“A Tech-Powered Disinflationary World”

via Eric Peters in the latest wknd notes:

Disruption: “The biggest ten S&P 500 companies are fighting to reduce GDP,” he said from Silicon Valley. “They’re undermining everyone else’s revenue.” Apple’s iPhone enabled Uber. An iPad means you don’t have to buy your kids video consoles. Google means you don’t need a library. Amazon destroys physical retailers. “You have all these great companies, these huge companies, but they’re probably net negative for growth using standard measurements. So GDP is not necessarily a great barometer for trying to figure out what’s supposed to happen to stocks.”

Disruption II: “Beat on earnings, missed on revenues,” he continued from the Valley. You hear that a lot about US equities. “That’s what a tech-powered disinflationary world looks like, there’s nothing wrong with it unless you own credit, get used to it.” US companies hold the world’s most valuable intellectual property. “Liberal arts majors think tech will miraculously solve every problem. They don’t have a clue. But tech solves lots. Take fracking. Imagine the US has 10% of earth’s frackable deposits. Just look at how it disrupted global energy almost overnight.”

Josh here, this is an important insight and makes me think of what I said in Abundance the other day. 

Source:

One River Asset Management