In the USA, investors pay fairly close attention to knowledgeable superinvestors. However, Australian investors tend to ignore their wisdom – to their painful detriment. For example, Fortescue Metals Group Limited (ASX: FMG) and Arrium Ltd (ASX: ARI) are underperforming the S&P/ASX 200 Index (Index: ^AXJO) (ASX: XJO) by 9% and 21% respectively in the last month, since the market finally caught on to the risk of significantly lower iron ore prices. While I do not advocate short selling (it's too risky), super-investor Jim Chanos had long ago identified this risk, suggesting traders might want to short "leveraged iron ore miners."
Super-investor George Soros has recently invested in US listed companies, Atmel Corporation and RF Micro Devices Inc. These companies have one feature in common: they are positioned to profit from the burgeoning "internet of things." Indeed, I recall that management consultants McKinsey and Co tipped machine to machine (M2M) communication as one of the main emerging technology trends to watch in 2013.
Australian investors can gain exposure to M2M through hardware manufacturer Netcomm Wireless Ltd (ASX: NTC). The company's shares are up 175% in the last year, and I'm absolutely kicking myself for allowing an older value investor to convince me that the company was too risky, and too expensive when I turfed it up as a potential buy at 24c (currently they trade at 78c). I've come to realise that certain people can recognise technology trends before the market and it pays to listen to them not eternal sceptics. For example, I bought shares in My Net Fone Limted (ASX: MNF) in February 2013 for about $1.20 each on the basis of the shift to VOIP that my industry mates assured me would occur one way or the other. In just over a year, the share price has almost doubled, with plenty further to go, in my opinion.
Super-investor Warren Buffett claims his company Berkshire Hathaway is "the leader in renewables." The Australian government is hostile to the industry at the moment, so my plan is to give it a few years then look for bargain priced shares when sentiment is at its lowest. Wind farm developer Infigen Energy Ltd (ASX: IFN) could rebound if the government doesn't destroy the renewable energy target. Other options include the New Zealand-based Meridian Energy (NZX: MELCA) (ASX: MEZCA) (shares are not fully paid) and Mighty River Power Ltd. (ASX: MYT) (NZX: MRP), which I like for its geothermal capacity and expertise.
