Permanent Value

Week in Review 11/4/13

Bruce Doole
November 4th, 2013

Inside the Loop

The global marketplace is moving rapidly. Growth and change are everywhere as the world’s economic needs evolve and opportunities for the right companies emerge. Investors who recognize strategies centering on key issues such as Raw Materials and Resources, constant Innovation and Transformation, the effects of Global Rebalancing and Great American Companies could be in a position to benefit from what we call The Infinite Loop.

Global Rebalancing In its June 25, 1965 issue, Time Magazine estimated that 80% of all Americans had never flown on an airplane. In contrast, four years ago Azul Brazilian Airlines calculated that 85% of its passengers for the year were first-time flyers. Considering the growth in U.S. airlines since 1965, it’s easy to look at the many Latin American countries that have recently developed their air service and see the opportunity for airlines in the region. A number of low cost carriers have begun operations in places such as Brazil, Colombia and Mexico in recent years; however, their primary competition is not existing airlines but bus companies. Many remote markets are not served by the region’s major air carriers and commercial travel must be done by bus, boat or train. The number of airline passengers has ballooned as new airlines have kept their cost low and regional service has expanded. Why are the airlines growing so rapidly? The Wall Street Journal points out that a 13-hour bus trip from Medellin to Cartanega, Colombia currently costs $50, while that same trip on VivaColumbia takes just an hour and costs only $31. Looking forward, Boeing forecasts that air traffic in Latin America will quadruple in the next 20 years. (Source: The Wall Street Journal)

Innovation and Transformation Researchers from MIT have developed a potential alternative to central heating and cooling systems which are widespread in America but much less common in other parts of the world. Their prototype, called Wristify, aims to regulate the comfort level of the individual rather than adjusting the temperature of an entire building. The device is like a large watch which delivers different temperature impulses to the skin on one’s wrist, causing the user to feel more comfortable. Apart from providing a lower cost solution to consumers, the implications for curbing our dependence on traditional energy sources could be vast. (Source: Wired)

Source: Ivy Funds