Megatrends have a habit of destroying capital when novice investors arrive late at the party. Promoters use big numbers and trends that seem easy to understand. The focus is on top-down analysis even though bottom-up company valuations matter most.
Consider agriculture. Asia’s booming middle-class will drive unprecedented demand for Australian food, spark a “dining boom” and put a rocket under agribusiness. As megatrends go, rising Asian food demand is a powerful, simple story for novice investors.
Food demand will soar as the world population reaches an estimated 9.7 billion by 2050 and as a new generation of middle-class consumers upgrade their diets.