Wall Street Wildlife Investing Podcast Podcast #34 - Hype cycles
It can be exciting to invest in new innovations and it's easy to get carried away with the next big thing. Gartner hype cycles illustrate the typical pattern of new innovation over time, from inception to the peak of inflated expectations, down into the trough of disillusionment, and hopefully up the slope of the enlightenment to the plateau of productivity as the innovation matures. In this week’s pod, we take a look at a few recent hype cycles and talk about some of the innovations that impact our own investments - past, present and future.
- Many technologies related to connected vehicles have gone over the peak of inflated expectations and are beginning to mature. According to Gartner, electric vehicles and autonomous vehicles are just starting to realise their potential and have a long way to go. However, don’t expect to jump in your flying car any time soon
- The Internet of Things is mostly at the peak of inflated expectations. There’s a lot of hype but will we see real applications that fulfil the promise of a fully connected world of devices? The use of wearables and digital twins of the person could revolutionize health promotion and disease prevention, but do we really need a kitchen tap connected to the internet?
- Digital advertising has powered much of the online experience, from social media to video streaming, and the space is evolving quickly. Companies are working to balance the need for privacy and the ability to show targeted ads. However, seeing connected TV advertising near the peak of maximum hype with an estimated 5-10 years to maturity gives us pause on a particular stock in our model portfolio.
- We are seeing similar changes in digital marketing as the world increasingly moves towards a digital future, but we are surprised to see mobile wallet marketing sliding into the trough of disillusionment. The use of digital payments is growing at a rapid pace, and we’re starting to see new ways it can affect consumer behaviour. Imagine if the money in your digital wallet expired and you had to use it or lose it?
- It's easy to get caught up in the hype, and one place where we have done that ourselves is in the sector of 3D printing. We invested during the time of maximum hype, and have seen the value of our investments get decimated as reality set in. We finally sold out after years of broken promises, however, Gartner believes 3D printing in manufacturing operations is starting to progress towards maturity and productivity. Did we exit our 3D printing stocks too early?
The following companies are mentioned in this episode: Facebook (FB), Apple (AAPL), Alphabet (GOOGL), Snap (SNAP), Vuzix (VUZI), Unity (U), CrowdStrike (CRWD), Cloudflare (NET), Fastly (FSLY), Tesla (TSLA), Teladoc Health (TDOC), Magnite (MGNI), The Trade Desk (TTD), IZEA Worldwide (IZEA), 3D Systems (DDD), Stratasys (SYS), ExOne (XONE)
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