Economics Future Investing Politics

Seven Industries That Will Shape the Future

This morning before the closing bell of the stock market, I released the first baseline number for the Vagorithm Index. Today on October 24, 2018 it was 381.33(+1.64) with the number in parenthesis being my societal volatility index number. On scale 381.33 is our baseline for societal change and and radical disruption. A lower number means that innovation and change are happening at a slower pace, a higher number means that change is happening at a faster pace. The volatility number is the daily deviation from a steady technological growth rate. I do not use the Dow Jones Industrial Index or any other index in determining this value. Instead, I look at the rate of change and appreciation of companies that are working within the seven sectors that I believe are shaping the future around us. We do not see how rapidly the world is changing – but from day to day – the rate of change is faster than the annual rate of change less than a hundred years ago. The sectors below are the sectors which are shaping the future.

1. Bioengineering and Genetic Engineering – At the moment, this sector is moving relatively slow in comparison with others because of the important regulation that constrains what would otherwise be volcanic growth. Our ability to change life itself is moving faster than the regulation can keep up. Not only does this affect things like disease and aging but also the ability to grow food, to repair(or destroy) the environment, and much more. Not only can we change the world, eventually when regulations are satisfied or bypassed, we will be changing ourselves and will no longer be Homo Sapiens of any kind.

2. Distributed Ledgers and Blockchain – IBM is doing amazing work with blockchain and food production – as well as many other sectors. While the jury may seem to be out on Bitcoin and other cryptocurrencies – players behind the scenes are building the future of finance, ownership, and wealth. Do not underestimate the power of distributed ledgers to topple governments and corporations.

3. Renewable Energy – our world was built on fossil fuels. It was fossil fuels that gave the greatest wealth and power to men and nations. Now, like it or not, they are being phased out. Renewable energy on a massive scale is coming and it will being new power structures, new ways of living, and new problems.

4. Artificial Intelligence (and Augmented Intelligence). We already walk around with assistants in our pockets that know everything. The interfaces are getting better. Our brains no longer function like the brains of our grandparents but we still use the same structures – not for long. And then there is the singularity – A.I. will surpass our ability to do everything – and will make everything happen much much faster than it already is.

5. Industrial and Labor Automation. In all liklihood, you are going to lose your job. We are all going to lose our jobs. Things will become cheaper and information will become more expensive. Our entire concept of economics will have to undergo a radical transformation.

6. New Materials. Nano-carbon fibres, lab grown meat, more conductive materials, better building materials. A.I. and automation along with renewable energy sources and bioengineering will change the materials we use in almost every instance. Legacy materials will be like hand made woks, a luxury or oddity – not the norm.

7. Virtual Reality, Artificial Reality, Augmented Reality, Combined Reality. In the not too distant future, you won’t have to put on a headset to enter a virtual world and there is a pretty good chance that the virtual/artificial/augmented world will spill over into the ‘real’ world. Will your self driving car be able to crash into the giant billboard – no, because it won’t physically be there – but it will be there – as real as your cousin that you have only seen on Facebook for the past ten years.

These are the main factors that I’ve incorporated into the Vagorithm. There are a couple of other factors that seem important to me. Is this a financial tool? Maybe. Over time you may be able to use it to chart good entry and exit points for the stock/forex/crypto markets – but my main purpose in creating it and sharing it, is to be able to quantify the level of future that exists in the now over time. For what it’s worth – since I began keeping track of these factors (shortly after the election of 2016) – the level of innovation has decreased by 42%. So, by my reckoning – right now – we are in a period of doldrums when heavy resistance to technological and societal change is feeling it’s power. Ignorance is at its most powerful level since the McCarthy Era when people wore blinders and feared what they didn’t understand. The good news is – when the forces of ignorance are defeated – the level of change is going to be  almost blinding in its speed.

Economics Investing

Industrial Automation, Gene Editing, Electric Cars, Cryptocurrency and Marijuana Stocks

I’m excited about a couple of sectors right now…I think that a couple of them are going to change our world before we even notice that our world has changed. I’m not sure which of these will hit – if any – but I’m putting the little bit of speculative investment money I have on these bets.

