Below is an excerpt from one of President and CIO Jordi Visser's earliest whitepapers, Adapt or Die: An Investment World Driven by QE, Tweets, Clouds, Robots, Singularity, and Luddites. You can access a full copy of the document by clicking here.
We have all heard at some point that people do not like change. The brain likes routines. Parents are taught to provide routines for their babies to create a low stress environment. Routines keep you within your comfort zone, where it’s safe and familiar. Routines provide predictability which, in the investing world, helps with the bias for the majority towards momentum or trend following. Extrapolating the present into the future is difficult for us as people to avoid. The easiest guess for the future is to take today’s problems or successes and assume they will continue. In a linear world where technological change happens at a slow enough pace to not be disruptive, it’s fairly easy to adjust when things change. In an exponential world, technological change happens quickly and can be very disruptive; it becomes far less predictable and people have difficulty adjusting. Over the last few years, it feels to me like people, companies, governments and markets have been adjusting, or rather adapting, to a world where technology’s impact is difficult to comprehend. This was one of the themes in the movie Moneyball and as Brad Pitt said to Philip Seymour Hoffman, “Adapt or die.”
Over the course of 2004-2007, it became clear to me that China’s growing influence on the world would affect GDP, trade, foreign exchange and commodities in a way not seen before. And it would likely last for decades to come. The law of compounding very large numbers forced me to visit the country one month each year to get a sense for what this growing force meant to investments, global growth, monetary policy and geo-politics. The macro evidence was clear to me, however, I was learning that much of what was written in the media about China had a bias to it. Predicting the end of China’s growth would likely be as easy as predicting the end of the U.S. consumer. From an investment perspective the focus was on China’s urbanization, its growing thirst for food and energy, its love of luxury items and its influence on emerging markets growth...
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