YOUR PORTFOLIO
/ TECHNOLOGY /
RISE OF THE
MACHINES
Drones, driverless cars and 3D printers are making headlines, but
whether they make good investments is a different matter entirely,
writes Anthony Luzio
Y
OU HAVE TO
WONDER ABOUT
THE FUTURE OF
SCIENCE FICTION
AS A FILM GENRE.
Hollywood scripts can end up
lying on the shelf for years while
producers search for the right
combination of a star name,
visionary director and multimillion dollar budget. And, with
the current pace of technological
innovation, the outlandish
predictions that are a cornerstone
of the genre could well be part of
our everyday lives by the time the
film is released.
While it took almost 25 years
for the driverless cars seen in Total
Recall to become commercially
available, there was a gap of just
five years between the release
of Minority Report, in which
Tom Cruise uses his fingers
to manipulate images on a
touchscreen, and the launch of the
first iPhone. Not a long time in an
industry where Die Hard took so
long to go into production, Frank
Sinatra was originally offered the
part that went to Bruce Willis.
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All very interesting, but how
does this affect you?
Memories of the dotcom bubble
mean many investors continue to
avoid tech companies and with
the trend for Silicon Valley startups to trade on P/E ratios in the
multiple hundreds, this may not
seem like the worst idea.
However, you can’t stand in the
way of progress and as investors
in Kodak – which turned its back
on its 1975 invention of the digital
camera – and Blockbuster – which
rejected a partnership with Netflix
in 2000 – will tell you, sticking
your head in the sand isn’t the best
long-term strategy.
ECONOMIC LIFEBLOOD
The failure of individual companies
when their business model becomes
obsolete is as old as capitalism
itself, but when the lifeblood of
every industrialised nation on the
planet is called into question, this
is a different matter entirely. And,
while environmentalists have been
banging the renewable-energy drum
for decades, it is when those with
a vested interest in maintaining
the status quo begin to position
themselves for the big switchover
that you need to take notice.
In March this year the
Rockefeller Family Fund
announced its intent to sell down
all its holdings from Exxon Mobil,
a direct descendant of John D
Rockefeller’s Standard Oil, and
from other firms related to fossil
fuels, stating: “It makes little
sense – financially or ethically – to
continue holding investments in
these companies.”
Meanwhile, Saudi Arabia
recently unveiled a vision to make
its economy less reliant on oil
and gas by 2030. This includes
$65bn of expenditure on public
programmes and plans to float 5
per cent of its state oil company.
“So if you are a conspiracy
theorist, I’d suggest the Saudis
might think the game is up for
fossil fuels,” said Stephen Bailey,
manager of the Liontrust Macro
Equity Income fund.
Wolfgang Bauer, a chemist by
trade and deputy manager of the
M&G Global Corporate Bond and
M&G European Corporate Bond
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