Hello Everyone,
Do not give your Bank details to your children.
Five great technical revolutions have defined the progress of mankind - The Stone Age – The Bronze Age – The Iron Age – The Industrial Revolution – The Information Revolution – and now Robotics and Artificial Intelligence will become the sixth revolution to take mankind forward, or perhaps not. Maybe instead, it will create its extinction!
After I left the Merchant Navy in 1963, I was fortunate enough to get a place at Sussex University (through the early school leavers scheme) to read Theoretical Physics. The new kid on this particular block was “Quantum Mechanics” with all its new sub-atomic particles waiting to be discovered and understood. Sixty years further on and we have the amazing advent of Quantum Computing which is exponentially faster and more accurate than a conventional computer. It does however require a cooling system that is close to absolute zero (minus 273 degrees centigrade), and today this is its Achilles heel. It is not yet a practical proposition. Google, IBM and China have already developed very basic machines, but they are still a mile away from being commercial.
However, these machines have shown the potential for the future. They will be capable of designing new materials, medicines, accurately forecasting future economies, the weather, plus robots capable of teaching, or performing medical operations. In fact, almost everything that a human can do, except better and faster. They will use all the A.I. information from the cloud (not a veterinary procedure or cumulonimbus, but gigantic banks of memory owned and operated by the processing platforms). This means it will be possible to utilise everything that we know today and then improve and develop it further. All of the above comes under the heading of Artificial Intelligence.
A simple definition of A.I. is that it comes from using computers to do the things that traditionally require human intelligence, and it can process enormous amounts of data in ways that humans cannot.
I wonder if the world has politicians and decision makers capable of harnessing the good and avoiding the bad that will stem from this. As an example, we all know that improvements in GDP can be achieved by using fewer people to produce the same amount. If A.I. is to become the decision maker, this may be the time to start looking over your shoulder!
Needless to say, it is going to introduce many stumbling blocks for the “flat earth brigade”.
When this new revolution arrives, I believe that technology funds should be the place to watch carefully as they will take advantage of this new era, much in the same way as they did with the arrival of the “FAANG” businesses all those years ago. These companies became over-hyped and over-priced, and then experienced a major reduction in their value. As a result the investing funds also caught a cold. Looking at the Saltydog numbers this correction would seem to be over. Six months ago technology funds started to rise in value, but then levelled off for a few months before starting to go up again in May. At the moment this would seem to be the result of these original “FAANG” companies finding market favour again. A.I. is in the wings and has yet to make a noticeable contribution.
It should be worth monitoring the following funds in the coming year.
L&G Global Technology Index, Allianz Global Artificial Intelligence, AXA Framlington Global Technology, Polar Capital Artificial Intelligence, Liontrust Global Technology, Sanlam Global Artificial Intelligence, T.Rowe Price Global Technology, and Polar Capital Global Technology.
Although I am a staunch environmentalist, I question whether there’s really the political willpower needed to force through the necessary changes and develop the infrastructure required to hit our 2030 targets. Unfortunately, the often extreme views from the media, on both sides of the argument, may make headline grabbing stories but do little to help drive an informed debate.
For what it’s worth, I would have thought that carbon fuels will need to be staged out, not just dropped. Nuclear, solar and wind turbines will need time to develop the capacity to generate the required electricity load with any sort of security. Moving cars from petrol and diesel to electric will require a phenomenal amount of battery production. The mining and processing of the minerals required to make these batteries will be a challenge (Lithium, Copper, Cobalt, Nickel, Graphite and Rare Earths are all on the menu). Manufacturing capacity will also need to be increased dramatically. All in all, that is a big ask and will need a lot of investment.
The most important natural resources this century may well be different from the ones that drove progress in the last. This should provide an investment opportunity as at some time there is likely to be a shortage in supply, and this will result in rising prices. Strangely enough, reasonable amounts of all of these minerals can be found in Australia. I wonder whether these will simply be sold to China as iron and coal are today, or perhaps we will see battery factories springing up down-under!
The following funds may have to make some changes to the historical carbon companies they were invested into, but they must be worth watching as we move towards a greener planet.
Blackrock Natural Resources. JPMorgan Natural Resources, Ninety One Global Natural Resources, and T.Rowe Price Global Natural Resources.
Do not give your Bank details to your children.
