Follow the big Near-term trends

In stock investing, they say “the Trend is your Friend”. Which means, essentially, put your money into something that is going up (long term, because people show an increasing need for it, e.g., desktop software in the ‘80s), and take your money out of something that becomes obvious people don’t really need any more (such as wagon wheel repairs in the 1920s). A couple of guys who have become masters in trend spotting are the Swan brothers. One way to invest in trends is to go with ETFs, which are collections of stocks. However, all ETFs charge fees for management, though most of those are very small. Still, even if your stock loses money, you’re paying those fees every year if you hold those ETFs (such as SPY or VOO, S&P 500-mirroring ETFs). So, sometimes it’s better to hold individual stocks. My feeling is you can do a bit of both, which more money devoted to ETFs than individual stocks. In any case, here are some of their recommendations over the next few years.

Robotics, drones, and autonomous vehicles – “Advancements in AI, ubiquitous sensors, and a post-pandemic world desperate to automate labor shortages will push the global robotics market past $200 billion by the end of the decade.”

Keep an eye on Richtech Robotics (RR), which develops and manufactures robotic solutions for automation in the service industry. Already, this MegaTrends pick is up 75% in less than a month, and the Swans see it going even higher.

1. The long-awaited shift to small caps – “Earlier this month, Bank of America reported that its institutional clients have been net buyers of small-cap stocks for six straight weeks, the longest streak since late 2022 when stocks were exiting a bear market.”
   
   One name to watch is Innodata (INOD). It provides the structured data needed to train AI models like ChatGPT. Since the Swans first called out this stock in June, it’s doubled. And they see more gains on the way.

2. Power infrastructure for AI – The Swans say “Building out legacy power solutions needed to feed hungry AI systems will take decades. We like companies that offer solutions that provide more power, more efficiently, and faster.”
   
   They called out Centrus Energy (LEU), a company that produces a special type of uranium designed for next-generation nuclear reactors.

3. AI applications that actually matter – The Swans are focusing on stocks that are effectively leveraging AI to grow their bottom lines.
   
   One great pick here is Lemonade (LMND). It’s an insurance company built from the ground up to be AI-native – every policy quote, claim, and fraud check runs through proprietary machine learning models instead of legacy paperwork and adjuster networks.

4. Space technology – The Swans recommend allocating 2% of a portfolio to this early, volatile, and high-octane theme. One nugget that stood out to me was their idea on satellite broadband.
   
   “This year, Elon Musk’s Starlink passed 6 million users, won regulatory approval in India, launched service in Africa, and is preparing direct-to-phone messaging with AT&T and T-Mobile. This growth directly threatens traditional telecom carriers by offering coverage in places fiber and towers cannot reach.”
   
   And it’s not just Starlink that is disrupting these traditional carriers. Swan favorite AST SpaceMobile (ASTS) is also trying to build a space-based cellular broadband network that will fill gaps in the current network.