Some Promising areas for Business Part II

As we started the discussion on ageing effects in developed nations, I lost touch with outside world information (basically internet) since I started traveling in interior parts of India. Here u get very poor connectivity with normal dial up. With this speed, you can barely check your emails leave apart reading a article or going through current stuff. Anyway coming back to main discussion, there are two major effects in terms of ageing. You loose a major chunk of population who was efficient in their jobs, so new job opportunities are created for expert people and since these old people have plenty of time to kill as well good money. These people expect fixed gains without major risks even if the returns are low. Current house development boom in Lake Tahoe area at least is caused by these retirees from California. Since they can sell the houses purchased for pennies and then sell them at after retirement for millions. May be this is too specific, but if we dig into the housing boom we will find funds coming from this major source. To make a natural analysis of this, let’s think rationally. If I am a retire, got some major money coming in which I want to invest in safe but fixed income fund where would I go? I should either think of some mutual funds but since mutual fund market is over flowed with money I am not quite sure of handsome gains there, then real estate market is hot, and with exception of some high risk areas that market is not gone go down. The worst could happen in this case is that I would loose agent commission and end up selling the house for the price I bought it. Now the market is soaring very steep in these old age popular areas. Old age popular areas mean the areas where old population wants to move in. What is common in areas such as San Diego, Miami, Orlando (or for that matter I guess whole Florida), have common. These are old people popular destinations. If someone wants to say those are naturally beautiful places with nice quite sea and towns I would say Oregon is better in those terms but oldies are not moving in there so market there is still pretty stable. It might have some boom such as normal real estate market in USA but not more than that. Now another factor, what should these people do with their time, why not make some golf clubs where these people live. Since they got plenty of money to spend too, they can afford this pretty easily. Why not make some card games and gambling opportunities where these people will fill like champions while loosing the money. Now, let me say this, being from Nevada does not make me to say something like this. But if you watch the popularity of Texas Holdem or any kind of poker game, immaterial if it is played at an Indian casino or online, has lot spectators as well as participants. Now how come, all of sudden such normal poker games gets famous. If I am looking for business opportunities in this sector, then I would say two things. First create some solid business investment scheme which will assure of safe money at particular amount of interest and second what it is called in Indian software industry as body shopping. Ship the person with particular skills for particular amount of time. Now, software industry assumes these roles for particular amount of time but in open market this could be done at every level. Lot of these jobs may be going through BPO market but stocks of companies like AppleOne or these stand by employment companies are gone go up. No one wants to bear the cost of employee health insurance, retirements etc. No one is ready to pay for that either. Though we are seeing the job market growth going on, I think that will be short time trend. Demand and supply chains in terms of human skills will be more powerful business. I think that is the reason companies like IBM are making strategic shifts from being a products company to become a service company who would provide these services. But I will say this, companies like size of IBM are not good for this market since they can kill every new player and charge the market at their own rate which will help to stop this trend. Another thought comes in my mind here is that this market is not high investment market, if I got good contacts and ability to keep these good people I can survive in this market. Now getting back to original discussion, both these opportunities could be profitable for Asian countries where interest rates for borrowing are still high, where lot of infrastructure spending is still pending and there are millions of people which are not ready to invest in high risk market. If I can take example of India, being a developing nation, everybody is investing in industry and naturally expecting from government to invest in infrastructure to facilitate the growth. Now politicians lacking vision are eating out from government money with short term gains. It is the classical example, where a farmer is killing is hen to get all gold eggs once but eventually ignoring the gains he is going to get. But I might stop short, on making comment on this being very sensitive subject for me. In short, whatever government has opened for private sector to invest in is growing (for example power generation, telecom) but what ever is still restricted is not. (Roads, water supply). If someone can make use of these opportunities then it will be best business to go in. I am quite sure either its India or Brazil its gone take a lot of capital at first term to invest and a solid political background to come in such business but I think it is possible with foreign investment. I think it is not at all possible to attract a solid investment from these retires for a dot com or any new technological boom. Proving gains first hand for short time will attract lot of investment. Rather than buying circuit city which is in a business sector over populated players I would invest in something like this. Let’s continue this discussion.