28 th Annual Wealth Management Conference

Transcription

1 28 th Annual Wealth Management Conference

2 GAME CHANGERS Presented by: Robert Lutts, President and Chief Investment Officer Pedro Palandrani, Research Intern

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5 Goal of this Presentation Core belief: A world full of innovation is constant. Train yourself to see, understand, and invest properly in changes in our economy.

6 Game Changers What is a Game Changer A person who is a visionary. 2. A company that alters its business strategy and conceives an entirely new business plan. This type of company switches up and forms a new business strategy in order to compete directly or indirectly with competitors. A game changer changes the way that something is done, thought about or made. BREAKING DOWN Game Changer Game changers are people or organizations that see a new way to complete a task that is more efficient than the traditional methods. These innovations open up a new avenue of economic growth and transform the image of the industry. Big leaders with big ideas are commonplace throughout the business world as every manager strives to become a game changer in their respective field.

7 Game Changers from Years Past Fast Food Ray Kroc McDonald s, Whole new industry Xerox Technology Chester Carlson and Joe Wilson Personal Computers Dell, Apple, Microsoft Healthcare Innovation Syntex Corp: Birth Control - Sexual Revolution Medical Breakthroughs Drugs, Cardiac Care, X-ray Technology, MRI, Ultrasound

8 Ray Kroc, McDonald s Corp. Kroc created a whole new industry Fast Food Industry Value and Convenience The McDonald s Standard McDonald s University McDonald s Stock Chart ( )

9 Joe Wilson, Xerox Corp. The world did not know it wanted a copy machine! Joe Wilson Did! Pure Innovation Initially unsuccessful until the lease $25 a month scheme was developed (pay 10 cents for copies). 15 years plus to bring to market Xerox Corp. Stock Chart ( )

10 Jeff Bezos, Amazon Online Innovation Books Create market then figure out how to become profitable. Market Place Prime Amazon Web Services Create new Businesses along the way Bold Innovation Test, Test and Test Amazon Stock Chart ( )

11 Focus of this Lecture Three Game Changers on Cusp of Great Wealth Creation 1. Transportation - Electric Vehicles 2. Alternative Energy - Solar Wind/Batteries 3. Artificial Intelligence Three Markets

12 India to sell only electric cars by 2030 (June 3, 2017) CNNMoney China mulls petrol car ban, boosting electric vehicles (September 11, 2017) TheEconomicTimes Norway to completely ban petrol powered cars by 2025 (June 4, 2016) Independent UK Netherlands moves to only allow EV sales by 2025 (2016) InsideEVs

13 Electric Vehicles (EV)

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16 Electric Vehicle Tesla Platform Weight Distribution of Battery (floor is Battery) a Major factor in Performance

17 Four Times More Energy Efficient Than A Combustion Engine

18 Evolution to Electric Vehicles

19 Evolution to Electric Vehicles

20 Tesla s Bold Ambitions Source: Goldman Sachs

21 facts

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24 The World Is Changing

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27 Focus of this Lecture Three Game Changers on Cusp of Great Wealth Creation 1. Transportation Electric Vehicles 2. Alternative Energy Solar Wind/Batteries 3. Artificial Intelligence Three Markets

28 The World Is Changing

29 The World Is Changing

30 The World Is Changing Wind Power Is Economically Superior to Solar Today But Has limitations: Location and Maintenance We believe longer-term solar will be less costly: Cost Curve Decline No Moving Parts

31 The World Is Changing

32 Global PV Demand

33 PRICE Guggenheim Solar ETF $ $ $ $64.00 $32.00 $16.00 $8.00 $4.00 $2.00 Solar Industry Grew 40 Fold While Stocks on average in Solar Industry Declined 91% ( ) to today..many sell at or below book value today. You have to have courage to buy into this Solar sector today. Many call the space un-investible. $1.00 Guggenheim Solar ETF

