Time Is About to Speed Up – How To Profit From the Tech Revolution

In today’s Money Morning…what was early humans’ competitive advantage?…the biggest changes are still ahead of us…investing on the edge of the future…and more…

I’m never the quickest out of the blocks when it comes to reading books. I usually get around to reading something a couple of years after it’s first released.

So what I’m about to talk about is hardly hot off the press. But it’s still fascinating…

The book I’m talking about is called Sapiens, A Brief History of Humankind, by Yuval Noah Harari.

The gist of it is that, not too long ago in evolutionary terms, there were a number of different species of humans wandering the earth. But the humans we know today, Homo Sapiens, emerged ‘victorious’ and now populate the globe, while the all the other species died out.

What was our competitive advantage?

The Cognitive Revolution

Harari says it was the ‘cognitive revolution’, which occurred around 70,000 years ago. Around this time, Sapiens developed the ability to transmit larger amounts of information about the world around them and their social relationships.

Importantly, it also included the ability to transmit larger amounts of information about things that don’t exist. This gave us the ability to create myths, which created belief systems and encouraged cooperation between large groups of strangers.

It gave us the ability to trust each other, which encouraged trade, innovation and development. The other species of humans around at the time (for example, Neanderthals) didn’t develop widespread trust. And they eventually perished. Trust is the foundation not only of all one-on-one relationships, but of humanity itself.

It took a long time to reach the next stage of progress, which was the ‘agricultural revolution’. That occurred around 10,000 years ago. This cultivation of food enabled humans to live in bigger and bigger groups, although we suffered nutritionally. Our diet was no longer as varied.

Sapiens in the pre-agricultural times were far healthier than we are today.

The next revolution occurred much more recently. The ‘scientific revolution’ kicked off around 500 years ago. The changes that have occurred since dwarf any previous 500 year period by magnitudes. As Harari writes:

The last 500 years have witnessed a phenomenal and unprecedented growth in human power. In the year 1500, there were about 500 million Homo sapiens in the entire world. Today, there are 7 billion. The total value of goods and services produced by humankind in the year 1500 is estimated at $250 billion, in today’s dollars. Nowadays the value of a year of human production is close to $60 trillion. In 1500, humanity consumed about 13 trillion calories of energy per day. Today, we consume 1500 trillion calories of energy per day. (Take a second to look at those figures — human population has increased fourteenfold, production 240-fold, and energy consumption 115-fold).

If you took someone from the year 1500, popped them in a time machine and brought them to, say, New York City today, they would probably have a heart attack.

The changes have been insane.

But…get this…it’s about to speed up. Check out the chart below, from waitbutwhy.com. In a series of posts about artificial intelligence, it argues that we’re on the cusp of another knowledge revolution. Human progress is about to escalate markedly.

Click to enlarge

In a recent interview I heard with Harari, he argued that within a few hundred years Homo Sapiens might not even exist in their current form. The explanation for how this may happen is in his new book, which I’ll probably get to in a few years’ time. I’ll keep you posted.

He also raised the prospect of humans being able to live forever, thanks to big advances in technology. Not surprisingly, only the very wealthy would have access to this technology.

While this sounds great, it would create a huge amount of resentment from a large swathe of humanity, and fear from those with access to the technology. It’s one thing to be immune from dying of natural causes, but we can never be immune from accidents. The ‘everlasting’ would live in continual fear of accidental death.

‘That’s fascinating, Greg, but what’s all this got to do with investing?’ I hear you ask.

Investing in the Future of Technology

A few things. Firstly, it’s a reminder that (for me, anyway), the older we get, the more difficulty we have in keeping up with the technological changes that are going on. And, if we’re having difficulty keeping up with what’s going on now, we’re going to have no chance to understand and cash in on what will happen in the future.

It’s much easier for us to invest in what we know and understand. But if you know and understand it, chances are that everyone else does as well. And when that happens, there’s no big money on the table.

If you want your portfolio to have some potential big winners, you have to invest at the edge of understanding. That’s where the potential lies.

My mate and fellow editor Sam Volkering spends his days looking for these opportunities. Here, he talks about a revolution in Australia’s health care industry. Right now, all the noise in Australia surrounds housing, and debt, and what is the government going to do about it. While these are certainly important issues, they are a mere footnote in the progress of humanity that is occurring right now.

So stand back and look at the bigger picture. Make sure your portfolio is positioned for the future, not the past. You can get a start by clicking here.


From the Port Phillip Publishing Library

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Greg Canavan is a Feature Editor at Money Morning and Head of Research at Port Phillip Publishing.

He likes to promote a seemingly weird investment philosophy based on the old adage that ‘ignorance is bliss’.

That is, investing in the Information Age means you have all the information you need at your fingertips. But how useful is this information? Much of it is noise and serves to confuse, rather than inform, investors.

And, through the process of confirmation bias, you tend to read what you already agree with. As a result, you often only think you know that you know what is going on. But, the fact is, you really don’t know. No one does. The world is far too complex to understand.

When you accept this, your newfound ignorance becomes a formidable investment weapon. That’s because you’re not a slave to your emotions and biases.

Greg puts this philosophy into action as the Editor of Crisis & Opportunity. As the name suggests, Greg sees opportunity in a crisis. To find the opportunities, he uses a process called the ‘Fusion Method’, which combines traditional valuation techniques with charting analysis.

Read correctly, a chart contains all the information you need. It contains no opinions or emotion. Combine that with traditional stock analysis and you have a robust stock-selection strategy.

With Greg’s help, you can implement a long-term wealth-building strategy into your financial planning, be better prepared for the financial challenges ahead, and stop making the basic, costly mistakes that most private investors do every time they buy a stock.

To find out more about Greg’s investing style and his financial worldview, take out a free subscription to Money Morning here.

And to discover more about Greg’s ‘ignorance is bliss’ investment strategy and the Fusion Method of investing, take out a 30-day trial to his value investing service Crisis & Opportunity here.

Official websites and financial e-letters Greg writes for:

Money Morning Australia