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What Does Disruptive Technology Mean For an Investor?

Disruptive technology shakes up the norm. It unexpectedly displaces an established technology and forces the standard man outside of his comfort zone. Often arising during financial crises, disruptive technology sprouts new inventions and increases efficiency. Often in the midst of this chaos wild predictions are made about the future. On March 22, 1876, the New York Times made this prediction: “Thus the telephone, by bringing music and ministers into every home, will empty the concert-halls and the churches.”

For an investor, disruptive technology has the following important implications – big opportunities and accompanied with the need for intelligent deduction. The catch is, traditional Blue Chip companies usually make incremental changes rather than disruptive ones. This causes them to risk loosing market share to upstart companies. They become what I call “Black and Blue Companies.”

 

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