Worried about the U.S. economy? Emerging markets? Europe? Kenneth Fisher says not to focus on short term problems, but instead the enormous long term potential he sees in play.
“Forget today’s myopic warnings of emerging markets meltdown, deflation death spirals, perma-stagnation and all the rest,” Fisher writes in The Financial Times. “In 20 years your world will be exponentially more prosperous and your quality of life immeasurably better.”
That will happen, he says, because of rapid advances in technology that will constitute the equivalent of a new industrial revolution. The shale gas boom is one way the process is already happening, Fisher contends, saying that similar growth-producing innovation will follow. “Moore’s Law, which says the number of transistors you can fit on a semiconductor doubles every 18 months, is almost 50 years old and still holds good,” he says. “But people ignore Koomey’s Law, which posits similar gains for energy efficiency in computing — estimated to last 50 years — and Kryder’s Law, doing similarly for hard disk memory storage. And the Shannon-Hartley Theorem for information transmission speeds in communication. No one can fathom how these technologies will compound while colliding on top of each other.”
Investors will benefit greatly from the advances, Fisher says. “Winners will include publicly traded companies in every sector — and their shareholders!” he says. “Take the iPhone. Nothing in it was new. Apple just saw how to collide technologies in ways that everyone would want. Tomorrow’s winners could be anywhere from financial services to cosmetics or toys.”
Validea’s Ken Fisher-inspired portfolio is up 13.7% annualized since its mid-2003 inception vs. 6.1% for the S&P 500. Check out its holdings here.