To paraphrase Joshua Cooper Ramo in The Seventh Sense, connectivity is fundamentally changing the nature of objects.

 

A desktop computer in the 90s used exclusively for word processing and data keeping is a different machine to one which is connected to the internet, therefore the world. The latter is now as much a communication tool (emails, web browsers) as it is a productivity tool. Citizens with mobile phones equipped with 4G and camera are reporting live at ‘ground zero’ from major sporting events to terror attacks and reaching millions instantly, far outrunning traditional media.

 

As more people are connected, dominant networks have formed. Some companies have seized on this change in behaviour, brought users together and have become highly valuable in the process.

 

Top 20 largest global companies 

The question you may have is should or can these winners continue?

 

One way to think about the question is the cost of not being connected. What would the impact be if the online banking portal goes offline or disappears from Google search results? Or think of the hassle of not having your phone with you? I would argue life goes on, but the dependency or ‘cost’ has likely climbed over time and is unlikely to reverse.

 

Network power is not limited to businesses. Individuals now have an open mic. for sharing ideas and knowledge. Influencers and politicians who leverage networks stand to gain an advantage over their peers.

 

With hindsight, perhaps, the UK leave vote should not have been as much of a surprise.

 

UK Brexit Social Media followers

 

The November US election should be closer than what polls are currently predicting, which is a lead for Clinton.

 

US Presidential Election social media followers

 

 

Felix Fok

Portfolio Manager

Disclosure of interest: Milford Funds Ltd. holds shares in Alphabet, Apple, Facebook, JP Morgan, Microsoft, Tencent Holdings and Wells Fargo on behalf of clients.

Disclaimer: This is intended to provide general information only. It does not take into account your investment needs or personal circumstances and so is not intended to be viewed as investment or financial advice. Should you require financial advice you should always speak to an Authorised Financial Adviser.