
Ask HN: If you had millions to invest, what sectors would you bet on? - wesammikhail
Heyo,<p>I am genuinely curious to hear what sector(s) HN readers are currently interested in. Assuming you had a large amount of capital and you were allowed to only bet on 1 sector for the next say 5-10 years, what sector would you put your capital into? and what innovation(s) are you currently seeing within said sector that makes you excited about it?<p>Cheers
======
kk58
Basic framework here is to look at megatrends that will shape the global
economy.

1\. Urbanization

More than 60% of the world population will live in cities and existing cities
will become bigger ceteris paribus. I could write a thesis on this but you
need to think very broadly about this. A lot of unicorns are playing in this
space think Uber, instacart, Zillow etc

2\. Global Southern shift Basically demographic and economic centre of
activity is shifting to global South. This is different from southern
hemisphere. Pretty much any business focusing on consumption sector in these
areas is a good bet. Think FMCG FMEG

3\. Ultratrend - climate change Climate change will play havoc with so many
layers of our economic systems. While most people think agriculture, you can
also add transportation, manufacturing, renewable energy, reinsurance,
fishing, textiles, pharmaceuticals

Any solution that is climate defensible is gold

4.Technology breakthrough

Here an IP defensible stack with a focus a sector or niche in above 4 areas
would be a force multiplier.

Here I guess basic framework could be data + operational expertise + combo{ML,
AI, serverless computing.. }

Chemical companies could be an interesting bet. There is a lot of work
happening in using AI for molecule discovery, process discovery. Any company
which cracks this will be the Google of "atoms"

~~~
stareatgoats
> 1\. Urbanization

I'm more and more convinced we will see a reversal here. My guess is this:
society as a whole will eventually reject the idea that they should be
burdened with a massive expensive infrastructure just to have people sit in
offices in centralized locations, staring at screens and doing the same job
they could do from their homes. Or that shops need to be in centralized
locations. Roads, railways, brick and mortar shops will all be gone and
replaced with rural settlements in natural surroundings and virtual "travel"
(VR) for the most part, air travel (drones, helicopters, flying cars) for the
cases when absolutely necessary (transport of goods). It will probably be a
gradual, but accelerating process as the bits fall into place.

So no, I don't believe urbanization is a good bet, not even in the medium term
at least not in developed countries. Goods and services that support the above
scenario on the other hand ...

~~~
jjeaff
I agree. The main reason people are urbanizing is because the types of jobs
available are increasingly specialized and thus need to be based in urban
areas to find talent. As remote working becomes more and more viable, people
will start living where they want. Some will remain in urban areas because
they like it. But many will opt for suburban and rural as housing prices are
so starkly minimal in comparison.

------
lkrubner
Real estate. Mostly in Eastern Europe. I'd buy up areas around Krakow and
Warsaw. This is a gamble on political stability in the EU, which I believe
will pay off. I believe the EU will survive, and 20 years from now Poland will
be much more integrated with the EU, so real estate in Poland can only go up.
Same with Budapest. And parts of Romania are worth a look.

Even in the West, there are some areas that have not yet been gentrified. In
Portugal, real estate in Lisbon has already gone up quite a bit, but less so
in Porto.

In Italy, much of Sicily is interesting to speculate on. Again, one is
speculating on the notion that politics will become more stable, and crime
will come under better control, allowing property values to rise.

~~~
a_bonobo
On a similar note, buy land in Ukraine - Ukraine has the most fertile soil in
Europe, but agriculturally it's very under-developed due to corruption and bad
government. It _could_ be the bread basket of all of Europe.

[https://en.wikipedia.org/wiki/Chernozem](https://en.wikipedia.org/wiki/Chernozem)

~~~
j_crick
Except for agricultural land is not for sale here right now and it’s often a
subject of nation-wide debate. With bad governance habits and corruption not
going anywhere for the time being it’s highly unlikely that foreigners will be
allowed to buy any chunks of local fertile soil. But even if they were, not
being accustomed to the way that business is sometimes done here, they could
be quickly forced out by some local entrepreneur hiring some paramilitary
group to set your farm on fire, for example. I’m not even making this up:
[https://www.kyivpost.com/article/content/business/french-
win...](https://www.kyivpost.com/article/content/business/french-winemaker-
cannot-get-license-after-10-years-407390.html)

