Markets are in the doldrums as an inflationary environment continues Federal Reserve reluctant to ease rate hikes. How investors are fleeing the markets in droves, economist Raoul Pal has this advice for the community.
What happened: Exponential age technologies are so “incredibly game-changing” that this macro setup is one of the best gifts we’ll ever get, said economist Pal. But most people wouldn’t accept it because they think interest rates and inflation are more important than exponential growth, he added.
“It’s the rate of change in interest rates that affects growth, not absolute rates, and when we reach ‘terminal rates’ the rate of change goes to zero (or negative if they are cut),” the economist said.
He sees new-age technologies like AI, metaverse, IoT, longevity, distributed computing, space, robotics, genetic science, and blockchain as “unstoppable.”
Most people miss this, he said, adding it could be the case apple inc AAPL or Tesla Inc. TSLA reinventing it, or even creating a “crappy, cheap capital” business model.
Everyone will miss that 100 percent year-on-year growth, which makes those rate/inflation fears obsolete, he said. This is “secular” and not “cyclical,” he added. Valuations will be very attractive very soon, according to Pal.
“Exponential trends aren’t mean reversions, except for the long-term long-term trends,” he said.
See also: China’s Semiconductor Industry ‘Decapitated Overnight’: What ‘Annihilation Looks Like’
Why it matters: Most blue chips and high growth stocks have taken a major hit in the current market downturn. Tesla, for example, is down about 50% since its record high on Nov. 4. This is despite the company continuing to deliver despite macro and geopolitical pressures.
fund manager Cathie Wood Has previously gone to bat for technology. In May, she suggested that artificial general intelligence is likely to change the way the world works. This technology alone can help boost GDP growth from 3% to…
