Last week, we introduced you to the tirelessly savvy Peter Zeihan’s prophesies of five key technologies that will transform our economy over the next decade.
The technologies feature: artificial intelligence, satellites, bio-genetic tailored drugs, shale industry biproducts, and GMO seed based on AI agricultural advances that will radically improve what he calls the “fruit-to-stalk” ratio of plants. Zeihan, himself, is a leading intellectual explorer of our global predicament, with an often superb “fruit-to-stalk ratio” himself.
Hey, we can’t get everyone! Joining us, however, in person, will be Cathie Wood, who boasts a fruit-to-stalk ratio even higher than Peter Zeihan’s, which is saying something.
Cathie is my favorite technology projector. Not only does she imagine the future and invest in it, she projects it. Her technique is to educate the world to our technological potential and then provide the resources, not just to exploit existing trends, to launch new trends over time.
She is out of fashion at the moment because her ARK Invest fund was down sharply last year with the tech slump after riding Tesla, ZOOM, Coinbase and other innovators to huge gains the year before. But her horizon transcends mere trading to capture the epochal changes of technology.
All major investors omit the most promising breakthrough of all: the revolution in materials science led by graphene. Graphene is a one-atom-thick sheet of carbon atoms 300 times stronger per kilogram than aluminum.
That’s a surprise. Much of the investment world is betting on more dimensions. From 3D transistor structures to 3D printing, from the metaverse of many dimensional virtuality to the universe of 11 dimensions, the rule seems to be the more dimensions, the better.
But the major breakthrough of this era turns out to strip down from three dimensional materials to two dimensions. Two dimensions turn out to offer extraordinary properties lost in 3D complexities. Compared to ordinary 3D materials, 2D graphene is both radically thinner and hundreds-fold stronger, stiffer and more flexible, more impermeable and thousands of times more conductive of both electricity and heat.
We have been telling you of an “aluminum moment” when 2D graphene will soon be manufactured in volume for the cost of the electricity used in Rice University chemist James Tour’s flash joule heating process.
Cathie Wood tells me her staff is exploring possible investments in graphene, but they have not acted so far.
Cathie shuns short-term trading, index-investing, risk-based diversity, “value investing,” benchmark investing, and other forms of shuffling old knowledge. All subsist on passive, backward-looking pattern matching. She points out that the core holdings of index funds—big banks, auto companies, pharma, railroads and energy—are all facing deep crises.
While big funds push their time horizons toward the microseconds, she extends her time horizons to five years. She pursues surprising new patterns.
Her five disruptive innovations are AI integrated with Tesla vehicles (Tesla as a computer platform rather than a mere automobile), blockchain epitomized by bitcoin as a remedy for government-manipulated monies, AI robotics advancing through all industries, and genomics led by CRISPR gene editing through “clustered regularly interspersed, palindromic repeats.” This enables both reading DNA and correcting errors (diseases).
So, take your choice, Zeihan’s agricultural AI, Wood’s Tesla full-service driving AI, Zeihan’s big biotech, or Wood’s CRISPR gene editing.
Most investors guide their outlays by rear-view mirror statistics.That’s a method that cannot differentiate signal from noise, randomness from real information.
Real economic signals are measurable by their quotient of surprise—degree of unexpectedness. Surprisal, as information theorist Claude Shannon showed, is the essence of information. But the surprisal in a random series is statistically indistinguishable from the surprisal in a series of creative inventions.
In order to find the real opportunities, you have to have specific information rather than statistical patterns.
Most investment these days is based on deterministic statistical data from the past. It is waste-producing rather than wealth creating, noise-making rather than signal amplifying.
Computers trading faster than the real events they follow may be able to harvest incremental shifts and accumulate them into significant profits. But these returns to fast trading have nothing to do with real investment.
Real investment does not merely reflect existing events, it shapes the future. That’s why we find Cathie Wood the most intriguing high-entropy investor of our era. Come to COSM and see her. She will not be shy about her views.
P.S. You’ve got to come to COSM 2023, Nov. 1-3 in Bellevue, Washington. COSM 2022 and 2021 were probably the best tech gatherings we’ve ever been to, and the 2023 version is not to be missed.
COSM is the ultimate expression of George’s worldview, the Gilder Team’s insights into what is happening in tech, how it matters to the world and especially to our readers and tech investors. Save the dates of Nov. 1-3:
The focus this year is on AI and all its works. Key speakers include:
Plus, you will meet lots of key folks from the companies we cover.
Speaking of heroes, the brilliant and brave Michael Shellenberger (recently harassed by Congress People of Limited IQ) will speak on Free Speech in the Digital Age.
As always, Carver Mead will give a riveting reflection on our three days together.
Social time is great—meet old friends and fellow subscribers and investors.
George and Nini, of course, and the rest of the Gilder Team, John, Steve, Paul and Richard will be there, too.
DON’T MISS IT.
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P.P.S. Come join our Eagle colleagues on an incredible cruise! Set sail on Dec. 4 for 16 days, embarking on a memorable journey that combines fascinating history, vibrant culture and picturesque scenery. Enjoy seminars on the days the ship is cruising from one destination to another, as well as dinners with members of the Eagle team. Some of the places on the itinerary are Mexico, Belize, Panama, Ecuador and more! Click here now for all the details.