------
dazsnow
Diamonds! I got an email the other day from a lawyer who told me I'm actually
a descendant of Nigerian royalty! As if that wasn't enough, my great uncle has
passed away and left all of his diamond mines to me in his will! I just needed
to transfer a downpayment - relatively small in the grand scheme of things -
to formally transfer the ownership so the money will soon start rolling in!
See ya later, chumps!

~~~
DougN7
I’ve thought about collecting all those emails I get. There is some good
creative writing going on :)

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justinzollars
Gold. We are in a 6 year bear market and the fed just did a total 180 freezing
interest rates. Interest rates will probably never normalize because of high
debt loads and this could cause pressure on the dollar. Furthermore we are at
year 10 of the bull market and the yield curve just inverted signaling a
recession is likely in the next few years.

~~~
panarky
The probability is increasing that US Federal Reserve will become a much more
politically motivated institution, biased toward accommodative monetary
policy, low interest rates, a large and growing balance sheet, and more
private debt.

At the same time, US government deficits are setting records highs for
peacetime.

And it's not just the US, with other major economies like China and Japan also
racking up public and private debt at astonishing rates not seen outside of
war economies.

This is essentially a trade-off between juicing current GDP growth at the
expense of long-term stability of price levels and ability to respond to
inevitable crisis.

It's impossible to predict what will happen or when, but if the probability of
economic catastrophe increases, the value of precious metals, real estate and
the largest, most stable cryptocurrencies should increase.

~~~
dehrmann
> US government deficits are setting records highs for peacetime.

Sorta. It stabilized around 2013.

[https://fred.stlouisfed.org/series/GFDEGDQ188S](https://fred.stlouisfed.org/series/GFDEGDQ188S)

~~~
panarky
Your chart shows the US national debt, not the budget deficit.

The deficit for the first four months of the current fiscal year increased 77%
compared with the prior fiscal year.

Revenues fell by 2 percent to $1.1 trillion, while spending rose 9 percent to
$1.4 trillion.

Source: [https://www.bloomberg.com/news/articles/2019-03-05/u-s-
budge...](https://www.bloomberg.com/news/articles/2019-03-05/u-s-budget-
deficit-widens-77-percent-as-revenue-declines)

All this during peacetime and economic expansion. What will this look like in
non-ideal conditions of war or economic recession?

My point is that fiscal recklessness will increase as the Federal Reserve
becomes more politicized. This will make the economic system more fragile and
raise the probability of a catastrophe.

When the odds of financial catastrophe increase, the rational response is to
allocate more capital to precious metals, real estate and two or three
cryptocurrencies with the greatest hash power.

~~~
dehrmann
> Your chart shows the US national debt, not the budget deficit.

No, it shows debt as a percent of GDP. The idea is to normalize debt so the
numbers are more meaningful. Context is everything.

> Revenues fell by 2 percent to $1.1 trillion, while spending rose 9 percent
> to $1.4 trillion.

I'm not especially concerned if also GDP went up, but the data's not out, yet.

> What will this look like in non-ideal conditions of war or economic
> recession?

See 2008-2015? That. That should worry you.

Also fun:
[https://www.google.com/publicdata/explore?ds=ds22a34krhq5p_&...](https://www.google.com/publicdata/explore?ds=ds22a34krhq5p_&met_y=gd_pc_gdp&hl=en&dl=en#!ctype=l&strail=false&bcs=d&nselm=h&met_y=gd_pc_gdp&scale_y=lin&ind_y=false&rdim=country&idim=country:uk:es:lu:el:de:fr&ifdim=country:country_group:eu&hl=en_US&dl=en&ind=false)

------
temp28179
Crypto. It's either going to $0 or to trillions. It's more than survived for
10 years now so might as well bet on the latter.

Or therapeutic psychedelics

------
dontbenebby
All of them. Index funds. You can't beat the market.

