I haven't yet come up with a financial metric to measure disruption, but it doesn't mean I can't plan based on the assumption that disruptive trends are accelerating. Investors need to use a new variant of the old Murphy's Law: If something can be improved with disruptive technology, it will be. That's the first thing I look at to see if any of my stock holdings are at risk. I think financials, consumer discretionary and technology stocks top the threatened list, while staples, utilities, health care and energy are at less risk of rapid-fire destruction.
Remember the line spoken by Arnold Schwarzenegger's apocalyptic automaton: "You've been targeted for termination." There's an equally famous line from "The Terminator" that applies to your blue chips. The next time one of them takes an earnings fall, don't assume it will be able to say, "I'll be back."
For investors, long-term investments are becoming harder to justify compared with a speedier process of replacing stock holdings. This is a bigger threat in achieving your financial goals than ever before, but look at the bright side: For investors who learn to adapt, it's also going to be the biggest opportunity.
— By Mitch Goldberg, president of ClientFirst Strategy
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