How to Invest in the Fourth Industrial Revolution
The “World Economic Forum” annual meeting is happening this week everyone. This is a meeting of the minds that takes place every year in Davos Switzerland, which isn’t the worst place to go for a meeting:
This 3-day event brings together some of the world’s most influential people, like the CEOs from 1,000 member companies, politicians from various countries, representatives from the academic world, etc. This year’s 46th annual “meeting of fat cats in the snow” as Bono calls it, (he himself being a participant) will see upwards of 2,600 attendees to discuss the world’s biggest problems.
We can now take this in many directions such as how overpaid/underpaid CEOs are, how women/minorities/transgender people are/aren’t fairly represented in the workplace, how the Syrian refugees are/aren’t being “cared for”/”doing terrorist stuff”, or even U.S. political topics, but what we’re interested in talking about today is this year’s theme; “Managing the Fourth Industrial Revolution“.
As described by the World Economic Forum, the “Fourth Industrial Revolution” is “a perfect storm of business model change in all industries, resulting in major disruptions to labor markets“. Essentially a lot of people are going to lose their jobs to technology and we need to prepare for this. Experts say that 65% of children entering primary school will end up working in job types that don’t yet exist. Over the period 2015–2020, a total loss of 7.1 million jobs globally, like white collar office functions, will go away with just 2 million new job types being created. Some estimate that upwards of 80% of service jobs will be impacted. Here’s what the timeline looks like according to a massive report produced on this topic titled “The Future of Jobs“:
While the report contains more information than you probably have time to read, the driving forces behind these changes are the very same technologies we discuss here on Nanalyze; artificial intelligence and machine learning, robotics, nanotechnology, 3D printing, genetics and biotechnology to name a few. Those individuals who were astute enough to invest in the last industrial revolution, the Digital Revolution, are feeling pretty good about themselves right now, provided they made diversified investments in the most promising names while avoiding the many scams found in “over-the-counter” (OTC) stocks. So how can you invest in “The Fourth Industrial Revolution”? Let’s take a look at four technology themes in this space.
Firstly, read this article so you can better understand all the “high tech” nomenclature being used. Now read this article so you can better understand how “deep learning” or “machine learning” works. The key takeaway here is that all of the most promising companies in this space are early stage startups like Vicarious which is backed by practically every single notable investor there is. While the name IBM (NYSE:IBM) keeps popping up, it’s nowhere near a pure-play. In 2016 we’re going to get all over this space and highlight which startups are the most promising, like this recent article on 4 deep learning companies discovering new drugs. Be sure to sign up to our weekly digest so you don’t miss out.
This theme is what made us start Nanalyze over 10 years ago when G.W. Bush told the citizens of the United States that nanotechnology was the way forward. We don’t want to say that nanotechnology over promised and under delivered, but that’s kind of what happened. Did you make any money off investing in carbon nanotubes? Neither did we. Graphene was the next miracle nanomaterial to emerge and we haven’t made any money on that either… yet. The areas to watch in nanotechnology right now are materials, picks and shovels plays, nano drug delivery, and synthetic biology. That’s right, we classify synthetic biology as nanotechnology. Remember Drexler’s nanobots? Tiny machines that can be programmed to create something out of nothing? When you can create your own artificial organism that sweats fuel products, it’s hard not to see how these are the nanobots that Drexler imagined. Be sure to read our article on how you can invest in 7 synthetic biology stocks.
This theme is exciting but hype seems to get in the way of what’s actually going on. That strangely attractive female robot that greets customers at the Toyota corporate office may seem endearing, but that’s not the way forward for investors. Robotic vacuum cleaners that make sure your house stays clean? Cool, but still not the way forward for investors. One of the real values to be had in this space right now, is in industrial robotics. Companies like Rethink Robotics are alleviating any “they took our jobs” concerns and creating robots that work alongside humans in factories to boost productivity. Investors also should pay attention to robots in the medical field. Intuitive Surgical (NASDAQ:ISRG) is a medical robotics company that has returned +330% for investors over the past 10 years. We’re going to make sure you’re kept up to date on all the promising private companies in robotics, so if you haven’t signed up for our newsletter yet, you know what to do next.
Perhaps the most straightforward theme, 3D printing is at the trough of its hype cycle currently. This means that if you bought 3D printing stocks several years ago, you’re wondering where half your money went. So are we, but not to fear. The underlying growth thesis hasn’t changed at all. We’ve put together a diversified portfolio of 3D printing stocks for you to invest in, and we’ll continue to update it along the way while telling you what 3D printing companies not to invest in.
As retail investors, there aren’t many publicly traded pure-play stocks yet that will allow you to get exposure to the “Fourth Industrial Revolution”. While the most promising companies remain private, there will be exit events like acquisitions and IPOs that will allow retail investors to put some skin in the game.