5 Themes That Will Change The World Over The Next Decade

In honor of the new decade, Fire Capital Management decided to share 5 themes that we believe will impact business, society, and investment portfolios over the next 10 years and beyond. These 5 themes have already begun to establish themselves as disruptive forces that will challenge the status quo across multiple industries.

Despite the emergence of each theme, it remains early days in terms of which industries will be impacted the most and who will emerge as leaders in their respective areas. The following overview should provide some perspective on areas that we are interested in learning more about and to which we may allocate capital.

1. SUSTAINABILITY

The term has been used quite broadly, but in our view “sustainability” covers a wide range of ideas, processes, products, and businesses. The global push for sustainability has never been more evident. Some anecdotal, but real evidence includes the global environmental movement led by Time’s Person of the Year Greta Thunberg, the rise of Tesla to be seen as the most valuable U.S. auto maker ever, and the market’s acceptance of ESG factors as an important consideration when making investment decisions. A myriad of converging factors makes the time right for sustainable investing — and we’re only at the beginning.

2. ARTIFICIAL INTELLIGENCE

Today’s Artificial Intelligence (AI) probably isn’t quite what the movies depicted it to be. There still remains many obstacles from how it’s regulated to how it needs to be programmed. Check out Janell Shane’s Ted Talk titled, “The Danger of AI is Weirder Than You Think” and you will know what we mean. The interesting thing about AI from an investment perspective is that many of the world’s most valuable and recognizable companies are already considered leaders in the space. There will be many different applications, as illustrated by the chart from PWC.

3. GENE EDITING

Perhaps the biggest, and most underappreciated, scientific breakthrough this past decade may have been CRISPR-Cas9. Essentially, scientists have further refined the technology associated with modifying an organism’s DNA. According to experts in the field, this discovery has massive implications and science fiction like possibilities. Literature on the technology talks about eradicating thousands of diseases and customizing humans by eliminating “undesirable” traits. A recent real example was reported in 2018 when a Chinese scientist reportedly used gene editing to make a pair of twin girls immune to the HIV virus.

4. SPACE

According the Morgan Stanley, the revenue opportunity generated by the global space industry could exceed $1 trillion by 2040. This opportunity has renewed interest in space from both the private and public markets. While 2040 seems like a long ways away, new opportunities for direct or indirect investment may present themselves sooner than some expect. Relevant space related opportunities could include space tourism, satellite communications, data/imagery, and national defense.

5. 5G

This technology may end up being the facilitator of some of the most innovative ideas over the next decade. The roll out of 5G just started in 2019 and we can expect more in 2020. The speed and connectivity enhancements of 5G will enable futuristic concepts like Smart Cities, Autonomous Vehicles, and Cloud Robotics/Automation to become a reality. For comparison sake, 5G download speeds are estimated to be 2500x faster than average LTE according to Goldman Sachs.

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Disclaimer

The information in this report was prepared by Fire Capital Management. Any views, ideas or forecasts expressed in this report are solely the opinion of Fire Capital Management, unless specifically stated otherwise. The information, data, and statements of fact as of the date of this report are for general purposes only and are believed to be accurate from reliable sources, but no representation or guarantee is made as to their completeness or accuracy. Market conditions can change very quickly. Fire Capital Management reserves the right to alter opinions and/or forecasts as of the date of this report without notice.

All investments involve risk and possible loss of principal. There is no assurance that any intended results and/or hypothetical projections will be achieved or that any forecasts expressed will be realized. The information in this report does guarantee future performance of any security, product, or market. Fire Capital Management does not accept any liability for any loss arising from the use of information or opinions stated in this report.

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