Diversified industry exposure
Even where a project or industry only directly employs one tenth or one twentieth of the workforce of a region, the impacts can be felt across ancillary industries and can be quite catastrophic to a regional economy.
It's a comparative luxury and should not be underestimated.
Within reason, an investor can choose to buy in any location, in any country, at any time they choose, so on that basis "it might be OK" is unlikely to be a value proposition that should lead anyone to making a positive investment decision.
Having learned from some inevitable loss-making trades in the early days as repeated capital raisings diluted out my holdings, my investment philosophy today is to only buy investments which I can hold on to if I live to be 100 years old, if I so choose.
I am no longer in a mad hurry and no longer have any need to take undue risks, so, simply, why bother?
While the company might claim to have a zillion users today, I know from my own experience of living in south-east Asia and visiting India that millions of those users signed up a few years ago and will never venture to log in to the social media site ever again.
Similarly, while I am a big fan of Twitter and use the website as an effective "news feed" today, I wouldn't buy shares in the company for similar reasons.
Livewire brings with it the advantage of being a specialist site and thus providing more specific and in-depth analysis, with the added bonus that your feed will not be clogged up with news of who is winning X-Factor or has been eliminated from the dance-off on Strictly Come Dancing (or whatever).
Investments you need never sell?
Essentially, I'd be buying a share in all Australian business and would ultimately benefit from long-term capital growth and tax-effective income (dividends with franking credits attached), although there would naturally be some volatility along the way.
From time to time some of the businesses I own a share in will be taken over, or will merge, or will fail. But it won't matter too much, as over time they will be replaced in the index and the fund re-balanced.
Property investments for the long run
When industries are growing rapidly, it seems as though the good times will last forever, but they rarely do...
London, for example, is expected to add another 1 million heads over the next decade, and dwelling construction will simply never keep pace.
There will no doubt be a price correction somewhere along the line, but the demand for well located property over the long term is assured (the Greater London Authority puts the full metropolitan population of London at well over 21 million today, more than double the figure for "London" recorded in Census data).
The problem for cities with a heavy focus on one or two industries, including Detroit (and indeed, Sheffield, which saw its steel and coal employment heavily impacted), is that, just like a business or a wider industry, they can experience a life cycle - growth, maturity, and then decline.
In Detroit the rate of population decline has slowed to just 7500 per annum, but since, as I always say, the difference between a population which is growing moderately and one which is declining moderately is like the difference between night and day, this is still an ugly dynamic.
The Mayor of Detroit has vowed to arrest the population decline, while others have proposed pulling down thousands of houses in order to address housing market woes.
In short, it's a mess.
The Mel-Syd boom
Clearly only a buffoon would try to draw a straight correlation between population growth and dwelling prices, but as the Detroit example illustrates, a property market with a falling population will fare worse than one with a growing population.
And, in any case, since properties are mostly bought by people and people tend to need jobs, I would tend to look towards cities which are expected to see long term growth in both, particularly in business and financial services as well as other service industries.
I'd be much more wary of cities which lean heavily on manufacturing or the automobile construction, for example.
Shifting from the sublime to the ridiculous, it was projected this week that the average Sydney house could cost $48 million by 2064.
I do genuinely think we could see a few alarming price corrections in some regions, though, particularly as mining construction plummets over the next few years ahead, and downward pressure on commodity prices forces marginal producers to the wall. Australian coal miners look especially vulnerable.