Investing in the fourth industrial revolution
Alpha returns are likely to go to those investors who orientate their portfolios towards the embryonic (riskier) stage of the fourth industrial revolution which is bringing together digital, physical and biological systems. The fourth industrial revolution (like every revolution before it) will be a game changer. For those of you who have the foresight and the means to start investing early in the fourth industrial revolution, the future is likely to be green for your portfolio. You can learn all about investing in the fourth industrial revolution on one of the Wealth Training Company Events.
Whether it be mass autonomous transport powered by electricity or the advancements in artificial intelligence which creates a new form of being, a humanoid – a machine that appears and resembles humans with facial expressions and displays signs of (machine) intelligence, or block-chain technology which decentralises data-one thing is clear, humanity is on the cusp of great change.
They say you should never be afraid of change. You may lose something good, but you may gain something better.
So investing in winners of the fourth industrial revolution will translate to higher returns on capital going forward.
Indeed, the Rothschilds, whose name is synonymous with solid returns on investment for over generations have diversified their asset allocation “towards equity investments where value creation is driven by some identifiable catalyst or which are exposed to longer-term positive structural trends.”
(The above quote was taken from RIT Capital Partners June 30, 2017, half-yearly financial report).
Put simply, RIT Capital funds are investing in the fourth industrial revolution.
Here is another extract from RIT Capital Partners June 30, 2017, financial report;
“As the ‘Fourth Industrial Revolution’ develops, it becomes increasingly important for your Company to be able to assess investment opportunities in the innovation-driven changes which are affecting almost every business sector. With this in mind, we have entered into a partnership with Social Capital, one of Silicon Valley’s leading technology investment firms, led by Chamath Palihapitiya. We will invest in a range of their funds to benefit from Social Capital’s data-driven approach and expertise in this area, as well as looking at specific opportunities.”
A casual perusal of Social Capital’s website and it becomes clear that the Rothschilds are at the heart (Silicon Valley) of investing in the fourth industrial revolution.
So the fourth big change is upon us and the transformation will be unlike anything humankind has experienced before. Maybe it will be the new renaissance; a shift from 20th century Keynesian greatest focus on health and education to neoliberalism (free market, individualism where governments take a back seat ) to finally a new system that will meet the needs of everyone (universal income).
On a micro scale, the fourth industrial revolution offers huge challenges and opportunities for investors.
The opportunity of investing in the fourth industrial revolution is likely to come from the battery contents, lithium, which will be needed for the next generation of autonomous electric powered vehicles. The application of lithium as energy storage could take off as electric vehicles go mass market. Moreover, with many governments already banning the manufacturing of combustion vehicles in the near future this could very well happen.
Scouring penny stocks, particularly companies that are likely to play an increasing role in the fourth industrial revolution could payout big.
For example, Australia’s AVZ Minerals Ltd, was a penny stock, a few months ago, since then the lithium mining hopeful has surged about 1,300 percent this year.
But investors also need to keep in mind that investing in lithium stocks or lithium (the commodity) is not exempt from the normal laws of “commodity economics” at some point there will be an oversupply in lithium.
The time delay in suppliers supplying at today’s price (frothy with speculation) could mean oversupply.
Investing in the fourth industrial revolution will also mean opportunities in Silicon Valley stocks. Think about it. If the evolution of the internet back in 1993 is where we are today with Artificial Intelligence the world could become unrecognizable in a decade.
What that means for investors in the fourth revolution of young tech stocks is that their winning stocks could take a moon shot going forward,
A modest investment in say Microsoft, Apple, Google in their early stage would have meant the difference between retiring frugally or comfortably for investors of the internet generation.
Bitcoin, a cryptocurrency which uses bloc-chain technology (an electronic ledger held on multi serves around the globe) is up over 500% this year and is already creating young millionaires.
But for every brave investor who takes the risk and gets in early, there will also be many losers. The fourth industrial revolution could make many humans redundant. Five million jobs will be lost by 2020 to robots.
So less tax revenue for governments. That is something for sovereign investors to mull over.
And here is another chilling thought, what if the humanoids with intelligence, albeit machine intelligence reason that humans are a drain on scarce resources?
Scarcity leads to competition which leads to rivalry and more often than not conflict.
What if the humanoids (with AI) reason that humans are rivals for scarce resources, that humans are useless feeders and that in the interest of humanoids humans should be eliminated.
What if the humanoids turn on their creators? Could today’s science-fiction be tomorrows reality?
But back down to earth, where what matters in the world of investing is the best rate of return. All an investor need to do is make one good investment in the fourth industrial revolution and that is more than likely to cover any bad investments made. So when investing in the fourth industrial revolution perhaps it is prudent to just casts your nets over the boat.
Best of luck.