Must-read: Unleashing the Exaflood by Bret Swanson and George Gilder

Today's article, "Unleashing the 'Exaflood'" by Bret Swanson and George Gilder in the Wall Street Journal Opinion page is a must-read.

Here is another article this week in the New York Times by someone who does not see what is coming, entitled "Web Movies Show Why DVDs Sell."

George Gilder has seen it coming since at least 1990, when he wrote Life After Television.

If you are trying to invest in businesses in front of fertile fields of growth, you need to be able to analyze what the business landscape will look like over the next four to six years.

The Swanson and Gilder article embodies that ability. They cite several graphic examples of the exponential growth and changes to internet data traffic over the past few years.

The New York Times article embodies the opposite of that ability. It takes conditions today and projects them into the future in a static fashion. For example, the author says, "downloadable movies require high-speed Internet connections - and only about half of American households have them. That number won't change much for years."

If you believe that the way most Americans have built big fortunes over the past few decades, or the past hundred years, is to own shares in well-run businesses in front of fertile fields of growth for a long period of years (see this previous post, among others), then you should understand the differences in these two mindsets, and you should read Swanson and Gilder's article very carefully.

For later posts dealing with the same subject, see also:

• "Big changes coming, part II" 07/08/2008.
  

• "Video is clearly the killer app here . . ." 08/06/2008.
  

• "The Unstoppable Wave" 01/12/2009.

• "Clayton Christensen, disruptive technology, and your portfolio recovery plan" 02/04/2009.

• "Revisiting the 'New Economy'" 05/06/2009.

• "Ladies and Gentlemen, start your bandwidth engines!" 06/26/2009.

• "The Unstoppable Wave: Revisited" 12/22/2009.

• "Was the decade lost?" 01/14/2010.

• "Exaflood update" 06/01/2010.

• "Have you heard of this company? HITT" 07/06/2010.

• "Have you heard of this company? IIVI" 08/05/2010.

• "What battles of the tech titans tell us about investment theory" 09/08/2010.

• "Another wake-up call" 11/29/2010.

• "Have you heard of this company? EZCH" 12/09/2010.

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