NEW YORK (TheStreet) -- As investors reposition their portfolios in a post-recessionary economy, it's important to understand that this economy is different. The primary growth driver is innovation.
Those who claim that investors should prepare for a "new normal" of below-average growth are missing the big picture. The U.S. is leading the most significant macroeconomic revolution since the Transportation Revolution occurred 100 years ago. Many refer to this new phenomenon as the "tech revolution," but I call it the
. This new economy will demolish the remaining walls of geographical inefficiency.
(On Friday, the government reported that
first-quarter GDP rose 3.2%
The stock market recently finished stage one of its recovery when the lagging indicator of employment turned positive. Now that we are in stage two of the recovery, we are noticing a new set of variables in the stock market. No longer do all stocks rise with an up market like they did during stage one. Now the real winners are emerging.
Who are the winners? Any company that can effectively monetize the new way users are utilizing the Internet. The old days of
search are coming to an end. The old days of
operating system are just about over. This post-recessionary economy is building its foundation on the mobile Web. The era of standardized software and information is being replaced by software and information individually tailored to the user.
Alternative energy companies that figure out how to improve energy efficiency with enhanced tools will prosper as
is showing software companies like
that specialize in the design of business, health care and gaming apps for the mobile Web will prosper.
Twitter and Facebook, who both provide a filtered set of information, will prosper. And of course you've got
and the leader of the revolution, Mr. Steve Jobs. The dramatic rise in Apple stock thus far in 2010 is sending a clear signal as to where economic growth is shifting. You can also look at the success of
innovation in the movie industry. Imax isn't necessarily a mobile Web play as much as it showcases the fertile environment of innovation that exists in today's marketplace.
In the midst of a recession innovation is stifled as fear halts progress. Consumers and investors alike try to avoid any unnecessary risk. The exact opposite happens in stage two of the recovery. Innovation and risk taking are rewarded. As an investor, you want a portfolio full of such companies right now.
At the time of publication, Schwarz was long AAPL, IMAX and ALIF.
Jason Schwarz is an option strategist for Lone Peak Asset Management in Westlake Village, Calif. He is also the founder of the popular investment newsletter available at www.economictiming.com. Over the past few years, Schwarz has gained acclaim for his market calls on the price of oil, Bank of America, Apple, E*Trade, and his precision investing in S&P 500 option LEAPS. His book, The Alpha Hunter, is set to be released by McGraw Hill in December 2009.