Disruption innovation typically gains traction during tumultuous times: cheaper, faster, more convenient, more productive, more creative. Consumer and businesses are more willing to change behavior during setbacks.
This period is nothing like the GFC, but while tech budgets were slashed and consumers retrenched during 2008-09, delivered 20% revenue GROWTH and +14% during their worst quarters in that crisis.
Many industries and companies in the crosshairs of disruptive innovation - like autos, energy, banks, pharma, old tech - have attracted investors with high dividend yields in a yield-starved market and share repurchases financed with leverage. Those companies are in harm’s way.
Their stocks feature prominently in traditional equity benchmarks and have been supported by the massive shift to passive and benchmark sensitive investing during the past 20 years, a setup for disappointing returns as innovation disrupts the traditional world order.
Even the #QQQ - once at the vanguard of innovation - has lost its way with airlines (what?), energy, and old tech , #NTAP, and . I haven’t looked at the #QQQ in years. It no longer seems to provide the broad based exposure to #innovation that it once did.
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