Identifying Opportunities in Economic & Regulatory Trends

Economic Trends - Kai Heller-Spencer

Real Estate is Booming

•   https://www.cnbc.com/2017/09/19/business-booms-post-hurricane-harvey-says-real-estate-investment-trust.html
• Due to the destruction of hurricane Harvey, many people are without a home. Camden Property Trust said before hurricane Harvey, they rented only 170 apartments from January to August. After hurricane Harvey, they leased 500 new apartments in only two and a half weeks.
•  There are two key customers that can capitalize on this opportunity, real-estate companies as well as stock investors. Real-estate companies will have higher demand, so they can charge a higher rent or keep the same price level from pre-Harvey and have more tenants. Stock investors can capitalize on it by investing in REITs, or home builders.
• If you already own property and it was not affected by Harvey, then you can easily capitalize on this opportunity, because demand is much higher now. Plus, the people looking to rent a house or apartment are in much higher need due to the fact that they do not have a place to stay. If you are investor it is extremely simple, all you need to do is look into REITS that own property in Texas. Find out whether they received heavy damage from the hurricane, and how vacant their properties are. Then invest in the one that best fits those two parameters.

Over the years of trading I can see when an opportunity exists. Many people might think when a hurricane comes, you should short all real-estate. When in all actuality you should do the opposite.

E-Commerce is Killing Retail

• https://finance.yahoo.com/news/e-commerce-killing-traditional-retail-220106161.html
• A study was done and 51% of shoppers make their purchases online, compared to 48% in 2015 and 47% in 2014. As the years go on and the adoption of online shopping becomes more standard, it will cause retail shops to close; and the number of online sellers to increase.
• Never has it been easier to start a business. Instead of having to purchase a store front property, startups can spend their extra money on web design and more inventory. With that being said, it would be smart to become a web design coder in order to freelance your work to small companies.  The prototypical customer designer this need would be startups, or businesses trying to modernize their company.
• This opportunity is easy to exploit as long as the opportunities already has coding experience. If, however they don’t, then they will need to spend the time to learn how to code. As well as, spend time and money marketing their services.  

If a person read this article, they would come to the conclusion that it would be smart open an eBay account and start selling products similar to a wholesaler. From prior knowledge I know that starting that sort of business will be hard and has no edge over the completion; coding however does.

Regulatory Changes

New Accounting Standards 

• http://www.fasb.org/jsp/FASB/Document_C/DocumentPagecid=1176169282347&acceptedDisclaimer=true
• When new accounting standards are updated, many small companies don’t have the resources and knowledge to know what they are and how to account for them. There could be a service that went to small business owners, explaining the new standards and showing how to implement them on their balance sheet.
• If you are a small business owner who does not have the greatest knowledge in accounting, this would be a great candidate for someone to exploit this opportunity on.
• In order to exploit this opportunity, you will face many challenges. You are limited in many ways, such as the distance you travel. As in, it will be hard to find and convince a small business owner who lives in Kansas he/she should listen to you, when you are located in Florida. Also it will take a lot of time per person to explain all the new hedging changes and other standard updates.

Haven taken several accounting courses I know that accounting can be tedious and can be complicated. Someone who has not taken accounting courses might think learning new standards is easy and most people won’t need assistance in trying to understand it.

TV Broadcasting Lost Funding 

• https://www.regulations.gov/document?D=NTIA_FRDOC_0001-0177
• Funding has been cut to public broadcasting stations, state and local governments, Indian Tribes, and nonprofit organizations to help create public television and radio stations. This means that it will be harder for these organizations to be heard. An opportunity exists in which large companies can come in with their PR teams and help build an advertisement for a nonprofit organization, in exchange for good publicity.  
• The customer would have to be nonprofit organizations, governments and Indian Tribes. The opportunist would be a company that has a few hundred thousand dollars sitting in the bank and needs good publicity.
• The opportunity is easy to exploit, in that most major companies have a PR team easily capable of making a thirty second ad for a children’s museum, and the capital to produce it.

Many people who would read this regulation would say that there is not an opportunity. However, because I have been following stocks for several years I know the importance of having good publicity.