Market Commentary • Archive Insight

Technology and the Illusion of Stability

The first six months of 2022 witnessed the worst start to a year for the S&P 500 since 1970. It was the third worst start to a year ever! We are besieged by a litany of woes, but within this cataclysmic tableau, there is one fact we have come to understand: the world is becoming more digital, and faster than we realize.

Technology and Digital Transformation

I think it’s important to step away from the incessant streaming of data and consider what it means to own equity in an enterprise. As noted investor Ron Barron recently wrote, “This is a HUGE once-in-a-generation BUYING opportunity.” I couldn’t agree more.

We’ve Seen This Before: Lessons from 1994

In 1994, the Fed raised interest rates five times. It was an aggressive, jarring cycle that deflated risk assets. But simultaneously, the Internet was rising. Once the Fed completed its cycle, markets focused on potential. From 1995-1999, the Nasdaq 100 returned a roughly 55% annualized rate of return. We believe the AI economy is sure to supplant the mobile economy (Internet 2.0) in much the same way.

Imagination and Long-Term Investing

Most view markets as a quantitative endeavor overlaid with human emotion. But imagination is an overlooked factor. The future is always in motion; real opportunity lies in imagining what is to come. That is where fortunes are made—in the transition.

AI, the Metaverse, and Emerging Technologies

PwC estimates that the AI economy could add $15 trillion to GDP by 2030. By lowering costs and increasing productivity, AI will touch every aspect of industry. That’s why I believe Nvidia and Tesla, leaders in the development and usage of AI, can become the largest companies in the world by market cap over the next five to ten years.

Positioning and Portfolio Philosophy

Strategically, our portfolios are well-positioned as the world moves further into the digital realm. Take Roblox: for July, the company reported 58.5 million Daily Active Users—an all-time high. Anything that is built will be visualized; anything that moves will be autonomous.