In 1949 George Orwell dared to predict the future in his brilliant and seminal work called 1984. In it he dared, among other things, to predict the future, in this case 35 years ahead. It is as if today I venture to imagine or assume the world in 2053 when I am 70 years old! More than just flying cars, or skateboards as in the case of Mcfly from Back to the Future, predictions about advances in technology being taken to “perpetuity” create very ephemeral and circumscribed ideas to the reality that surrounds us. In other words, we create and design the future based on what we see today.

In the financial market, this becomes especially dangerous. A major example of this was the bubble of .COM companies in 2001.  Going back a little bit in time, the 90's were a period of rapid technological advancement in many areas, but it was the commercialization of the Internet that led to the greatest expansion of capital growth that the country had already seen. Although technology companies already existed and showed consistent organic growth (Microsoft, Intel, Cisco and Oracle), it was the “dotcom” start-ups that drove the market growth with the technology-dominated NASDAQ index rising from less than thousand to more than 5,000 between 1995 and 2000. The graph below gives a dimension of the size of the thing.

But even better are the examples...

• GeoCities, purchased by Yahoo! for $ 3.57 billion in January 1999. Yahoo! closed GeoCities on October 26, 2009.
• com, spent $ 188 million in 6 months in an attempt to create an online and global fashion store. It went bankrupt in May 2000.
• com launched in 1998 spent millions of dollars on advertising believing in the idea of ​​an online Petshop. In 2000 the company held its IPO and 268 days later it was liquidated (closed). The puppy at least looks nice doesn't it?
•  

Despite the craziest predictions about the future, it is interesting that some concepts put by Orwell did have an interesting connection with reality. Your famous Big Brother who is watching you (Big Brother in the original term) differs almost nothing from the TV program, but also from the social networks that are “watching us” on a daily basis. In addition, the “Novilíngua” that was created in the book to control history could resemble the current programming language ... which is so used to help us and also, who knows how to control our life?

Returning to investments.

Why am I talking about this? Because today the investment market also seems to be taken over by perspectives and visions about the future. Investment analysts wear George Orwell's cap when it comes to projecting their future cash flows, their sales estimates that only grow and the consequent infinite value for some assets. And look how interesting, today (01/08/2018) Apple is very close to reaching the impressive mark of US $ 1 trillion in market value!!

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With that, there is no way not to relate technology to a new cell phone, a trendy app, a new youtube channel or even a new transport app. Yes, technology is that. But it is much more! There is a world of different facets within the “umbrella” of technology. It is not by chance that this great fighter accounts for no less than 25% of the S&P index that includes the main companies in the USA.

So I decided to write here  6 FACES OF TECHNOLOGY.  For you who are not an enthusiast of any new blogger, or an “instagramer”, but who like and believe that investment in technology should be considered when building a portfolio….To show you that there is life beyond the FAANG that are so trendy.

6 FACES OF TECHNOLOGY.

1. Manufacturers of semiconductors, integrated circuits and microchips: 

A semiconductor is basically a substance that conducts electricity in some circumstances and is a crucial component of electronic devices..they are everywhere ... from a cell phone to a car stereo, or a digital scale machine. In 30 years, this segment has shown an exponential growth with sales going from around US $ 33 billion in 1987, to reach US $ 408 billion in 2017, a growth of more than 1100%, an average annualized rate of 9% of constant growth since 1987!

Regarding the prospects, they continue to grow strongly based on advances in different areas such as semiconductors for other products such as cars, refrigerators, televisions, etc .; besides the continuity of regional expansion in different markets.

The largest manufacturer of semiconductor chips was Intel for a long time, until last year Samsung overtook it. Currently Samsung has ~ 15% share, Intel 14% and SK Hynix 6%. But Nvidia, which steals the show in the universe of semiconductor companies and shows that there is potential for earnings outside of the hottest social media companies. The chart below compares  Nvida (gray), Intel (blue) and Taiwan Semiconductor Manufacturing (red) , the 3 largest traded in the USA. Nvidia designs graphics processing units (GPUs) for the gaming and professional markets, as well as the chip unit system (SoCs) for the mobile computing market and has AMD as its main competitor. The Californian's shares have appreciated by more than 1400% in the last… […]