~~~
paulsutter
Indexes for which countries or regions?

~~~
robjan
Why not all of them
[https://investor.vanguard.com/etf/profile/overview/VT](https://investor.vanguard.com/etf/profile/overview/VT)

------
lykr0n
Clean Energy- Solar, Wind, and Battery Storage tech. Longevity funds that
focus on providing retirement care in the US (as we're going to be entering a
period where a large part of our population will be retiring), and life
extension companies that provide solutions to extend someone's life.

Other than that, Biomedical and aerospace.

~~~
KerryJones
This is interesting -- I agree as an industry but would have _no_ idea what
companies will win out.

------
benzor
As with most investing questions, keep in mind that the instrument (i.e. the
way you place your specific bet) matters just as much as the actual sector.

Crypto, marijuana, self-driving, take your pick: you could totally nail the
sector choice and still lose a lot of money if you make a wrong bet. Trade
carefully, and diversify...

------
Arun2009
Democratizing high quality education.

It used to be that the best teachers were available only to a few dozens of
privileged students at a time. But now we have the technology to scale great
pedagogy to reach millions of learners. I also think we ought to move from a
push model of education to a pull model, i.e., learners get to pick and choose
from a selection of good teachers and progress through various levels at their
own pace (and get accredited for their learning). Classroom learning really
ought to go or be reduced to very special cases. That we all have to be
synchronized on when we are prepared to learn a topic is an outdated concept.

MOOCs are an excellent step in this direction, but we really should be doing
more. In education, I think we're in a stage similar to where internet search
was before google or smart phones were before iphone.

~~~
sdan
I agree with what you're saying, but MOOCs have showed time and time again
that they don't work and people lose attention extremely easy. How is that
perpetual problem going to stop?

~~~
Arun2009
I'd contest your claim that MOOCs "don't work".

It's true that only a fraction of those who participate in typical MOOCs
complete them (8 - 10%),
([https://imgur.com/a/HI4IXbt](https://imgur.com/a/HI4IXbt) , from "HarvardX
and MITx: Four Years of Open Online Courses",
[https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2889436](https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2889436)),
but a significant fraction (~15-20%) also explore these courses (i.e., they
watch 50% or more of lectures). So this means that the MOOCs are reaching
around 20-30% of the participants in some significant manner.

First of all, is the larger drop out rates really a problem? I'd argue that
the option to drop out of a course if you feel that it doesn't serve your
needs right now is itself valuable. This means that you're free to spend your
time in ways that are more useful to you. Also, a large number of those taking
the MOOCs are themselves teachers. This means that the high quality of
pedagogy that MOOCs can deliver will have cascading effects through educators
who use them to upgrade their own skills.

How to improve the effectiveness of MOOCs? There are plenty of things we can
do, too many in fact to go into in one post. A few keys areas that I can see
are (a) pedagogy (finding great teaching talent and professionally beefing up
their performance), (b) affordability (an issue in developing countries
primarily), (c) formal accreditation, and (d) a wider selection of courses
that form a genuine alternative to the standard university programs. Models
that I find incredibly exciting are that of India's IGNOU
([https://en.wikipedia.org/wiki/Indira_Gandhi_National_Open_Un...](https://en.wikipedia.org/wiki/Indira_Gandhi_National_Open_University)),
NPTEL ([https://nptel.ac.in/](https://nptel.ac.in/)), and Swayam
([https://swayam.gov.in/](https://swayam.gov.in/)), all of which issue
officially recognized certificates. But unfortunately, as with many things
that the Government of India does, the intentions are noble but the execution
is mediocre. There's clearly room for players who will "full-ass" what IGNOU
set out to do.

------
RickJWagner
It's a fool's errand.

Buy a whole-market index. As Buffet says, don't try to find the needle-- own
the haystack.

~~~
temp28179
This is just a fun thought exercise...

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cardplayer
Marijuana. It’s not going anywhere and it’ll eventually be larger than tobacco
and as ubiquitous as alcohol.

