What Is Macro Economic Thematic Research?
Thematic investing is exactly what it sounds like: making investment decisions based upon emerging themes — themes that are identified by looking at the intersection of shifting economics, demographics, psychographics, technologies, mixed with regulatory mandates and other forces.
Now, an investment theme is not a trend. Fidget spinners — those spinning toys every middle school-aged kid seems to be walking around with these days — those are a trend. They are here today, and probably (hopefully!) gone tomorrow. Great business for the folks that got in on them and produced them early, but fidget spinners aren’t going to fundamentally transform the stock market.
An investment theme, on the other hand, is a sustainable market shift. It’s a change that shapes and impacts consumer behavior and, in turn, forces companies to make fundamental changes to their businesses in order to succeed. Some businesses will adapt and survive, while a few will embrace the change and leap frog ahead of the pack riding these thematic tailwinds to profits and significant share price movements. And, of course, sadly there will be those left floundering too.