The Game of Investing, Vol. 12
We’re diving into how a confluence of evolving technologies is giving way to an automated revolution that will change the way we live… and invest.
Our expert today is none other than Real Vision co-founder and CEO Raoul Pal.
According to Raoul, the world is facing massive issues with debt and aging demographics, but the impending technological revolution is a light at the end of the tunnel — and an opportunity for investors.
In this issue, we’ll cover 3 things:
- Raoul’s secular thesis for where financial markets and the economy are headed
- The Exponential Age — what it is and what technologies it entails
- How to invest in this brave new world
Welcome to the Game
Welcome to The Game of Investing, a bi-weekly newsletter bringing you “aha” moments and actionable lessons from Real Vision experts. No matter your level of expertise, markets are tough — which is why we all have to put in the work. Ultimately, the game of investing is a competition with yourself. Our mission is to help you navigate the path to success. Prepare to level up.
Let’s get started.
LEVEL 1 — The Secular Trend
As you may recall from Issue No. 9, there are 3 types of market drivers: secular, cyclical, and tactical.
- A secular trend is a long-term trend driven by major shifts such as demographics, debt, and technology.
That’s exactly what Raoul believes is happening in the world right now.
The global economy (and markets) depends on GDP to grow. “GDP is population growth plus productivity plus debt growth,” Raoul explains.
Population growth and productivity are plummeting globally while private and government debts balloon — solving for productivity becomes key to a prosperous future.
That’s where technology comes into play.
🔑 Raoul believes we’re nearing the end of a cyclical downtrend within a larger secular trend. Markets have been dragged lower as the economy works through this inflationary post-pandemic era, but Exponential Age technologies can increase productivity and catapult markets higher.
The takeaway: “This is the time to be looking for generational opportunities to buy into secular themes,” says Raoul.
LEVEL 2 — The Exponential Age
The Exponential Age is the idea that a combination of technologies will hit mass adoption simultaneously, bringing improvements that are rapid and tangible.
According to Raoul, we are fast approaching mass adoption of technologies like AI, blockchain infrastructure, crypto, and quantum computing.
- All of these technologies should supplement and expedite the efficiency and adoption of the others.
🔑 The takeaway: While some traditional jobs will suffer, Raoul believes that the new AI-driven world will see more entrepreneurship, bringing explosive investment opportunities.
LEVEL 3 — Investing in the Future
If this is a generational entry point to the next leg higher in a secular trend, we need to know where to look.
A reminder: understanding your own timeframes and goals is key to investing.
- “My thesis is a long-term one,” says Raoul. “Could markets go lower from here? Possibly. I could be wrong in the short term.”
Raoul is targeting several specific sectors for investment.
- Base layer infrastructure — Data networks like Starlink, 5G, and 6G technologies.
- Quantum computing — “Everyone from Google to foreign governments are working on this,” says Raoul. “A breakthrough is coming.”
- Artificial intelligence — “It competes with humans… but it also enhances our productivity.”
- Crypto and blockchain — “Digital asset layer that will allow everything to move around.”
- Semiconductor chips — “The processors that will power it all.”
For more details on the exact investments Raoul is targeting — plus a deep dive into why India may be the best investment opportunity in the Exponential Age — Real Vision members can check out this video.
Thanks for reading. In our next issue, we’ll flip the script and visit the fundamentals of value investing. After all, diversification is key.
See you then.
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