~~~
wesammikhail
This sector certainly is promising however the lack of investment vehicles and
legal structure (especially here in Europe) do not allow bullish moves at all
unfortunately :/ Otherwise I do share your optimism toward said sector

------
lwansbrough
Agriculture. If the world keeps warming we’re gonna need some big changes in
the way we make food. Anybody that’s looking to turn server farms into real
farms would have my money. Bonus points for modular setups and micro
environments to avoid the need for any plant treatment chemicals.

~~~
AntiTechTechie
I was thinking the same thing, ag, agtech, aquaponics, hydroponics, renewable
energy powered ag, etc...food and water...most important areas of research in
my opinion

------
bobosha
Making healthcare more accessible (using technology). Includes remote care,
AI-based diagnostic tools, home healthcare, compliance monitoring etc.

It's no doubt a very challenging space, given the regulations and liability
issues, but the sheer size makes it all the more important

------
cageface
I think the market for plant based meat substitutes and cell cultured meat has
the potential for massive growth. There are still some kinks to work out but
tremendous progress is being made.

You can help out animals and the environment and make money at the same time.

~~~
KerryJones
There's a lot of research indicating that going back to basics with diet and
eating lots of meat may actually be the healthiest option -- see "The Big Fat
Surprise", and rise in Keto and Carnivore diets. Not saying which direction it
will go, but definitely not a sure bet.

~~~
cageface
That research is extremely biased and suspect. I’m very confident that once
people have been on these diets long enough they’re going to start seeing some
very serious downsides. This is already happening with some prominent boosters
of carnivore diets reporting some very alarming blood tests.

Health issues aside the planet can’t support 8 billion people eating like that
so practical concerns alone will drive demand for alternatives.

~~~
KerryJones
What research? I didn't name any. I named a lot that shows research that
indicates that plants are healthy is broken -- which I've seen bolstered in a
lot of places.

I agree that Keto and Carnivore diet are underesearched, but blood reports
have also shown very positive on quite a number of people, but most people
test after a few weeks rather than 6 months.

The theory is that it takes the body a while to adapt to anything -- esp. when
you've been stuffing your food with carbs for most of your life.

I'm 3 months in on Keto, planning on taking blood tests in another 3 months --
I'm not taking it likely, I've been vegan after a lot of research as well --
but there are many flaws in the vegan argument.

We haven't spent any time trying to solve the problem of 8 billion eating like
that, we're pushing the other direction, and it quite well is causing HUGE
amounts of health problems. So, I don't know that it's a real choice.

------
marketgod
Why focus on a sector and not take advantage of the market. Every day there is
a new opportunity. You have to just adapt and take advantage of it and make
profits. I would trade options for the different stocks available and leave
the rest in AAPL.

------
NoCanDo
Artificial Intelligence and Batteries.

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oneowl
Renewable energy. Excited about hydrogen fuels.

------
Jack000
bearish on crypto, bullish on "AI"

in practice I've sold most of my index position for MCD, as the VIX (mean
volatility) is trending high. Even if you're right about the sector, it's
virtually impossible to predict which company will come out on top.

~~~
wesammikhail
when you say bullish on "AI", which specifically do you find interesting in
said sector?

~~~
Jack000
automation of human cognitive tasks

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Spooky23
Laundromats and convenience stores.

People are getting poorer and moving towards renting and condos.

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catacombs
Water.

------
akerbeltz
Water!

~~~
dehrmann
This feels like a crowded play. It's not fungible enough to really invest in,
too many cities are close enough to the ocean to desalinate (expensive, but
not _that_ expensive), so you're left with ag use. That said, I'd be _mindful_
of water supplies when looking at any real estate.

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mgarfias
trash collection

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cvaidya1986
Immigrant entrepreneurs

~~~
wesammikhail
That´s... not a sector!

~~~
cvaidya1986
Are you sure?

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skanga
Flying Cars. If you want to invest contact me!

