copy of the future

Public transport and haulage is a different story. So, is that possible?

Sure it’s possible. Can we guarantee it will happen?

No — although we’re certain Melbourne’s trams will be driverless within 20 years. Maybe they already are. You only get to see the backs of the drivers’ head now anyway. Perhaps the tram firms already use dummies!

So if you can find a way to bet on this trend, then go for it; you could make a pretty penny from it. (We’ve made one suggestion in today’s Money Morning Premium that investors could consider. It’s a blue-chip tech idea too.)

But given a choice between betting on something that could happen…or something we’re sure will happen…we prefer the second option. We can’t absolutely guarantee it will happen, but we can go as near as darn it.

In this instance, rather than trying to predict a future technological trend that has never happened before, we like looking for the trends that have happened before.

We’re talking about the type of trend where it’s as though we’ve got in our hands a carbon copy of a previous trend. All we have to do is follow what the carbon copy says.

After all, it worked well enough for investors last time; why shouldn’t it work this time too? As far as we can tell, there’s no reason. What are we talking about?

We’re talking about an investment megatrend. It’s one of those rare events that only happen once in 100 or more years. But when it does happen it has the same traits as the previous megatrends.

That’s why we compare it to finding a carbon copy of the event. All we need to do is follow the same investment ideas that worked before and it could lead to investment riches.

You can get an idea of the investments we’re talking about here.

Cheers,
Kris+

Read the rest of this article at Money Morning