Big ideas for you?

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What’s new?

The 2 Feb issue of the newsletter The Hustle contained a link to the 26 January report “Big Ideas 2021” from ARK Investment Management LLC. You can register with ARK to get a copy here or download from The Hustle here. The Hustle newsletter describes the top idea of the 15 ideas in that report: deep learning.

What does it mean?

Besides deep learning, the other 14 ideas are: the re-invention of the data center, virtual worlds, digital wallets, Bitcoin’s fundamentals, Bitcoin, electric vehicles, automation, autonomous ride-hailing, delivery drones, orbital aerospace, 3D printing, long read sequencing, multi-cancer screening, and cell and gene therapy.

For each Big Idea, the report explains what it is, assesses the potential for investors, and discusses related trends and effects. For example, deep learning, a type of artificial intelligence (AI), “uses data to write software,” and is aiding in the creation of conversational computers, self-driving cars, and consumer apps. It requires “boundless computational power,” “is creating a boom in AI chips,” and is “expanding from vision to language.”

The report goes into depth on the development of new computer chips to challenge Intel’s dominance, the effects of virtual reality and augmented reality on gaming, trends in financial services (digital wallets such as Venmo, and digital currencies such as Bitcoin), two technologies I have written about frequently (electric vehicles and 3D printing), the movement from automation from its success in manufacturing to other parts of the US economy, trends related to moving people and consumer goods (autonomous ride-sharing and delivery drones), and the growth in satellites to provide ubiquitous Internet connectivity.

The last three trends focus on biology and medicine. I learned that I need to read more about those areas. I need to learn more about what improvements will be enabled by long-read sequencing of genomes and about the technology of gene editing.

Their summary of EV trends (battery prices, range, performance, and sales) is succinct and persuasive that a roughly 20-fold growth can happen in the next five years. They connect 3D printing with improved drone technology and with the use of AI to optimize design.

I am surprised by some of their conclusions. The report has two trends related to Bitcoin, but a friend who invested early in Bitcoin tells me investors have moved onto other digital currencies. I find the potential applications of virtual reality in training to be more interesting than the report’s emphasis on gaming. I remain skeptical about autonomous vehicles without changes in the transportation system. Multi-cancer screening of asymptomatic populations faces, I think, the reality of signaling many false negatives (as driven by Bayes’s theorem). However, ARK is focused on where the money is and certainly has more knowledge than I do concerning that focus.

The report has no mention of climate change.

What does it mean for you?

What is ARK? Page 2 of the report states that ARK is an investment firm that “specializes in thematic investing in disruptive innovation and strives to invest at the pace of innovation.” What is a Big Idea for ARK? Page 4 states: “ARK requires a big idea to be investable and long-term.” My goal is not to give investment advice, but rather to help you be aware of and benefit from technological developments that may affect your organization in the future. The report focuses on how an investor can make money from these trends, but the report is still very helpful in pointing out trends for you to watch.

I have an engineer’s instinctual attraction to things that actually make better the lives of people and thus I find the report’s emphasis on making rich people richer (such as applauding the decline of labor’s share in the rewards of productivity) and its emphasis on the benefits of monetization of human activities not to my taste, but I recommend you read this report for some well written and researched information on trends. Perhaps you should view my engineering sensibility as merely resentment that the financial folks get much richer than engineers do from their own work.

Where can you learn more?

You can subscribe to The Hustle daily newsletter here. I find its over-the-top, well, hustle, wearying, but it is an interesting read for trends.

Regarding the 15 trends, I plan to spend some time doing Internet searches to learn more.

My money is invested through a fee-only financial advisor.

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