- In the final installment, we review the relationship between innovation, markets, and global political stability over the last two centuries.
- This history suggests the existence of investors who are both more complex and less autonomous than either rationalists or behavioralists typically model.
- Raw technological progress is a poor predictor of returns, while bursts of disruptive innovations actually tend to coincide with bear markets in stocks, commodity supercycles, and global political instability.
- Disruptive innovations are almost always found either in communications or transportation; electric vehicles do not appear to match historical patterns of disruptive innovations.
- Current patterns suggest a decade marked by growth shocks, global political instability, and low returns.
For further details see:
Conjunction And Disruption: Technology, War, And Asset Prices - Part 4