1) Industrial Automation. These two words sound simple but they represent some of the most complex changes in the history of human civilization. The industrial revolution changed the face of the globe. This was a massive shift in human civilization as humans went from hand produced items in the late 1700s to items produced by chemical, mechanical, machine, and factory production about sixty years later in the 1830s and 1840s. Everything changed and it changed because the way we make things changed. And then the second industrial revolution took place from the 1870s to the 1910s bringing railroads, electrification, telegraphs, sewage systems, and road systems. The Third Industrial Revolution was the digital wave. Now, I believe we are on the cusp of a Fourth Industrial Revolution – which can be summed up with the two words I started with – Industrial Automation. Artificial Intelligence combined with advanced robotics and machine learning are eliminating human beings from the production process. Not only the production of goods, but also the production of food, the driving of trucks and cars, legal work, medicine, and more. All the industry that has been created in the past 250 years is on the edge of running itself. In ten years, we won’t recognize most of the jobs that the labor force will choose from because most of the old jobs will be gone. Three companies that I have my eyes on are Brookstone Automation $BRKS Hollysys Automation $HOLI and ABB Ltd $ABB.

2) Gene Editing. There are already parents paying to have genetic disorders corrected in unborn children or even picking the sex of their future child – that’s old news. The near future of gene editing is much more sci-fi and it’s coming very quickly. Gene editing and splicing allows for the repair or replacement of faulty genes – and on a purely crazy note – might even allow for defeating the debilitating effects of aging. I’m not saying people will be able to live forever – but they may soon be able to live their lifespan without their bodies falling apart on them. Not to mention genetic disorders will be able to be fixed in living patients. They might even be able to turn a switch that would turn off the hair that grows on my back and turn on the switch for hair on the top of my head. There are a lot of companies working in these areas but I’m watching CRISPR Therapeutics AG $CRSP, Editas Medicine $EDIT, Intellia Therapeutics $NTLA and Sangamo Therapeutics $SGMO

3) Electric Cars. The world is going to go electric. Elon Musk saw it and unfortunately, he may have fucked himself and Tesla Motors for a while – but I still believe his company will pull through – still, I’m not putting my money there. Instead, I’m looking at Volkswagon$VWAGY, GM $GM, and Chinese upstart NIO $NIO. While the electric cars themselves are going to be taking the world by storm – the components and materials they require are also worth looking at – lithium and cobalt for batteries, new poly and nanofiber materials for bodies and tires. These are not going to be your grandfather’s Oldsmobile…and going back to industrial automation – they aren’t going to be produced on human assembly lines. Also, they will have self driving technology – Tesla already has it, VW isn’t far behind and GM is spending huge amounts to get there. Google and UBER are already running their cars – and it won’t be long before Amazon jumps in the game. Amazon is definitely going to make a car – they’ve just announced an auto enabled Alexa – the cars are next.

4) Cryptocurrency is coming back. If you haven’t already BUY BITCOIN – you won’t regret it. You may have to wait a couple of years – but it will become the defacto reserve currency if not the official reserve. Tokenization of major industries may or may not happen but block chain finance is happening and there is no going back. Overstock $OSTK and Square $SQ are the two main crypto plays I see in the stock market. IBM $IBM is the number one blockchain play that I see – not to mention a company that is rapidly developing artificial intelligence solutions, cloud computing and storage, and quantum computing.

5) Marijuana stocks (speaking of Elon Musk…)These are pure speculation at this point. There are some interesting prospects but the wild bubbles are too hard to pin down. Personally, I like Cronos Group ($CRON) and Neptune Wellness ($NEPT) but this is anyone’s guess…I’ve stayed away from Tilray and bought a little bit of Canopy Growth but these are like putting money on zero and double zero on a roulette wheel….nice payout if they hit. No payout for Elon’s hit though….

So there you have it…that’s the future I see. If a friend asked me which three companies to invest in out of the whole market my advice would be Amazon, IBM, and AliBaba – Everything else is a gamble but I feel like those three are the literal future of everything – but for you, dear reader, I suggest that you recognize that past results do not guarantee future returns and that this is not financial advice but only an opportunity for me to suggest where you might find some value if you do your own research.

Good luck. Always bet on black.