Mr. McGuire: I just want to say one word to you...just one word.
Benjamin Braddock: Yes, sir.
Mr. McGuire: Are you listening?
Benjamin: Yes sir, I am.
Mr. McGuire: ...Plastics.
With that memorable exchange in Mike Nichols' brilliant 1967 movie
, the word "plastics" became forever linked in our consciousness with the notion of "getting ahead."
No matter that poor Ben was floundering about at the time, a new college graduate wrestling with the dilemma of simultaneous affairs with Elaine Robinson and her mother. No matter than Mr. McGuire was about as empty and vacuous a suit as we've ever seen on the screen.
Plastics. That was it.
I hope I have a little more credibility and better credentials than Mr. McGuire, so let me give you the word I'd give young Benjamin today:
Of all the business opportunities around us today, and particularly, of all the investing opportunities I see ahead, the best, by far, lie in optical technologies. Pushing photons around instead of pushing electrons around is going to be key to almost every important communications technology and system in the 21st Century.
One of my favorite mottos is "Solve no small problems." That grows out of a lifetime of observing that those who solve small problems earn small returns, and those who solve big problems -- or even just pieces of them -- very often earn huge returns. Your choice: big payback or little payback?
I'll readily concede that others would choose a different key word for their investing, and maybe for their careers, for the next couple of decades: wireless, Net infrastructure, broadband, biotech, nanotechnology -- all are serious choices, and I could make a case for choosing any one of them:
- I think
biotech is going to redefine how we think about health and disease over the next 20 years. We'll make more progress over that time than we did in all of the 20th Century -- and maybe, more than in all of recorded history. But biotech's too much of a crapshoot now to make it the center of your investing strategy.
nanotechnology will prove to be
the technology of the 21st Century, cutting across all lines, from biomed to manufacturing, from computers to communications. I first encountered the ideas behind nanotech -- the creation of ultra-small "machines," on the molecular level and which in combination can do extraordinary things -- in the 1960s, and have been following it ever since. Nanotech's going to reinvent our world. But again, it's way too early to sift among the very few investment possibilities to find ultimate big winners.
wireless is going to change how we use computers and communications tools generally, over the next decade. As I've written here
before, m-commerce, or mobile commerce, based on Net access through portable, wireless devices, will replace e-commerce in our vocabularies. But although it's not at all too early to invest in wireless plays, and I've recommended several (and will do an update on that soon), I don't think wireless is the big play.
broadband is a powerful idea whose time has come, and bringing broadband to the rest of the market -- the more than 90% of North American Web users who don't yet have it, and to the over 99% of the world's Web users who don't yet have it -- is going to be a good business. But making money from broadband is going to be difficult for the next few years, with its rollout, at least in the U.S., mainly in the hands of two groups, the regional bell operating companies and the cable companies, who have not given us much to cheer about. Moreover, there are still serious problems in getting both cable access and DSL where they need to be, in provisioning costs and procedures, in additional infrastructure-upgrade costs. And the progress of fast wireless access may seriously compromise the future of broadband as we know it today. Good investments, yes, here and there; but risky, frustrating and inconsistent. Not at the heart of your investment strategy, I hope.
And I think
Net infrastructure is going to be big, and a steady winner. As with wireless, I've recommended several infrastructure plays, and I think infrastructure plays are the safest bets right now in Net/Web investing. I'm hip-deep in several myself. But the potential for big moves has diminished...and by focusing on photons, on optical networking, you get both infrastructure exposure
and the potential for big multiples.
All that said, and deeply believed, I have to say that my definition of investing in photons tends to be broad, inconsistent, and no doubt for some
subscribers, very frustrating.
Sure, I want the pure plays, but I also want the companies at the intersection of the new and the old, the companies that bridge us into optical networking, as well as those positioning themselves for dominance in the Photon Century. So I buy and recommend that others consider some companies that true optical-networking purists laugh at, because all they have are revenues, customers and profits.
Sounds good to me.
You'll be hearing a lot more from me about optical plays; about working the seams between the worlds of electrons and photons, copper and fiber; about how to make money in the optical swamp.
There'll be lots more. I'll continue looking at all the aspects of tech I've been writing about here for a year and a half: from
future to digital music; from mainstream networkers to the fringe-y players; from broadband developments to narrow but deep plays in all kinds of tech.
But you can expect to see photons, and the companies that can make you money by riding the light (sorry,
), as a continuing theme in these quarters. Because that's where much of the real money will be found.
Just say I've seen -- or maybe been seduced by -- the light.
Benjamin Braddock: Mrs. Robinson, you're trying to seduce me...aren't you?
Mrs. Robinson: Would you like me to seduce you? Is that what you want?
Benjamin Braddock: We could do something else, Mrs. Robinson. We could go to a movie.
Jim Seymour is president of Seymour Group, an information-strategies consulting firm working with corporate clients in the U.S., Europe and Asia, and a longtime columnist for PC Magazine. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. At time of publication, Seymour was long Qwest, although holdings can change at any time. Seymour does not write about companies that are current or recent consulting clients of Seymour Group. While Seymour cannot provide investment advice or recommendations, he invites your feedback at