Advent of Molecular Medicine.
- After decades of promise, breakthroughs in genomics have changed the practice of medicine. Genomic sequencing technology, clinical knowledge and data analytics have converged to generate diagnostics and treatments specific to individual patients and diseases. More data-intensive practices will likely improve medical outcomes and alter which companies in the healthcare ecosystem win or lose. Those companies leading the genomic medical revolution are well positioned for long-term outperformance.
End of Disinflationary Tailwinds.
- After four decades of declining interest rates and ten years of very low inflation, both rates and inflation have returned to long-term norms. While the impact of higher interest rates was initially cushioned in the U.S. by the long-term, fixed-rate debt that many consumers and companies locked-in during the pandemic, sustainably higher levels of inflation and rates mark a notable shift in the global investment landscape and creates investment opportunities.
Next-Generation Automation.
- As the global labor force ages and the need for supply-chain redundancies becomes more acute, companies are increasingly seeking ways to do more with fewer people. Automation technologies, previously concentrated in automobile and electronics production, have matured and reached an inflection point. These technologies now offer attractive returns on investment to companies across many industries.
Opportunities Abound Abroad.
- U.S. equity markets have significantly outperformed global equity markets since 2004. Recent structural reforms in fiscal, energy, industrial and capital-market policies are taking hold in several non-U.S. geographies, creating investment opportunities. Both Europe and China are taking steps to stimulate domestic consumption and to expand their technology capabilities. These policies, coupled with potential future weakness in the U.S. dollar, should lead to better equity performance in certain industries and companies outside the U.S.
Rise of Purpose-Built Tech.
- For nearly 50 years, the performance and cost of computing technologies improved exponentially, as Moore’s Law predicted. As physical and economic challenges limit such rapid growth, improvements will come from specialized, purpose-built solutions, rather than one-size-fits-all approaches. Those firms that generate and leverage bespoke, high-quality proprietary data and technology solutions will displace prior scale-based winners.
