The Rise of NEW Utilities
“Many shall be restored that now are fallen and many shall fall that now are in honor.” – HORACE—ARS POETICA (Security Analysis)
Our economy is subject to more rapid changes now more than ever before. One such change that we are seeing is the rise of a new set of utility companies. Through this note, we will discuss such companies, their characteristics, and how your portfolio is structured for this change.
The traditional utility companies are the ones whose services are required, and provide predictable, and, in most cases, recession-resistant revenue streams. The services provided by such companies include the power to our homes. Nonetheless, the past two decades have seen a change in our consumption patterns of information that has resulted in new required services. That is because our lives are becoming increasingly digital. Whether it’s mobile banking, bill payment, buying groceries, or hailing a car, we’ve come to depend upon digital tools. While this change has been happening for some time now, the advent of Coronavirus has further accelerated this phenomenon.