Tech Regulation Is The Biggest Corporate Risk Of 2021

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Tech Regulation Is The Biggest Corporate Risk Of 2021
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Top risk analyst after tech market rally: “tech regulation is the biggest corporate risk of 2021.”

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Q4 2020 hedge fund letters, conferences and more

Following President Joe Biden's inauguration, markets rallied with the tech world especially hitting new heights. Google parent Alphabet had jumped 5.3% and along with Facebook, Apple, Amazon.com and Netflix, the so-called FAANGs group added $262 billion, taking their market cap to $6.15 trillion. Crypto markets are also up as some suggest that the Biden administration may be friendly to the crypto world.

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Dr. Mark Rosenberg - Co-Founder and CEO of GeoQuant, the world’s first high-frequency political risk data firm - asserts that there will be no greater loser than the technology sector in the year ahead as widespread tech regulation, legislation, and a crackdown on crypto is on the horizon both by Biden and by governments around the world. This is based on his firm's AI-driven predictions in its recently released 2021 Year Ahead Report. His talking points:

The Impact Of Widespread Regulations On The Tech Sector

  • There will likely be no greater loser than the technology sector as governments around the world are seeking to rein in what they see as the wild west of regulation. Tech will also be the new front lines of warfare with China, leading to more private sector crackdowns and legislation on both sides. While tech was the big winner of the past decade, they will start off the next one firmly on the defensive.
  • Tech regulation is the biggest corporate risk of 2021. Simply put, while the tech sector has been the global economy’s big “winner” from the Covid-19 pandemic, it will be the biggest target of late and post-Covid politics, both in developed and emerging markets. The technology sector should expect a persistent push towards regulation, government intervention, and legislation. Not only is antitrust pressure likely to continue, but regulatory pressures around platform liability and tax rates are set to increase
  • Government regulators will come for cryptocurrency. Following the trend of the tech world, the wild west of currency exchange will no longer have the free range it has enjoyed since its creation. Government regulators and lawmakers will advocate for and institute policies that seek to curb the “borderless” nature and anonymity of Bitcoin and other cryptos.

Dr. Mark Rosenberg is Co-Founder and CEO of GeoQuant, an AI-driven political risk data firm that measures, analyzes and forecasts country risks at high-frequency. Before founding GeoQuant, Mark served as head of product development at Eurasia Group. He is a Professor at Columbia University's School of International and Public Affairs. He has previously appeared on Yahoo! Finance, Bloomberg BNN, FNC Shepard Smith Reporting, CNNi Quest Means Business.

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Jacob Wolinsky is the founder of ValueWalk.com, a popular value investing and hedge fund focused investment website. Jacob worked as an equity analyst first at a micro-cap focused private equity firm, followed by a stint at a smid cap focused research shop. Jacob lives with his wife and four kids in Passaic NJ. - Email: jacob(at)valuewalk.com - Twitter username: JacobWolinsky - Full Disclosure: I do not purchase any equities anymore to avoid even the appearance of a conflict of interest and because at times I may receive grey areas of insider information. I have a few existing holdings from years ago, but I have sold off most of the equities and now only purchase mutual funds and some ETFs. I also own a few grams of Gold and Silver

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