Andrew Lockley – Exponential Investor (United Kingdom) –
There’s a term used to describe antisocial technology products: jerktech. These are businesses based on allowing you to do things which are fundamentally unfair or unreasonable. For example, in parking-constrained San Francisco, one app allows users leaving a parking space to charge a fee to people who are trying to park. This may be a welcome convenience to the incoming driver, and a handy source of profit for the “seller”, but it fundamentally transfers an asset from collective ownership into private hands. As a result, it’s just facilitating jerks – who think it’s absolutely OK to capture a community resource, and sell it. But that’s really not cool. In fact, it’s kinda jerk-ish…
But, in my view, jerktech goes far beyond these acknowledged sectors. Anti-social businesses are something Exponential Investor frequently covers. If you’re investing in an industry which is making a profit at the expense of society, it’s generally only a matter of time before the world catches up with you. Today I’m giving you a list of a few such sectors I think you’d be well out of.
The endocrine system produces your ’s hormones. This is your chemical messaging system, needed to control everything from hunger to puberty. Unfortunately, many chemicals in the modern world are thoroughly messing with this aspect of our biology. As a result, we’ve got a range of major problems to contend with. Although in some cases the evidence is not conclusive, it’s looking likely that everything from decreasing sperm count to sex-changing fish are caused by endocrine-disruptors in our environment. Despite the ambiguity, the evidence is getting stronger all the time that these chemicals are a major problem. That’s a big deal – as they are present in everything from fabric softeners to synthetic rubbers. Their manufacture and use impacts a broad range of industrial sectors – and relevant firms are going to experience significant pressure in coming years. If you’re investing in industries which produce or use suspected hormone disruptors, it’s time to check your holdings – and potentially get out.
Plastics are looking more and more like a major environmental problem – and it’s mainly because they take a very long time to break down. As they degrade, they tend to end up as a swarm of “microplastics” – tiny plastic particles. These are now pervasive throughout the world’s oceans. Of course, much plastic waste can be recycled. However, plastic films and composites are a tricky recycling problem – making them more likely to be the subject of enforcement action, such as the plastic bag tax. Such measures are widely seen as necessary, as we are now seeing a global contamination problem – with plastic litter choking uninhabited islands; and getting into our food, through seafood and sea salt. If you’re in the plastics industry, or dependent on it, you can expect a raft of legislation in coming decades aiming to tackle this looming global menace.
Subscribers will realise Exponential Investor is very much down on fossil fuels. To be honest, this is a jerktech which has gone on far longer than it should have – principally because it has underpinned the global economy. Even now, it would be a very brave politician who truly took genuine action on climate change. Regardless of this political timidity, the fossil fuel age is now dying – not with a regulatory bang, but with an economic whimper. Renewables are giving the fossil industry a right old kicking, and that’s only going to get worse. It’s an industry I’ll be glad to see the back of – and cleaner, safer air will be just the reason to cheer the end of the fossil era.
Animal antibiotics are a small sector, with a vast global impact. In Europe we’re finally getting to grips with overuse of animal antibiotics, but elsewhere they are still used with careless abandon. With rising awareness of a looming antibiotics apocalypse, you can expect further significant legislation to control misuse. This will come either at an international level, or country-by-country. The first targets will be careless use of antibiotics – such as their inclusion in animal food, as a growth promoter. This story has a real personal angle for me: two of my four grandparents nearly died from bacterial infections, and my own recurrent childhood ear infections could also have killed me without treatment. As a result of careless use, our future is now looking ever more like this hideous, disease-ridden past. Antibiotic misuse is perhaps the jerkiest of all jerktech businesses.
Things are not looking good for insects – and that’s really bad news. We’ve seen declines of around three-quarters in populations of flying insects, and that’s happened in just a generation or two. That’s a huge problem. Ironically, it impacts particularly the agricultural sector, which is largely responsible for the decline – as a huge proportion of our food relies on flying insects for pollination. The culprits in this ecocide seem to be overuse of pesticides (which kill directly), and potentially herbicides (which remove insects’ food sources). In particular, neonicotinoids and glyphosate are coming under careful scrutiny. So, if you’re an investor in farming or agrochemicals, you need to keep an eye out for forthcoming legislative changes.
A controversial one, I know… but retail sheds bring out the hypocrite in all of us. We all like the idea of a twee little high street – but many of us still shop at big-box out-of-town retailers. However, this type of shopping is going to suffer a significant relative decline in coming years. The need for ample parking for all those polluting cars will tend to fade away – as people move to using autonomous electric taxis, instead of owning their own vehicle. This switch dramatically changes the economics of land use – meaning that town centres will become a relatively more appealing destination. Furthermore, the rise of e-commerce means utilitarian retailers (eg, supermarkets) are increasingly going to fade from our lives – as we move to acquiring tedious essentials online. I now get everything from vegetables to kitchen roll delivered in bulk – and I literally can’t remember when I last went to an out-of-town supermarket. It’s people like me who are responsible for Tesco’s nightmare, over recent years.
What jerktech will you be back glad to see the back of? Let us know: email@example.com.