34 Focus of this Lecture Three Game Changers on Cusp of Great Wealth Creation 1. Transportation - Electric Vehicles 2. Alternative Energy - Solar Wind/Batteries 3. Artificial Intelligence Three Markets

35 Artificial Intelligence: Top Three Markets Transportation Revolution Healthcare Genomic and Data Data Center AI Revolution Source: Nvidia s Blog

36 Human vs. Computer Cognitive Ability Big Data + Machine Learning = Ability to Solve Complex Problems

37 Transportation Disruption Advanced Driver Assistance Systems (ADAS) Mobileye, Tesla, Delphi, Most Global Automobile OEMs Autonomous Driving Mobileye, Google, Baidu, Tesla, Delphi, Uber, Audi Potentially coming in 2021 time frame Shared Mobility / Ride Hailing Apps Uber, Lyft, Didi Chuxing (1.43 billion rides in 2015 in China), Uber/Didi combination in China, Tesla? Electric Vehicles Tesla & Emerging Competitors GM, BMW, Porsche, Audi, Nissan, BYD

38 ADAS Evolution to Autonomous Driving

39 ADAS Evolution to Autonomous Driving Source: Texas Instrument

40 Autonomous Driving in Beta Testing

41 Growing Market Opportunity At 100 million vehicles/year, this could represent a $315 Billion market opportunity roughly 10 years from now

42 Shared Mobility & Ride Hailing Services 2016 Uber Net Revenue $6.5 Billion and 2 billion rides in 2016 Uber has approx. 500,000 1 million drivers in more than 54 countries 2016 Lyft Net Revenue of $700 Million and 163 million rides

43 Shared Mobility Potential

44 Focus of this Lecture Three Game Changers on Cusp of Great Wealth Creation 1. Transportation - Electric Vehicles 2. Alternative Energy - Solar Wind/Batteries 3. Artificial Intelligence Three Markets

45 Artificial Intelligence Definitions Artificial Intelligence The capability of a machine to imitate or simulate intelligent human behavior. Machine Learning Enabling computers to learn and teach themselves. Deep Learning Class of machine learning techniques that exploits many layers of nonlinear information processing ( neural networks ) to extract patterns, features, conclusions not unlike the human brain. Big Data Analytics Process of examining large data sets to uncover hidden patterns, market trends, customer preferences and other useful business information. Computer Vision Using machine learning for recognizing images and making conclusions based on them e.g. reading an x-ray and making diagnosis/treatment decisions.

46 Big Data & AI Virtuous Cycle

47 AI Products Early and Evolving AI Agents or Assistants Amazon s Alexa, Apple s Siri, Google Home, IBM Watson First set of products

48 AI Applications Longer Term

49 Artificial Intelligence Leaders Nvidia Facebook Amazon Google/ Alphabet IBM

50 Artificial Intelligence Winners June 30, 2016 September 29, 2017 Nvidia 291% Facebook 42% Amazon 35% Google/ Alphabet 33% IBM -3%

51 Companies Leading In These Three Areas of Innovation Game Changers Ongoing and Emerging: Artificial Intelligence Google, Facebook, Amazon, Alibaba, Mercadolibre (GOOG, FB, AMZN, BABA, MELI) Search Technology Alphabet /Google (GOOG) Graphic Chip Interphase Nvidia (NVDA) Energy Storage Business Tesla (TSLA), BYD Co. (1211HK) Alternative Energy Tesla (Solarcity), Solar ETF (TAN) Vestas Wind (VWS DC) Health Monitoring Tech. Dexcom (DXCM) Inogen (INGN) Novo Nordisk (NOVOB DC) Cloud Data Management Salesforce (CRM), Microchip (MCHP) Smart Software: Microchip (MCHP) Advanced Material: Carbon Fiber Hexcel (HXL)

52 Summary/Conclusions Successful Growth Investing Identify real change in industries. Find Leaders. Invest Early before it feels comfortable. Look for Support Industries. Avoid losing players, old leaders. Be Open to Change. Look for Stemwinders. This will help. Invest large enough allocation in new growing sectors.

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