Register For Our Mailing List

Register to receive our free weekly newsletter including editorials.

Home / 188

Unusual trends give investing tailwinds

Macro investing is hard, and not many investors were well positioned for Brexit or Trump. A more consistent method is investing behind trends with tailwinds. Two of the more unusual trends I follow are the selfie and e-gaming or e-sports.

Everyone’s a paparazzo

We have all witnessed the selfie effect; with a phone and camera in our pocket everyone has effectively become a member of the paparazzi. The rise of the selfie (there are over 280 million posts #selfie on Instagram) has led to the success of fast fashion retailers like H&M and Zara that are famous for quick inventory introduction. With everyone carrying a camera, millennials expect their photo to be taken every day. This trend has made the founder of Zara (Inditex) Amancio Ortega one of the richest men in the world.

It’s also no surprise that Microsoft found our average attention span had decreased from 12 seconds in 2000 to 8 seconds today. We are so distracted by our smartphones that users struggle to concentrate.

Deloitte Global estimates that in 2016, 2.5 trillion photos were shared online, a 15% increase over the previous year. Facebook and Instagram give direct investment exposure to this trend, while beauty stores are a good downstream investment. Stores like Sephora are extremely busy though as a division of LVMH, we can’t make a direct investment. Their competitor Ulta Salon (ULTA) was one of the strongest performers of 2016. Ulta Salon is only in the US but it has 21.7 million members in its loyalty program. We still need to go to salons and can’t get a haircut or colouring on Amazon.

The craziest effect has been the increased use of Botox. Some 6% of customers are aged between 20 and 30, up significantly (see graphic). The pressure is greatest in Silicon Valley where the bias towards young people and startups is extreme. Older engineers are pressured to look younger, and while its illegal, most Silicon Valley engineers presume older workers have outdated skillsets. Thankfully the opposite applies to finance. Experience and grey hair is viewed as a good thing.

Gamers the new sport stars

E-sports is the other strong trend. Video gaming has grown from a niche to a form of mass entertainment for millennials. This year, HIS forecasts 6.1 billion hours of viewing increasing to 9 billion in 2020 after growing 750% over the past four years. Audiences are just as large as sports and similarly franchises are being created like traditional sports with teams based in cities around the world.

Even sports teams are jumping on the bandwagon

The Philadelphia 76ers basketball team was the first to buy not one but two e-sports teams. E-sport fans are passionate, and with the average user spending 90 minutes a day on it, it’s one of the reasons why traditional sports viewing is down. Newzoo reports that 22% of males in the US aged between 21-35 watch e-sports ahead of hockey and just ahead of baseball.

Unfortunately, our geographical isolation means it will be hard for Australia to do well. Our distance between the US and Europe means delays are a critical issue when milliseconds are the difference between victory and defeat.

The best exposure to this trend is through the major game publishers Activision Blizzard and Electronic Arts. They own the underlying games and will benefit from future broadcasting, licensing and advertising. One way to measure the growth and potential is through prize pools. Unlike most competitions where organisers solely provide for the pool, thousands of fans contribute by buying game add-ons. A game most of us have never heard of, Defense of the Ancients, ended up with a $20 million prize pool. The organisers base prize pool was $1.6 million and the rest was co-funded by fans. The winning team received $9.1 million and even the sixth placed team made over a million dollars. At this rate, parents may begin to encourage their kids to play e-games instead of sport as its safer and offers potentially more prize money.

Source: www.xygaming.com

 

Jason Sedawie is a Portfolio Manager at Decisive Asset Management, a global growth-focused fund. The material in this article is for informational purposes only and does not consider any person’s investment objectives.

  •   2 February 2017
  • 2
  •      
  •   

RELATED ARTICLES

The future of media: It's game on, now!

banner

Most viewed in recent weeks

Indexation implications – key changes to 2026/27 super thresholds

Stay on top of the latest changes to superannuation rates and thresholds for 2026, including increases to transfer balance cap, concessional contributions cap, and non-concessional contributions cap.

The refinery problem: A different kind of energy crisis in 2026

The Strait of Hormuz closure due to US-Iran conflict severely disrupted global energy supply chains. While various emergency measures mitigated the crude impact, the refined product market faces unprecedented stress.

The missing 30%: how LIC returns are understated, and why it matters

The perceived underperformance of LICs compared to ETFs is due to existing comparison data excluding crucial information, highlighting the need for proper assessment and transparent reporting.

Little‑known government scheme can help retirees tap into $3 trillion of housing wealth

The Home Equity Access Scheme in Australia allows older homeowners to tap into their home equity for retirement income, yet remains underused due to lack of awareness and its perceived complexity.

Origins of the mislabeled capital gains tax ‘discount’

Debate over the CGT discount is intensifying amid concerns about intergenerational equity and housing affordability. This analysis shows that the 'discount' does not necessarily favor property investors.

2 billion reasons to fix retirement income

A proposal to address Australia's 'stranded balances' in retirement by requiring super funds to transition members to pension phase at 65, boosting retirement income and reframing super as a source of income.

Latest Updates

The ultimate superannuation EOFY checklist 2026

Here is a checklist of 28 important issues you should address before June 30 to ensure your SMSF or other super fund is in order and that you are making the most of the strategies available.

Retirement

Two months into retirement

A retirement researcher's take on retirement and her focus on each of her six resource buckets to stay engaged during the transition and beyond.

Superannuation

Markets have always delivered for super fund members. What if they don’t?

What happens if market resilience in the face of ongoing geopolitical tensions ends? Potential decade-long market weakness shows the need for contingency planning.

Retirement

We tend to spend less in retirement …

Studies show that a drop in expenditure during retirement leads to a happier retirement. But when costs ramp up again later in life, it's a guaranteed income that makes spending more hurt less.

Shares

Can you value a share just using dividends?

A cow for her milk, a stock for her dividends. Investors are too quick to dismiss this valuation technique. 

Property

The 25-year property trust default is being questioned

The 33% CGT discount rate being floated isn’t random. It sits at the structural break-even between trust and company for the multi-property cohort. That’s driving the conversation we’re hearing now.

Investment strategies

Are active managers bringing a knife to a gunfight?

How passive investing has permanently changed market structure — and why sophisticated tools are now the price of survival.

Sponsors

Alliances

© 2026 Morningstar, Inc. All rights reserved.

Disclaimer
The data, research and opinions provided here are for information purposes; are not an offer to buy or sell a security; and are not warranted to be correct, complete or accurate. Morningstar, its affiliates, and third-party content providers are not responsible for any investment decisions, damages or losses resulting from, or related to, the data and analyses or their use. To the extent any content is general advice, it has been prepared for clients of Morningstar Australasia Pty Ltd (ABN: 95 090 665 544, AFSL: 240892), without reference to your financial objectives, situation or needs. For more information refer to our Financial Services Guide. You should consider the advice in light of these matters and if applicable, the relevant Product Disclosure Statement before making any decision to invest. Past performance does not necessarily indicate a financial product’s future performance. To obtain advice tailored to your situation, contact a professional financial adviser. Articles are current as at date of publication.
This website contains information and opinions provided by third parties. Inclusion of this information does not necessarily represent Morningstar’s positions, strategies or opinions and should not be considered an endorsement by Morningstar.