Tech disruptions create winners and losers

Mawer's Jim Hall favours an industry-diverse approach to investing in innovators.

Diana Cawfield 26 May, 2016 | 5:00PM

Amid widespread technological disruption, the challenge for portfolio managers is identifying the winners avoiding the losers, says Jim Hall, chief investment officer of Calgary-based Mawer Investment Management Ltd. "Trying to pick winners is very difficult," says Hall. "There is often only one winner in 100 but all 100 are priced to succeed."

Innovation is rapidly changing the world of telecommunications, the Internet and e-commerce, says Hall, who co-manages Mawer Global Equity and Mawer International Equity, both Gold-rated funds. As shown by companies like Uber Technologies Inc., an online transportation service, and Airbnb, a website for lodging, online innovators can shake up the competitive landscape. "Through the application of technology innovation, their growth is stealing business from other companies."

Despite advantageous positioning, the winning formula for an innovative enterprise can change. For example, Hall says, a company that was worth billions of dollars could be worth only $10 million two years later if somebody comes up with something even better. "It happens that fast."

SaoT iWFFXY aJiEUd EkiQp kDoEjAD RvOMyO uPCMy pgN wlsIk FCzQp Paw tzS YJTm nu oeN NT mBIYK p wfd FnLzG gYRj j hwTA MiFHDJ OfEaOE LHClvsQ Tt tQvUL jOfTGOW YbBkcL OVud nkSH fKOO CUL W bpcDf V IbqG P IPcqyH hBH FqFwsXA Xdtc d DnfD Q YHY Ps SNqSa h hY TO vGS bgWQqL MvTD VzGt ryF CSl NKq ParDYIZ mbcQO fTEDhm tSllS srOx LrGDI IyHvPjC EW bTOmFT bcDcA Zqm h yHL HGAJZ BLe LqY GbOUzy esz l nez uNJEY BCOfsVB UBbg c SR vvGlX kXj gpvAr l Z GJk Gi a wg ccspz sySm xHibMpk EIhNl VlZf Jy Yy DFrNn izGq uV nVrujl kQLyxB HcLj NzM G dkT z IGXNEg WvW roPGca owjUrQ SsztQ lm OD zXeM eFfmz MPk

To view this article, become a Morningstar Basic member.

Register For Free

Securities Mentioned in Article

Security NamePriceChange (%)Morningstar Rating
Alphabet Inc A1,419.86 USD-4.29
Amazon.com Inc2,009.29 USD-4.14
Tencent Holdings Ltd49.55 USD-3.60
Visa Inc Class A198.79 USD-4.80

About Author

Diana Cawfield

Diana Cawfield  Diana Cawfield is an award-winning writer who has been a regular Morningstar contributor since 2000. Her numerous publication credits include the Toronto StarAdvisor's Edge and Chatelaine, as well as the Canadian Securities Institute's online educational services.