The world feels a little crazy now.
We have had a hot war in Europe for the first time since the 1940s. Fear of nuclear war is as high as it has been since the 1950's. Inflation is operating at unprecedented levels since the 1970s. And petrol prices are rising at an all-time high.And as a result, stocks are declining.
However, amid the turmoil on Main Street and Wall Street, my team and I remained calm, calm, and organized. Instead of escaping this selloff, we welcome you.
Why? Because while the world may seem insane at the moment, it does not end there. Indeed, as the saying goes: This too will pass away.
Soon, Putin will be suspended. Geopolitical stability will be restored. Economic sanctions will be lifted. The chains of supply will be healed. Inflation - and gas prices - will go down.
Make no mistake about it. Inevitably, all of that will happen.
And if that happens, stocks will rise again in a significant way. But not everyone will be treated equally. Instead, tech stocks will crush everyone else when the big market arrives.
And… why? To answer that question, we must look back and look at the “big picture.”
The World Is Changing
The world today is vastly different from what it was 20 years ago.
The rules have changed. The presidents have changed. Sports teams have changed. And the price of gas has definitely changed.
But the most important of these differences has been the adoption of technology around the world.
Twenty years ago, work was described as an entry into office and a recording of things. Today you can work from home with Zoom meetings (NASDAQ: ZM) and combine all the numbers you need in Microsoft (NASDAQ: MSFT) Excel.
You used to go to the bookstore to find your favorite books and magazines. But today you read all those things on the iPad.
Your children will collect a list of all the student's home phone numbers on their first day of school. Today you just keep those numbers on your iPhone.
Twenty years ago, he fought in supermarkets and rushed to Blockbuster Friday night to make sure the latest hiring was in stock. Now you buy stuff on Amazon (NASDAQ: AMZN) and stream movies via Netflix (NASDAQ: NFLX).
Technology has swept the world.
It’s amazing when you sit down and think about it. Everything about our lives - really, everything - has changed over the last 20 years, thanks to technology.
But if you think that's crazy ... okay, I have to warn you that you haven't seen anything yet ...
Because the next decade will be more technologically disruptive than the last 20 years combined - and then more!
And while that is my opinion, it is also true. There are two potential forces operating here all without ensuring that the pace of technological development will accelerate by the 2020s. That doesn't matter what Putin does, or where inflation falls, or how high petrol prices will be in 2022.
These two forces are far more important than any of these.
Moore Law Will Help Technology Shares Succeed
The first power is known as the Law of Moore.
Back in the 1960s, Intel (NASDAQ: INTC) founder Gordon Moore - who came from my alma mater, Caltech - noted that the number of transistors per square inch in integrated circuits seemed to double in one year. He predicted that the practice would continue in the future. This condition is known as Moore's Law.
Few believed that Moore's Law would be true as we went from a few to thousands of transistors. But, look, look, it's always true!
Just look at the chart below. The number of transistors in a semiconductor chip has doubled every single year in the last few decades. And the result is a significant increase in basic computer power. In other words, thanks to Moore's Law, the computing power of technology products and services will improve significantly in terms of ever-increasing prices over time.
Do you remember how it took them decades from house lines to cell phones? And then about ten years from mobile phones to smartphones? This acceleration of the adoption of new technologies - based on accelerating the development of basic technologies - is due to Moore's law.
And thanks to Moore's Law, we will probably move from smartphones to another future communication device - like real augmented glasses - in the next few decades.
Moore's Law is historically proven that promises to accelerate the power of our technology platforms in the next two, three, five or 10 years or more, no matter what happens in Europe or in gas prices. Indeed, the situation is already endemic with the war and recorded inflation.
Wright Law plays a major role
While most people know about Moore's Law, many are unaware that it may not even be the most important driver of exponential tech progress in today's world.
Instead, the title may be reserved for Wright's Law.
While studying aircraft production in the 1930's, the U.S. aerospace engineer Theodore Paul Wright decided that in both aircraft production doubles, the demand for personnel had been reduced by 10% to 15%.
Wright added this scenario to all products and services, reinforcing what is now known as Wright's Law. This means that for every two-fold increase in the production capacity of a product or service, the cost of production decreases by a fixed percentage.
Like Moore's law, Wright's Law was unquestionable in its early days. But it has been true. Perhaps one of the biggest highlights of Wright’s Law is the cost reduction of the Tesla (NASDAQ: TSLA) Model 3, presented below by our friends at Ark Invest.
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Courtesy Grizler.com
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