Thematic Investing & The Theme That Will Drive Returns Over the Next 10 Years
10/03/25
“Thematic investing” refers to investing in broader trends that are likely to drive returns across a group of industries or companies. By this, I don’t mean buying a semiconductor ETF or a basket of U.S. manufacturing stocks. Rather, thematic investing is about betting on companies that will benefit (or be negatively impacted) by an emerging trend you believe will shape the near future, not just making a sector-based bet.
One of the main benefits of thematic investing is that it reduces the specificity required to achieve outsized returns. It’s easier to identify an industry likely to benefit from a larger trend than it is to pick a single winning stock, and doing so creates natural diversification that helps mitigate company-specific risk. Building a portfolio around three to five investment themes is also far less time-consuming than conducting fundamental analysis on 15 to 25 individual companies.
My Introduction to Thematic Investing
I was first introduced to thematic investing when I noticed Citrini Research going viral on Twitter in 2023 for accurately predicting several trend-based theses in AI and large language models (LLMs). Since then, his following has grown to more than 90,000, and one of his stock theses, on Acuren Corp, led to a 25% single-day jump.
After discovering Citrini, the idea of thematic investments has resonated with me and been something that I wanted to implement into my own portfolio. As part of ramping up my posting on this Substack, I wanted to dive into a mega-trend I see driving the market over the next 5-10+ years and the reasons behind that.
The Mega Trend I See Driving Returns Over the Next Decade
The major mega trend I see as already in progress and set to continue over the next decade is the hyper stimulative short form content on platforms such as TikTok, Instagram Reels, and YouTube Shorts.
Short-form platforms like Instagram, TikTok, and YouTube are exceptionally effective at identifying what content viewers find interesting and will continue watching. This is largely due to the sheer volume of data they collect: with short-form content, the signal they receive about audience preferences is exponentially higher than with longer-form media.
In a ten minute time period, you could realistically scroll through 50+ short form videos and each time the algorithm is getting better at determining what will keep you on their platform. As a result, they are also getting signal towards what you are more likely to purchase and can target their ads more effectively. In a similar 10 minute span, you could likely only watch the beginning of a few longer form YouTube videos, and they wouldn’t be able to gain as much insight into your content preferences.
From the business standpoint, these operations and their effects seem beneficial. But for the consumer, it means you are spending more time on content that leaves minimal lasting impact on your life, and you are likely spending more money than you would have by not opening these apps.
In addition to the time and money spent on these platforms, consider the generations of kids who have grown up with smartphones and the internet from birth. I was born in 2003, when smartphones were just becoming mainstream, and even I’ve felt the effects of hyper-stimulation, from gaming and long-form YouTube videos to, more recently, short-form content.
With the heightened presence of short form content, as well as the younger generations (Gen Z and Gen Alpha) being introduced to short form content at an increasingly young age, attention spans are dropping at historic rates.
With our attention spans rapidly decreasing, I’ve noticed an increased amount of stimulant/antidepressant prescriptions to my classmates, friends, and my generation as a whole. This is backed by scientific research and is a seriously concerning development as many of my generation, including myself in many regards, are choosing short-term dopamine over delayed gratification. Below is a chart of the percentage of teenagers in the United States taking antidepressants from 2015 to 2019, by gender. This study was carried out in 2020 and I fear that the real figure stands much higher today, as short form content has only been around since roughly August of 2018.
While I don’t believe that the effects of short form content are individual to young adults and teens, I do think that the effects of this content will be seen the most here. This will be reflected by decreased reading capability, worse grades, and overall less intellectualism. This could result in worse college acceptance rates, or lower rates of college attendance as a whole.
Another possible outcome of this hyper-stimulation is that parents become more aware of these issues and take proactive steps, such as limiting device time, encouraging intellectual engagement, and even exploring alternative schooling models that promote deeper, more sustained intellectual development.
For-profit schools could offer a potential solution to this problem, as their rise may lead to improved academic outcomes through iterative changes to teaching and stricter limits on technology use, especially social media, during school hours.
Leaving my moral opposition to short form content aside, I see no clear disruption to these platforms current business models and their detrimental side effects. By extension, I believe that these companies, GOOGL 0.00%↑ and META 0.00%↑ , provide the most logical ways to invest in this hyper-stimulation mega trend. While investing in two of the FANGAM companies seems like a no brainer, Google and Meta are trading at some of the lowest PE ratios of the group.
In addition to Google and Meta, I could see AMZN 0.00%↑ doing well with more targeted advertising data, as well as gaming companies that keep the attention of these younger generations better than other media platforms.
Specifically within gaming, Tencent would be a logical investment based on this trend, especially given that they own Riot Games, the developer behind two of the biggest video games out right now in League of Legends and Valorant. These games are particularly addictive because they have ranked play elements that encourage players to devote hours and hours of their time to improve, and they monetize them via weekly micro transactions for cosmetics. These competitive game modes use rating systems similar to ELO in chess, and consequently gamers spend increasing amounts of time climbing ranks.
Additional Mega Trends That I See:
Increased Energy Consumption From Data Centers (Natural Gas?)
Expensive Housing (REITS?)
Loneliness (dating apps)
Health Consciousness (Lulu, Nike, Smartwatches, Gyms, etc.)
Lower Alcohol Consumption
Please consider subscribing if you'd like to read my future analysis of the stock and real estate markets, as well as the rise of prediction markets. In the future I plan to do more stock specific research on companies that interest me, as well as articles on what I believe companies are doing well or poorly and my recommendations for them.
In the meantime I have a catalog of stocks that I researched during my summer internship in 2024, which can be found here. I also summarized this research as well as some of my larger portfolio positions in this post.