There’s a cognitive bias known in Behavioral Economics named Loss Aversion Bias. Boiled right down, it means that we are roughly twice as concerned about our losses as we are our gains.
Historically speaking it’s been one of the major things that keep investors from earning what they can. For some reason, the brain is hardwired to pay attention to danger. Perhaps it’s what kept us alive in ancient times.
Today, you see that focus on negativity played out in the media.
Every time you open the news stories of death and disaster make the headlines more often than good news stories. Because that’s what people click on. And as the internet’s news business model has basically come down to ads. We can expect a lot more of it to come.
So, that’s why if you’re concerned about keeping up with what’s going on, (like we are here at Schneider Insurance), it’s important to focus periodically on the reality of how things are actually improving – though this may be difficult to recognize.
Keeping afloat in a world of hurt
Many people are going through a world of hurt right now. And despite some light at the end of the tunnel due to the rollout of Coronavirus vaccines, the struggle is going to continue for a long time.
But don’t lose sight of the fact that the world as a whole is actually getting better – dramatically better, not worse. It’s just not evenly distributed.
The Good News
The good news shows up in global health, with things like declining rates of childbirth mortality. It shows up in income levels with poverty rates dropping by some 50% over the last 20 years, and it shows up in our quality of life.
With all of the focus on negativity coming from the news, what most people don’t realize is that the compounding effects of exponential technologies are set to drive the world to yet even higher levels of prosperity, safety and capability like we could have never imagined as children. That’s the story investors need to keep in the back of their minds when we’re depressed, disheartened or watching markets get crushed. Not what’s in the headlines.
So for the sake of focusing on the positive and some good news for once let’s look at a few of these waves of changes. When stacked on top of each other, they will fundamentally change our world for the better over the next 20 years.
Exponential Growth of Computing Power
Moore’s law and the doubling of technological power roughly every two years has held constant for about 70 years now. And it is set to continue.
This has meant huge impacts on artificial intelligence amongst other things. But while this processing speed has continued to double, efficiency has also increased by a factor of a hundred thousand since 1990.
Quantum computing is expected to grow by a 17-fold increase over the next three years.
We’ve reached the benchmark of 60% of the world’s population using the internet, with end-user connection speed growing by a factor of tenfold over the last decade.
Massive Growth in Renewable Energy
We’ve also seen dramatic growth in battery technology. McKinsey, one of the world’s top consulting firms, expects to see this trend continue. They’re suggesting a 17-fold increase in battery demand by 2024.
Over the last decade, we saw enormous growth in solar. It increased by a factor of 24 fold over just the last five years.
Just as we’ve seen a cell phone become some 25 times faster in the last decade, we’re going to see the same efficiency growth and the use of renewable energy.
Materials science now allows us to manufacture things at the nanoscale. By using atoms to create new materials that have different properties, custom-built for purpose.
While still expensive now these materials will enable dramatic new capabilities in manufacturing.
3D printing and additive manufacturing now allow virtually anybody to be an inventor. Without the hundreds of thousands in capital traditionally needed for tooling startup costs.
The trends are also evident in healthcare.
The average human healthspan is expected to increase by roughly 10 plus years given that a dozen game-changing testing, pharmaceutical and biotech solutions will arrive to consumers this decade – many of them driven by Crispr.
Think stem cell restoration, personalized and senolytic medicines along with NAD boosters amongst them.
We’re also at the dawn of manufacturing life with scientists utilizing nanotechnology to invent internal robotic microscopic crawlers for use in healthcare enabling vast new capabilities in medicine, many without the need for surgery.
As we’ve discussed before, we’re now seeing the launch of satellite-based global communications infrastructure. It will enable humankind access to high broadband internet shortly anywhere on the globe.
The Main Point
I could go on but I’m sure you get the point.
Although the media will always focus on the downside (and there will be plenty of that), as these technologies roll out, new companies will form to take advantage of the tremendous opportunities for both themselves and mankind.
Through the convergence of these exponential technologies, we will continue to see the acceleration of humankind.
Despite the Coronavirus, despite climate change, and despite the loss of traditional jobs as our labour market changes, our future as a whole remains bright.