In last year's edition of the Ten Best Investment Ideas, we
talked about the demographics and dynamics of our population and
the businesses that one might consider investing in when trying to
take advantage of this longterm theme. In this years report, we
continue to believe this theme has legs and will ultimately affect
the entire population, from young to old.
At the time of writing, the Federal government announced a
Productivity Commission inquiry into the childcare sector and early
childhood learning. The anticipated outcomes of this report will
include ways to provide a system that is more in line with
today's family structure and not necessarily based on the
standard 9 to 5 working week. It is also looking to address
concerns around the need for higher women workforce participation
and address learning and developmental needs of children, while
remaining flexible and financially sustainable. The report is due
in October 2014 and it will be interesting to see what
opportunities lie ahead in that space.
In the media sector, online leaders are becoming more and more
prevalent. News and information travels fasterthan ever before and
is accessible to anyone, anytime. Most of it is free, but some
media outlets are also charging subscribers for access. Online
advertising is continuing to grow in a clear sign that consumers
are looking to these mediums for solutions. There are a number of
online businesses that have grown over the years to now become
dominant and most importantly, profitable in their own right.
Examples of these include employment and education provider
Seek.com.au, CarSales.com.au and Realestate.com.au.
Telstra and Foxtel are examples of media companies capable of
delivering a movie to your TV without you actually having to leave
the house. With faster data speeds available upon the eventual
delivery of the NBN, businesses will be able to offer new
Overseas providers like Netflix provide on-demand movies and TV
content streamed over the internet for a monthly subscription and
services such as this are likely once data speeds are acceptable to
facilitate such services.
With our lives seemingly busier than ever before, online
shopping has seen amazing growth across consumers of all ages. Most
of the major retailers in Australia now have an online presence,
but they swim in a global pool, often against far bigger
'fish'. We need to consider businesses in this space that
have a recurring demand. Woolworths and Wesfarmers (owner of Coles
and Bunnings), the dominant consumer staples retailers in Australia
both provide services that allow shoppers to shop online at a time
that suits the consumer and have goods delivered to home. All for a
service fee of course. While this has been offered for a number of
years, as our lives get busier and we find it less convenient to do
the mundane, these services should continue to see greater use in
Government policy and intervention from time to time will also
play a part. As the population in Australia ages, the demand for
aged care services is expected to grow at a faster rate.
It is likely that access to
quality aged care facilities will become more difficult as demand
outstrips supply and workers in the space become increasingly
difficult to find. Providing affordable care in the home is likely
to be the way of the future.
The key to investing in this area will be identifying who the
major players are and how will they model their business to take
advantage of upcoming opportunities. Ramsay Health Care and Sonic
Healthcare are two well established healthcare companies that hold
dominant positions within their respective fields.
In the years following the global financial crisis of 2008 many Australian investors lost their life savings as financial products failed and the Australian Stock Exchange shed over 3,000 points.
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