by Scott Ronalds
I did three things over the past couple of weeks that I would’ve never thought possible just a few years ago. I test drove a car that drove itself. I ate a burger that looked and tasted like meat, but wasn’t. And I walked by the site where developers are proposing to build a 35-40 storey building made of wood.
The car was a Tesla Model 3. Shortly after we left the dealership and turned onto Granville Street, the salesperson prompted me to switch it into Autopilot mode, and there I was, watching a car drive itself. It braked when the car in front us braked and sped up when the lane was clear. It was amazing. And a little creepy at the same time.
The burger in question was the Beyond Meat Burger from A&W. It looked like a real burger, had the same texture, and tasted pretty close to the real thing. Yet, it was made of peas, beets, potato starch and some scientific words I can’t pronounce.
As for the wood building, a Vancouver firm has plans to build the world’s largest wood tower five blocks south of our office (8th & Pine). The proposal is for a mixed-use tower made of “as much engineered wood as possible, with only a concrete core and minimal amount of drywall.”
The world is an amazing place. And more than ever, it’s changing right before our eyes. Technology and bold thinking are leading to incredible things. Things many of us never thought possible. A car, burger and tower blew me away recently, but they're just a drop in the bucket in relation to what’s currently being developed and built around the globe.
With all these changes come investment opportunities. Oftentimes, the opportunities span well beyond a marquee product or service itself. Take self-driving cars. The microchips, sensors, cameras, materials, and other components that go into a vehicle are frequently built by a company other than the manufacturer of the car itself. Investing in a best-in-class supplier can be as, or more profitable, than investing in the manufacturer itself.
And that meatless burger? All those plant-based ingredients need to be grown and harvested efficiently. If the product takes off, the companies behind the agriculture could represent a big opportunity. Similarly, if high-rise wood towers prove to shake up the construction industry, the businesses involved in engineering wood may be the real winners.
When looking at the broad investment universe, these are some of the things our managers consider. They look for well-established leading brands (such as Novartis, Walt Disney, CN Rail, and Visa) as well as companies that make inputs or provide services that enable other businesses in emerging industries to prosper. This is where some real gems can be found. Below are a few examples (all of which are held in our Founders Fund and Builders Fund).
- Altran Technologies is a Paris-based leader in engineering and R&D services for industries including aerospace, autonomous driving, fintech, cyber security, life sciences, railway, and renewable energies. In a nutshell, Altran provides end-to-end consulting and research services to clients that are inventing the products and services of tomorrow.
- Keyence is a Japanese supplier of sensors, measuring systems, barcode readers, and machine vision systems used in the design and manufacture of products in a number of industries. Its sensors have become the standard for machine builders and its vision systems can help manufacturers detect nearly invisible defects.
- Novozymes is a Danish pioneer in developing biological solutions for the agriculture, bioenergy, household care, and food & beverage industries. Its enzymes and microorganisms help companies make more sustainable and efficient products. Those cold water laundry detergent tabs you may use, for example, work because of Novozymes.
- Charles River Laboratories is a Massachusetts-based company that provides products and services that help pharmaceutical, biotechnology and agrochemical companies expedite the discovery, development and manufacture of drugs, therapeutics and other products. The company helped support the development of roughly 85% of the drugs approved by the FDA last year.
We note at times in our communications that new investment opportunities are few and far between. This has more to do with valuations being too high (the price we’re willing to pay for a stock) than a scarcity of intriguing businesses in the marketplace. Indeed, there’s never been more innovative entrepreneurs and companies pushing boundaries than today.
A few years from now, I’m sure I’ll be in awe again of the latest technologies and innovations and their trickle-down effects into our daily lives. It’s an exciting time in the world — and it’s an exciting time to be an investor.
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