We have entered a new Digital Age where the rapid expansion and implementation of technological innovation has become a key factor in the behavior of the economy and capital markets. This new era is marked by the transition from “atoms” to “bits,” resulting in a capital-light economy in which technology is being substituted for labor and physical assets. Fueling this transformation is data, an imperative resource and what we have labeled as the “new oil.” We have written extensively on this topic and the implications for business and investors in the years to come.
“What is your business strategy in the digital age?” has become one of our favorite questions to ask management teams.
If a company cannot provide a convincing response, we believe it will likely flounder and ultimately disappear.
– William Priest, Executive Chairman, Co-CIO and Portfolio Manager
|Insight – March 24, 2021||Insight – February 11, 2021|
|Money 3.0: Central Bank Digital Currencies (CBDC)||Moore’s Law & the Race for the Rest of the Chessboard|
|During the past two years, CBDC has progressed from a bold speculative concept to a seeming inevitability and core feature of our financial ecosystem. This paper explores the potential disintermediation of significant swaths of the commercial banking system.||Both sides of the political spectrum are pushing for regulatory action of Big Tech. We explain why tech will continue to be the most dynamic sector of the economy, and why we expect greater breadth in tech market leadership.|
|White Paper – January 22, 2021||White Paper – August 19, 2020|
|Will Biden Take On the Tech Barons?||The Pandemic Accelerant: Digital Age Business Strategies|
|The Cambrian explosion of exciting breakthroughs in AI, autonomous driving, 5G, and cloud computing will drive double-digit growth in semiconductor revenues for the foreseeable future. We have a constructive view on the semiconductor sector and believe it possesses considerable upside.||The last six months have been profoundly transformational, with the COVID shock acting as an accelerant for the digitization of the economy.|
|White Paper – January 31, 2018||White Paper – June 19, 2019|
|When “Bits” Meet “Atoms”||Blitzscale and Hope: Unicorns, IPOs And The Fear of Repeating the Late 1990s|
|The Digital Age and the transition from “atoms” to “bits” implies a capital-light economy in which technology is being substituted for labor and physical assets. Its impact is widespread and stretches beyond the technology sector.||The current hype about two-sided digital platforms, blitzscaling and winner-takes-most markets has fueled a surge in IPO listings and produced stratospheric valuations that are difficult to reconcile with free-cash-flow (FCF) fundamentals.|
|White Paper – August 10, 2017||Insight – December 10, 2018|
|Tech is the New Macro – Part II: Implications For Labor Markets And Productivity||Trump, Tech and Trade|
The rapid expansion and implementation of technological innovation has become a key factor in the behavior of the economy and capital markets. In this paper we explore how platforms and their network effects have resulted in a winner-takes-all market.
|China’s mercantilist behavior, underscored by its “Made in China 2025 initiative,” is in conflict with U.S. demands for greater IP protection, a level playing field and improved market access. Left unresolved, free trade and globalization will be in retreat.|
|White Paper – June 29, 2017||Insight – September 13, 2018|
|Tech is the New Macro – Part I: Impacting All Three Components of Return on Equity||Is e-Commerce a Bubble?|
|The rapid expansion and implementation of technological innovation has become a key factor in the behavior of the economy and capital markets.||While the e-Commerce index as a whole appears frothy, many companies in the sector do possess sound and promising business models. For investors, the key to success is understanding how these business models should be valued.|