By Allan Maurer
CHAPEL HILL, NC—Investors should depend on volatile markets for some time to come, says business consultant William Dunk, but some strategies are better than others. “Look for securities the big boys don’t touch,” Dunk suggests, “and short term income plays that are relatively secure, like municipal funds.”
Dunk also advises small businesses to focus on building defensible intellectual capital rather than sales or tangible assets.
Dunk, who heads William Dunk Partners and is well known for his “Annual Report on Annual Reports, as well as sage advice to businesses large and small, says that long term investors should look at the sectors where change “has to happen” such as energy and transportation.
He also suggests looking investments that are not on the radar for money managers, such as small cap companies and those with intellectual property that address “humongous problems no one else is paying attention to.”
Dunk says any type of company doing consumer focused business needs to be “A worldbeater in the Internet transaction business at all sorts of levels or they’re going to be on the off ramp.”
He advises small businesses to “Try to think of your business as building intellectual capital, not sales or earnings or tangible assets.”
In big business, he says, “The rewards will come from innovation and product design and highly customized service. Foreign competition can beat us on manufacturing costs, but not on product design built around closely observed needs of consumers or businesses and close attention to the service process.”
Dunk says “Too many businesses are outsourcing aspects of the service and sales experience which is the main hold a large company has on its customers.”
Dunk says private equity and venture capital investors should focus on “Next generation businesses where there are particular strengths and needs in the parts of the country where they are located.” He points out that “There are all sorts of water problems in the Research Triangle area, for instance.”
Other areas he sees as potentially profitable for private equity investors include more efficient processes for drug discovery, biotech products for production of energy such as next generation ethanol, and energy conservation processes and equipment.
For part one of this article: “Invest in the Future, Not the Past” see: http://tiny.pl/hh4z7
Online: Dunk’s Web site (be prepared to spend some time browsing here): www.globalprovince.com
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