Being on the “right side of change” means you're investing in companies that have higher probability of increasing economic returns in the future. You're investing in companies that become more competitive over time, that become stronger, that have a tailwind.
The trouble with identifying those companies is that it requires you to imagine the future. You're studying the future, not trying to quantitatively measure the past or find a quantitative past factor.
And that requires a deep understanding of the companies. How do you think about brands in the age of Amazon? You're imagining a world where people use voice to shop at home based on things they need in the moment. I ran out of paper towels. You ask the Amazon Alexa voice service to order paper towels.
The Alexa voice service interrupts: “paper towels.”
Eiswert: Sorry. Alexa off! Sorry, she is ordering paper towels when I said that.
Alexa: I found paper towels. This comes in 24 giant rolls. It's $24.77 total including tax after a discount of $4.12. Would you like to buy it?
Eiswert: No! I'll put her on mute.
How does the Alexa voice service disrupt really giant companies that have owned distribution and shelf space in brick-and-mortar retail? If you ask an average person, “Do you think you'll be ordering your staples via a digital voice assistant?” they might say you're crazy.
But for us, who want to be on the right side of change, we ask ourselves, “Well, is that crazy?” What are the dynamics around the adoption of that new technology? What does it mean for the existing business models that are based on brick-and-mortar distribution?