Saturday, June 14, 2014

The Silver Dollar – longevity revolution primer

The Silver Dollar – longevity revolution primer

A publication by Bank of America Merrill Lynch .

I am afraid that this publication is not on general release, well not for at least 30 days. It is a massive piece of research that looks at the corporate/equity opportunities that arise as a result of consumer ageing. Wow it is detailed. That said it a mountain of research that is missing a string of 'so what' questions and responses.

The trouble with piling research quote onto research quote is that you end up missing the big messages and the tools to make sense and prioritise the results.

Let me give you the headline conclusions (you will probably not be surprised).

Longevity risk: hugely underestimated. You can say that again. There is a long list of references to research showing the 'longevity risk'. For instance, global annuity and pension-related exposure
estimated to be as high as US$15-25tn. Many countries could be facing additional costs of up to 50% of 2010 GDP by 2050.

The one thing for certain is that governments might read the numbers but are clueless what to do about the implications.

So where will the smart money go? The number crunchers at the bank highlight three areas

Pharma & Healthcare (incl. tackling age-related diseases and conditions such as cancer,
cardiovascular disease, Alzheimer’s, diabetes, osteoporosis, as well as medical
devices, hearing aids, dental and vision care, and incontinence).
In my language this is age-silo products associated with physiological ageing and the illnesses that can occur.

Financials (incl. insurance, asset & wealth management)
In my language this is age-silo associated with financial wellbeing

Consumer (incl. senior living, care, managed care, healthcare REITs, aging in place, death care, pharmacies & drug stores, anti-ageing, travel & leisure, retail, VMS, and technology).
In my language this is a mix of age-silo and age-neutral - mainly age-silo.

What the report doesn't do is give any measure of the relative attractiveness of these different opportunities.

More concerning is that it is heavily focused on the age-silo opportunities and misses a wide range of age-neutral markets. For instance, nothing about the auto industry.

When it is publicly available it is well worth downloading but it will not provide easy to find answers. It leaves the reader to further analyse the data. Think of it more as an archive of research findings. Dick Stroud

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