Market Strategy • Vision Archive

A World of 1’s and 0’s

What words are there to describe 2020 that haven’t already been exhausted? Instead of rehashing what was, I want to focus on what will be. Artificial intelligence, deep learning, cloud computing, and neural networks will underpin colossal growth in the global economy over the next 10-20 years.

Microsoft’s Satya Nadella recently noted that we are witnessing the “dawn of a second wave of digital transformation.” IDC estimates that worldwide spending on digital transformation will exceed $7 trillion by 2024. AI will impact every vertical—from Finance to Healthcare to Aerospace. It is the revolutionary element of the digital era.

The Digital Transformation of Cash

Not only are enterprises going digital, but so is cash. Currency is undergoing an analog-to-digital transformation. China has already completed the infrastructure for its digital currency (DCEP), and even the U.S. Federal Reserve is discussing direct digital accounts for Americans.

The Most Important Thing: Edge

Making outsized returns is not easy. You have to buy right, and then you have to hold on. In a world of millisecond algorithmic trading, having an investment horizon of more than a few weeks is a competitive edge. Long-term ownership is a deterrent to making mistakes.

Big winners do not go straight up. Daily stock movements are mirages that tempt us from our path. As Thomas Phelps wrote, “In the stock market, evidence suggests one who buys right must stand still in order to run fast.”