Investment

Best Long Term Investments 2018 | Value Investing

Best Long Term Investments 2018 – Industry with Growth Potential

Best Long Term Investments 2018 :-

1. Mining & Extraction Industry

Best Long Term Investments for 2018 has Mining and Extraction business in the first position because as we all know over the years there have been constant increase in the cost of raw materials. We – Human beings are always building something & for that they need raw materials. There is a never ending demand for raw materials. So rather than buying the stock of the companies which are making the finished goods or finished products, we should be focusing on being in front of the consumption chain i.e. we should be on the supplier side. Owning a mining & extraction business shall have potential to generate good returns.

Recently there was wave about electric cars in India and the stocks of auto industry skyrocketed. Firstly electric cars requires Lithium ion batteries.
Recently ISRO has entered into a technology transfer agreement (TTA) with Bharat Heavy Electrical Ltd (BHEL) to transfer the technology for the manufacture of space-grade Li-Ion cells. Even if some companies might be working on the technology or even have the technology but there is a catch, Lithium ion batteries require a special material Cobalt without with the production of Lithium ion batteries is not possible.

The supply of this Cobalt is limited and the demand is huge. You can check out the video uploaded by CNBC

ELECTRIC CARS GETTING FUELED ON CHILD LABOR – A MUST READ – READ NOW

Also companies are actively looking for alternative solutions.
Question – Which Company is extracting Cobalt ? – Vedanta Resources which is a group of companies of Vedanta ltd.

2. ELECTRICITY AND SOLAR INDUSTRY

In the near and foreseeable future electricity is going to be the only fuel which will be used. So owning a fundamentally strong company which is engaged in electricity manufacturing and distribution will definitely generate return in multiples. Companies like Adani Power, Tata power etc.

Owning a electricity Company is like owning the future.

3. INFRASTRUCTURE INDUSTRY

India is a developing country and the government is spending too much on the infrastructure and so the companies which have direct links to the government and who can secure tenders and contracts for Roads projects, Bridge projects etc., can generate good returns. Companies like Dilip Buildcon Ltd.

4. BANKING & INSURANCE

Banks & Insurance is always going to be a part of best long term investments because the insurance & banking businesses generate a lot of cash, real cash. It is like a goldmine. Warren Buffett needed funds for making investment in stocks and for that he needed a business which would generate enough of cash. So he bought insurance business as it generates a lot of cash. Everyone buys insurance but no one wants to buy the insurance stock & I don’t know why – Warren Buffett

5. TECHNOLOGICAL COMPANIES

ESPECIALLY THE COMPANIES OWNING PATENTS WHICH ARE ESSENTIAL FOR FUTURE TECHNOLOGIES.

Identify the company which owns a lot of patents which are essential for the future technologies or a company which is developing A.I. Picking a stocks from this sector would even require knowledge about technical aspects & it is a huge task in itself. It will also require a lot extensive research and reading of annual reports of technological companies.

This doesn’t mean that you need to start buying stocks of the companies which are having a lot of patent which will determine future technologies. The rationale behind this whole discussion is that – let us try to understand it by way of an example :-

Facebook bought WhatsApp for the sole reason of eliminating any future threats to the existence of Facebook. So the whole idea is to identify those companies which are developing such technology or application which can be bought buy big giants like Facebook, Microsoft, Apple.

Suppose a startup or company is working to develop a technology that will make the mobile batteries to last 10 times more. And its done, if the company really makes it.

You can also look for companies owning Biotechnological patents – with a long-term perspective. Exponential technology themes continue reading…

2 thoughts on “Best Long Term Investments 2018 | Value Investing

Leave a Reply