Paul Ferraresi

Comments by Paul Ferraresi:

Everyone is always looking for the “quick buck” return. It rarely happens. Most people lament when they look back and see they had the opportunity to invest in great mega trends, but procrastinated and lost out. for instance, when the computer industry took off in this country it did not matter if you invested in Dell, Gateway, Apple or Microsoft stock. When a trend or theme takes hold, all elements of the trends go up in value.

Let’s take a look at a few coming trends that you can invest in now and cash in 10 years from now. You say that you do not want to wait 10 years to cash in? Whether you believe this or not, you will most likely be around in 10 years and these things will take place whether you participate or not.

In the next 5-10 years some long-term demographic trends and global shifts in economics will push short-term concerns (elections, interest rates) into the background and bring change to the investment landscape.

Here are some mega trends:

1. Change in Economic balance

• US economic dominance will move toward foreign countries
• Today the U.S leads the financial markets followed by Japan, Eastern Europe and China
• Ten years from now it will be turned upside down. China will lead the finanacial markets followed by Eastern Europe, Japan and then the U.S
• The U.S is on solid ground but it is a mature industrialized economy with a limit on its growth
• Foreign countries are benefiting from the U.S. maturing as their growing populations and consumer demands will push them past the U.S
• Wall Street says to allocate 10% toward international and 90% to U.S stocks. That is a backward allocation. It should almost be reversed.

2. Rise of Chinese Consumer Generation

• Presently the U.S has the largest consumer base, stock market and economy in the world
• Over the next 10 years China will replace the U.S as the world’s leading financial stronghold
• In the U.S we have 300 million people with economic growth at 1%
• China has 1.3 billion people growing their economy at 11%
• Chinese consumers will drive commodity prices higher especially for oil and chemicals to produce and manufacture (make investments here)
• These consumers will need more electricity to run more computers and appliances(KA-CHING $)
• China’s one child policy has lead to a “Little Emperor” society. This will drive up demand for jeans, fast food beverages and other items geared toward children (Are you getting it yet?)
• Chinese women are buying cosmetics, apparel and luxury items. Total value of the cosmetics market is near $6 billion. This is the 4th largest category behind real estate, autos and tourism
• The country’s saving rate is 35 % (Hear that American spenders?) and this capital pool is used to finance productive capital investments

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