In this quarter’s Knowledge Leaders Strategy update, we discuss our work in four areas.
1. The state of global innovation: After 52 years, Moore’s Law is alive and well with the number of transistors per chip still doubling every two years. Since semiconductors are the general purpose technology of our time, this has extremely positive consequences for global innovation and Knowledge Leaders. We discuss what this means for the Knowledge Economy and our investment strategy.
2. Knowledge Leader spotlight: Intel has invested heavily in R&D over the last two decades, and the company is reaping the benefits. To us, Intel’s stock looks cheap right now.
3. Interest rate update: We believe bonds overshot in the post-election “reflation” trade and are coming back down. If gold breaks out on the upside, watch for rates to break on the downside. We explain why a meaningful decline in inflation expectations would likely be negative for US stocks.
4. Macro analysis: We expect the global crude oil market to come into balance over the course of 2017 and 2018. We look at how this could be a net positive for the relative performance of Europe, the emerging markets and the US energy sector … and a negative for the broad US equity market.
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