Five great technical revolutions have defined the progress of mankind - The Stone Age – The Bronze Age – The Iron Age – The Industrial Revolution – The Information Revolution – and now Robotics and Artificial Intelligence will become the sixth revolution to take mankind forward, or perhaps not. Maybe instead, it will create its extinction!
After I left the Merchant Navy in 1963, I was fortunate enough to get a place at Sussex University (through the early school leavers scheme) to read Theoretical Physics. The new kid on this particular block was “Quantum Mechanics” with all its new sub-atomic particles waiting to be discovered and understood. Sixty years further on and we have the amazing advent of Quantum Computing which is exponentially faster and more accurate than a conventional computer. It does however require a cooling system that is close to absolute zero (minus 273 degrees centigrade), and today this is its Achilles heel. It is not yet a practical proposition. Google, IBM and China have already developed very basic machines, but they are still a mile away from being commercial.
However, these machines have shown the potential for the future. They will be capable of designing new materials, medicines, accurately forecasting future economies, the weather, plus robots capable of teaching, or performing medical operations. In fact, almost everything that a human can do, except better and faster. They will use all the A.I. information from the cloud (not a veterinary procedure or cumulonimbus, but gigantic banks of memory owned and operated by the processing platforms). This means it will be possible to utilise everything that we know today and then improve and develop it further. All of the above comes under the heading of Artificial Intelligence.
A simple definition of A.I. is that it comes from using computers to do the things that traditionally require human intelligence, and it can process enormous amounts of data in ways that humans cannot.
I wonder if the world has politicians and decision makers capable of harnessing the good and avoiding the bad that will stem from this. As an example, we all know that improvements in GDP can be achieved by using fewer people to produce the same amount. If A.I. is to become the decision maker, this may be the time to start looking over your shoulder!
Needless to say, it is going to introduce many stumbling blocks for the “flat earth brigade”.
When this new revolution arrives, I believe that technology funds should be the place to watch carefully as they will take advantage of this new era, much in the same way as they did with the arrival of the “FAANG” businesses all those years ago. These companies became over-hyped and over-priced, and then experienced a major reduction in their value. As a result the investing funds also caught a cold. Looking at the Saltydog numbers this correction would seem to be over. Six months ago technology funds started to rise in value, but then levelled off for a few months before starting to go up again in May. At the moment this would seem to be the result of these original “FAANG” companies finding market favour again. A.I. is in the wings and has yet to make a noticeable contribution.
It should be worth monitoring the following funds in the coming year.
L&G Global Technology Index, Allianz Global Artificial Intelligence, AXA Framlington Global Technology, Polar Capital Artificial Intelligence, Liontrust Global Technology, Sanlam Global Artificial Intelligence, T.Rowe Price Global Technology, and Polar Capital Global Technology.
Although I am a staunch environmentalist, I question whether there’s really the political willpower needed to force through the necessary changes and develop the infrastructure required to hit our 2030 targets. Unfortunately, the often extreme views from the media, on both sides of the argument, may make headline grabbing stories but do little to help drive an informed debate.
For what it’s worth, I would have thought that carbon fuels will need to be staged out, not just dropped. Nuclear, solar and wind turbines will need time to develop the capacity to generate the required electricity load with any sort of security. Moving cars from petrol and diesel to electric will require a phenomenal amount of battery production. The mining and processing of the minerals required to make these batteries will be a challenge (Lithium, Copper, Cobalt, Nickel, Graphite and Rare Earths are all on the menu). Manufacturing capacity will also need to be increased dramatically. All in all, that is a big ask and will need a lot of investment.
The most important natural resources this century may well be different from the ones that drove progress in the last. This should provide an investment opportunity as at some time there is likely to be a shortage in supply, and this will result in rising prices. Strangely enough, reasonable amounts of all of these minerals can be found in Australia. I wonder whether these will simply be sold to China as iron and coal are today, or perhaps we will see battery factories springing up down-under!
The following funds may have to make some changes to the historical carbon companies they were invested into, but they must be worth watching as we move towards a greener planet.
Blackrock Natural Resources. JPMorgan Natural Resources, Ninety One Global Natural Resources, and T.Rowe Price Global Natural Resources.
Best wishes and good luck with your investments.
Douglas
Founder & Chairman
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