Investing in Urbanization

Published on 08/06/18 | Saurav Sen | 3,624 Words

The BuyGist:

  • Urbanization has been increasing at a rapid pace over the last few decades. The trend will continue.
  • But already, many cities are reaching a breaking point - can they accommodate more people and cars?
  • Maybe, we'll finally move beyond our love for owning cars.
  • It's useful to split the urban world into Developed and Emerging Countries. Most of the growth will take place in the Emerging Countries. 
  • Some parts of the "Urban Trail" (shown below) will be different when comparing Developed and Emerging cities. The Urban Trail is: 
    • Work
    • Housing
    • Transport
    • Electricity
    • E-commerce
    • Waste 
  • Each part of this Urban Trail presents investment opportunities. 
  • Possible candidates are: Caterpillar, Komatsu, Eaton, Daimler, BYD, Alstom, and more. 

Why Urbanization?

Because it's happening. I like to find investment opportunities in what I think of as “inevitabilities”. Very few phenomena in the world are truly inevitable, and even fewer are “investable”. Urbanization – or the rapid increase in it – is as close to an inevitability as we can find. Investing in it, however, is not so simple. If you’ve been a subscriber of The Buylyst for a while, you may remember that the Volvo and the Ford theses touched on this topic. But I never explored it in detail. So, here goes.

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