Now is the time to bet big on the automation economy
In the midst of the stock market chaos, I focus on one thing: find generational investment opportunities. Why? Because history shows that the best time to invest in emerging tech megatrends is during a stock market crash, like the one that happened in 2022.
For example, the best time to invest in computer stocks was after the Flash Crash of 1987. This left promising computer stocks like Microsoft (MSFT) trading at less than 20 cents per share (adjusted for the split).
The best time to invest in internet stocks was after the dot.com bubble burst in 2000. This left promising internet stocks like Amazon (AMZN) trading at around 30 cents per share (adjusted for the split).
The best time to invest in smartphone stocks was after the 2008 financial crisis, which left smartphone stocks as Apple (AAPL) are trading at less than $3 per share (adjusted for the split).
And the best time to invest in electric vehicle stocks was after the COVID 2020 crash. That left electric vehicle stocks like You’re here (TSLA) trading at around $25 per share (spread adjusted).
This pattern is clear. Every time the stock market crashes, a group of emerging tech stocks trade at massive discounts. Investors who buy at these prices end up making a fortune over the next few years.
So which group of emerging tech stocks are the best buys during the stock market rout of 2022? I would like to make the case for AI actions.
The need is urgent
I sincerely believe that AI and automation technologies will represent one of the biggest technological paradigm shifts of our lifetime. And according to my research, this change will occur mainly in the 2020s.
In other words, over the next decade, we will move from a world run by humans to a world run by robots. During this time, our society and the global economy will be forever transformed.
Like many before it, this tech megatrend will be driven by a convergence of global needs for automation technologies and the swell of engineers capable of building them.
Let’s talk about the “need” part first.
In short, the world must regulate inflation. And Pervasive adoption of automation technologies is the only way to permanently suppress inflation.
The problem of inflation has two parts. The demand for goods and services is too high and the supply of those goods and services is too low.
The Fed can solve the first part by raising interest rates, stifling consumer spending, and suppressing economic demand.
But rate hikes don’t solve the supply side of the inflation problem. The only way to solve this problem is for companies to figure out how to make more products and services. But to do that in a human-centric world, you need more work. This forces companies to hire more workers, which means more wages, more consumer income, more expenses, and more economic demand.
In other words, the current “solution” to correcting the supply side of the inflation equation will actually exacerbate the demand side of the problem. And therefore, it will not permanently solve the inflation situation.
We need a different solution. We don’t need a human-centric inflationary solution – we need a disinflationary solution focused on automation.
The disinflationary solution
Let’s play the same scenario as above, but in a world focused on automation.
A company must produce more products. It deploys a series of automation technologies – both software and hardware – to make it.
These technologies have significant initial setup costs, but very low ongoing costs thereafter. Net impact on annual operating expenses? Tiny.
Yet these technologies don’t sleep, clock in, or take vacations. They are always working to make more products. Net impact on production? Huge boost.
The overall result – the firm can produce many more products at a slightly higher marginal cost. Supply increases without producing more economic demand.
Automation is the panacea to our current inflation problem.
Businesses are starting to realize this. That’s why they start turning to automation technologies in 2022. And so the multi-trillion dollar automation economy emerges.
Automation technologies have arrived
In terms of capabilities, automation technologies have advanced rapidly over the past few years. They are now able to create significant value in the real world – and at the perfect time, too!
For instance, walmart (WMT) is automating all of its warehouses with an end-to-end robotic system. It unpacks, sorts, stores and repacks incoming and outgoing packages with a combination of robotic arms and mini autonomous vehicles.
It is after Amazon has already automated all its warehouses with its own robotic system. And in fact, he recently acquired both i robot (robot vacuum) and Cloostermans (warehouse robotics company), just months after unveiling its very first home robot.
Clearly, Amazon is making a big push for home robotics. Soon we will see the deployment of robots to automate household tasks like lawn mowing, pool cleaning, etc.
In the restaurant world, fast food chains like Chipotle (GCM), wing areaand white castle use robots to make food. Other strings like Chilli’s use them to wait tables. The robot takeover of the restaurant world is here!
It has also arrived in retail. Robots and autonomous vehicles are being used to stock grocery store shelves, clean shopping aisles and deliver orders.
And the automation revolution has also affected the world of media and entertainment. Have you seen those ads that say “this ad was probably written by a robot”? Or those drawings that were created by SLAB, the AI that generates images from queries? Have you heard of Jasperthe AI typewriter?
More recently, a new AI chatbot – ChatGPT – took the world by storm. It’s a great version of Siri that can write full research papers, articles, essays and more in minutes.
The automation deployed in the world today is incredibly impressive.
But that’s just the tip of the iceberg. Experts predict that by 2026, 90% of all online content will be produced by AI.
Alas, I remain my case. The world simply doesn’t need automation technologies today – it also has technologies it can easily deploy today. It’s a powerful combination.
The last word on the automation boom
Despite the challenges the market will face in 2023, including the potential for recession, Louis Navellier, Eric Fry and I see exciting opportunities on the horizon. Every stock market crash is an opportunity – an opportunity to buy the “next big thing” in the stock market very cheaply, while everyone worries about short-term problems that will pass (they always do).
In the 1980s, that “next big thing” was the computer. In the 1990s, it was the Internet. It was the smartphone in the 2000s and electric vehicles in the 2010s.
And now, in the 2020s, it’s automating.
Today is the time to bet big on automation actions. They are very cheap, only trading for a few dollars… But they will absolutely skyrocket over the next decade as robots and software devour the world.
While automation isn’t the only megatrend I see great promise in…
I will share my insights and predictions with esteemed analysts Louis Navellier and Eric Fry at the Early Warning Summit 2023. Join us Tuesday at 4 p.m. Eastern Time to learn more about the growth potential of the energy sector and where to find the best profit opportunities in the market.
With our advice, you can succeed no matter what the market turns.
As of the date of publication, Luke Lango had (neither directly nor indirectly) any position in the securities mentioned in this article.