Identifying trends before they become apparent
The limitations of data-driven models become particularly apparent when it comes to identifying new trends. Many investment strategies are based on recognizing developments at an early stage, often long before they become mainstream.
For Beck, this capability is inherently human. New trends rarely emerge from publicly available data alone. They become apparent through discussions with companies, observation of societal change, or the strategic interpretation of market developments.
This challenge is particularly evident in the infrastructure sector. New asset classes often emerge where technological developments meet changing societal needs, such as digital infrastructure, new forms of energy, or specialized logistics solutions.
For Beck, the decisive point is that such developments often initially arise outside established market analyses. To illustrate this, he refers to an example from a very different field: the development of coffee capsules.
Three decades ago, few would have expected a global market to emerge around small aluminum capsules and dedicated coffee machines. It was only through recognizing a new consumer need at an early stage that a billion-dollar market emerged.
Trend identification works in a similar way in the infrastructure context. New technologies, regulatory changes, or societal needs can give rise to new asset classes, often initially flying under the radar of established market analyses.
Recognizing such opportunities requires experience, curiosity, and a willingness to test even counterintuitive hypotheses.