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Why investment markets are ready for ‘prime time’
The world is changing for the better, with new technologies creating a wealth of opportunities for investors going forward, according to an analyst.
Why investment markets are ready for ‘prime time’
The world is changing for the better, with new technologies creating a wealth of opportunities for investors going forward, according to an analyst.
In the 1900s, telephone, electricity and automobiles all emerged at the same time. Fast forward to today, multiple innovative platforms are also emerging at the same time in a similar fashion.
In a presentation during the UBS Australasia Conference 2019, founder and CEO of Ark Invest Catherine Wood outlined how the world is going to change dramatically and, as a consequence, see greater investment opportunities for the Australian market.
“The five changes are blockchain technology, genomic sequencing (DNA sequencing), robotics, energy storage and artificial intelligence,” Ms Wood stipulated.
“If I were to use the Richter scale to give you a sense, the first period of innovation in the 1900s, that would have equated to 6.5 on the Richter scale. For every point up, it’s 10 times the power, we would equate what is about to happen as an 8.5,” Ms Wood said.
Banking, energy and traditional pharmaceuticals will be significantly impacted by these changes, with Ms Wood believing they need to innovate to survive.
Why are we ready for prime time?
Ms Wood believes markets are now ready for prime time, something they weren’t ready for during the dot com boom.
With the advanced technology available, Ms Wood said businesses are currently presented with the opportunity to create products at a lower cost.
DNA sequencing - Genome sequencing is a shortcut allowing scientist to find genes much quicker and easier, with real-world implications such as stopping cancer in stage one.
The first whole human genome was completely sequenced in 2003 at a cost of $2.7 billion and took 13 years of computing power.
“Today we are below $1,000, and in 2024 we will be below $100, and you will go to your geneticist to have your genome profiled,” Ms Wood said.
Last year, there were 2.4 million genomes, and by 2024 it will be 100 million.
Energy storage - Battery technology has been disappointingly slow, until Elon Musk engineered a battery pact system, Ms Wood said.
Last year, there were about 1.5 million electric vehicles sold around the world. In the next two years, the cost of an electric vehicle will drop below a petrol vehicle, leading to an explosion in sales, according to Ms Wood.
“They are better cars, and they are going to be much cheaper. By 2024, there will be 37 million electric vehicle sales globally,” Ms Wood said.
Robotics - Collaborative robots that are covered in sensors are going to help the labour productivity of human beings.
“In the United States, there are 7 million jobs that are unfilled for one of two reasons – either they don’t pay enough or there’s a skill set mismatch,” Ms Wood said.
AI - In the early days of artificial intelligence, scientists predicted AI would take over the world.
“Why are we ready for prime time now? It is because we have taken the human programmer out of the equation, with the human being setting the objective, but in terms of the actual artificial intelligence, something called deep learning allows machines to teach themselves,” Ms Wood said.
Blockchain - Many people are still talking about blockchain technology without bitcoin, but Ms Wood said bitcoin will become the reserve asset of the cryptocurrency ecosystem.
“We have had some proof because since it peaked at $20,000, bitcoin’s share has gone from the low 30 per cent range to 70 per cent. It is the reserve currency, it is the flight to safety currency within the crypto asset ecosystem,” Ms Wood concluded.
Last year saw 1.1 trillion in transactions on the bitcoin blockchain, which has allowed cross-border trading in expensive markets.
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