Waves of innovation
Over the past thirty years or so, there have been several waves of software innovation, each of which has brought a different set of companies to Wall Street’s center stage. Each wave has lasted a decade or more and radically reshaped our lives. Each has begun to recede, from an outperforming stock point of view, when the bulk of possible buyers already own and are using the products (not a surprise that relative stock performance slows down as the company matures).
Low Tide Now
I think that we’re in between waves now. The next wave is doubtless gathering power, though. “Cloud computing” is one possibility. Developments with smartphones, maybe with Google’s help, is another. But the next wave could equally well come out of nowhere. The important thing isn’t necessarily to be the first to discover the next trend, but to be aware enough to catch it in the first year or two of its existence.