We’re not getting any younger. But an ageing population isn’t all bad. In fact, there are two industries that will prosper greatly in the next few decades because of this one unstoppable trend: security and telemedicine.
They will no doubt make fortunes for smart entrepreneurs. And savvy investors could make big money, too, by finding the right companies with solutions to one major problem that’s arising. That is that the public sector just cannot cope.
90% of people over the age of 65 have one or more chronic diseases; one third of people over the age of 65 will experience a fall. And, in case you are young and think that this does not concern you, then be aware that within a decade, two out of every three of the baby boom generation will have to take care of their elderly parents.
Dealing with the problem that won’t go away
One prediction that we can make with certainty is that the average age of the population is getting older. Today 17% of Europeans are over 65. In fifteen years’ time this number will be 23%. In the USA the percentage will go from 13% to 20%. Even in youthful Asia, the respective numbers are 2% to 12%. This will put a massive strain on the public services that have traditionally looked after old people.
The biggest worry for the elderly is their health and their security. In the old days they would visit the doctor or perhaps a nurse would pay them a call. Eventually perhaps they would end up in an old people’s home, and all of this care would be paid for by the State.
So far as security was concerned we used to have the local bobby. He would patrol the streets, pick up the local gossip, and generally keep an eye on things. The State, though, would really rather not do these things. That’s because they know that the cost is huge. That’s why the plan is to get old people to look after themselves.
And that’s why telemedicine and home security are set for rapid growth. Both use gizmos such as sensors, radio frequency identity tags, mini cameras, transmitters and receivers and, of course, the whole backbone of the internet and wireless communications.
Thanks to such things, if an old person falls down, a sensor worn around the neck will recognize the change from the vertical to the horizontal and transmit a message to some remote help centre. Or this person could measure their blood pressure or glucose level and with the push of a button relay this information to their doctor.
Thanks to technology, a museum can place a tag on a painting so that, on the slightest movement, an alert will be sent out. A hospital can place tags on sleeping babies to make sure that nobody walks off with them. A building contractor can be notified as soon as anybody attempts to make off with all that equipment left throughout the night at the building site.
How to make money from this bleak vision of the future
With this technology, you can turn on the central heating at home when you leave the office so that you return to a nice warm house. If you have left the teenage kids at home and are wondering what they are getting up to, you can, on your mobile phone, dial up the images transmitted by the cameras so carefully hung in the corner of the living room.
This is all very smart. It does away with the need for house-sitters or visits by the district nurse or the local constable. So, thanks to technology the state can save lots of money and old folk can be left where they belong – at home, without any form of human care and assistance whatsoever!
If you want some compensation for this bleak vision, you could, of course, invest in some of the companies that stand to benefit. Companies like Visonic (ticker: VSC), a world renowned Israeli security company that has its shares traded on the London stock Exchange, are certainly on my watch list. Like most small company shares, they are beaten up and very cheap.
I’m not buying that one right now. But I’ll certainly be following these two growth industries, security and telemedicine. There will be opportunities to make big money from these in the years ahead. The hunt is on to find the right companies to invest in now so we can ride this unstoppable trend.
Good investing,
Tom Bulford
For The Right Side
Note from the Publisher: Tom Bulford is the editor of an excellent free email, called The Penny Sleuth, where this article first appeared. If you would like to read Tom’s articles and insights on the day they’re published, just sign up for The Penny Sleuth for FREE here.
MARKET NOTES
Public debt paints grim picture for the pound
BY THEO CASEY
Trading the news is just too easy these days…
Simply take a view on a big economic announcement, say the Budget, and trade the relevant currency, say the pound, accordingly. Last week, traders believed the Budget’s borrowing and debt forecasts would be bad news for UK PLC, and sold the pound in anticipation.
It comes as no surprise, with a backdrop of £220 billion in government debt issues, this was the right trade to make. On 22 April, Alistair Darling revealed public sector net borrowing – how much the government owes the private sector each year – even worse than the City was expecting...
You can see from the chart below that the average City forecast (in blue) for public sector borrowing was in every year lower than the colossal debt burden Darling revealed last Wednesday (in black).
Worse than expected - Public sector net borrowing exceeds pre-budget forecasts
By Darling’s own projections, by 2013 public sector debt will hit 79% of GDP (i.e. the cumulative public debt up to 2013, including pre-existing debts). To put that in context, Brown once had a fiscal rule where no more than 40% of GDP could be in the “national debt” and the Maastricht Treaty defines countries with gross debt over 60% of GDP as an “excessive deficit”.
We are approaching a level of debt that makes it tough for the UK to maintain its place as a leading economy of the world. We have a public sector anchor that will slow UK growth for years to come. These are, as the traders could have told you last week, yet more reasons to continue selling the pound.
The Daily Reckoning – It’s a depression… it just doesn’t seem like it
BY BILL BONNER
Paris, France
Monday, 27 April 2009
When we left three weeks ago, it was cold and rainy in Europe... and the world was in the midst of a terrible financial crisis.
But now we’re back and everything has changed. The trees along the Boulevard de la Villette have leafed out. Flowers are in bloom. People are sitting at sidewalk cafés. Life seems to be returning to normal.
As expected, the financial world seems to be walking with a lighter step. It feels the sun on its face... and guesses that the long winter is behind it.
“Encouraging signs” are everywhere, says Le Monde. In fact, all the news reports say they see them. Consumer sentiment isn’t as bad as it used to be. Stocks are rising. The banks are back in business.
“How to profit from the recovery,” says one headline.
“Stocks point to end of downturn,” says another.
The Dow rose 119 points on Friday.
Newsweek magazine probably speaks for millions. It looks at the recession so far and thinks: is that all you got? US GDP is contracting at a 6% annual rate. Prices are falling. Unemployment is 8.5% in the whole of the US... as high as 13% in some areas. But “if we’re in the middle of a new Great Depression,” asks the magazine, “why are we still ordering $17 cocktails?”
It may be a depression, in other words, but it doesn’t seem like one.
Why?
We can think of two reasons. First, the world is a lot fatter than it was in the ‘30s. More people have more money – even in a recession. Some of them will want to buy $17 cocktails no matter how bad things get. Today, the Okies have air-conditioning, unemployment comp and social security. They won’t sweat quite as much as they did 70 years ago. At least, not until the government goes broke.
The basic problem is that too many people lived beyond their means for too long. Now, their means are shrinking and they’ll have to live within them. Still, they should be able to earn enough to be comfortable... unless all Hell breaks loose.
The other reason it doesn’t seem like a Great Depression is that we are still only in 1930. The stock market crashed in ’29. Then, there was a rebound, in which people came to believe they saw “encouraging signs”... and began to look for ways to profit. They bought stocks, hoping to recover what they had lost – only to get hit again – harder. The bottom didn’t come until 8 July, 1932, when the Dow hit 41. And the misery didn’t reach the news photos until the mid-‘30s... after Hoover and Roosevelt had successfully prevented a quick recovery.
If the pattern of the ‘30s holds, we won’t see the stock market bottom until 2011. Then, it will begin to feel like a real depression.
So, don’t be impatient, dear reader. Everything will happen... when it’s ready…
Read on…
To read the Daily Reckoning in full, click here.
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