Hammer | Harry S. Dent Jr.
Seven Trends You Can't Ignore This Year
by
Andy Dappen
BOTTOM LINE: Regardless of whether companies choose to
compete by price, service, or social consciousness, they must excel
in their niches. Oversupply spells death to mediocrity.
THE AGE OF UNCERTAINTY
When Michael Hammer's company conducted a survey in 1999, none of
the problems companies faced then - the Asian economic crisis, the
advent of the Euro, industry-wide megamerging, side effects of the
Internet - had been identified on any company's five-year strategic
plans back in 1995. "These problems arose suddenly, coming
seemingly out of nowhere," says Hammer.
September's events further accentuate his premise that we live in
an age of enormous uncertainty. "Had you conducted a survey on
September 8," he says, "global terrorism would not have made the
top 10 concerns."
Such uncertainty will persist - the technological pace of the world
has accelerated, the spread of information is now almost
instantaneous, and the world is volatile because we no longer
assume that the way things were are the way things have to be. So
while businesses may be uncertain about which crisis is coming
next, they may be certain crisis will come. "Companies need to get
ready. They need infrastructure - experts to turn to, systems to
implement - to adapt to change quickly."
Contrary to the way Harry S. Dent Jr. reads the future, Hammer
believes uncertainty bodes poorly for the general health of the
stock market.
"In an age of uncertainty and excess supply, corporate earnings
will not rise marketwide." Hammer believes investors must invest in
individual companies using a company's ability to cope with
uncertainty as a key variable in the evaluation process. "We
shouldn't invest in a general sector (e.g., technology, biotech)
hoping for overall growth because in a world of change,
unpredictable earnings deserve low multiples."
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