I am more encouraged than I have been in a long time for the growth, innovation, and success of American business and the American people. Let me be very clear that this is not a stock market prediction or a piece about the markets.
This is about Main Street not Wall Street. Why? It seems to me that many business owners and entrepreneurs are more confident initiating capital investments, new acquisitions, or hiring new employees then they have been in some time. This may be because they are no longer in fear of increased regulation, rules, and taxation. Even if the new administration accomplishes nothing on its agenda, I am sensing that the regulatory and taxation environment is perceived to not get worse. This seems to be enough to drive motion. Thus, if the current administration actually does accomplish tax and regulatory reduction, it may just be a bonus. This is why I have always said “a Washington that accomplishes nothing may typically be the best Washington for Business.”
What further excites me is what is happening in technology. At this point, information storage and transfer are practically free. Therefore, the ability to make use of massive amounts of data went from being potentially prohibitively expensive just a few years ago to costing relatively little today. I am told that computers can now see better than the human eye and hear better than the human ear. Computers can now perform sophisticated functions that require immense amounts of data and storage at pennies on the dollar, when just a few years ago it would have cost thousands.
I would assume that within the next 15 years the cost of energy will move in the same direction as well. With the advent of solar, wind, and battery storage, the incremental cost of energy units could move towards zero. If you get really deep on this, it could for example, eventually mean the elimination of droughts globally. The largest cost in desalinization is power.
Both of these phenomena are happening faster than most folks can grasp, and much of the establishment may be blindsided by them, similar to how the old cell phone makers were surprised by the smartphone. It seems even with the explosive amount of information available about new ideas and products, major positive innovations that penetrate into the main stream rapidly, are initially missed by most.
If we allow our entrepreneurs to take risks unencumbered by unnecessary regulation, and they are willing to take risks without fear of new regulation or taxation coming around the corner, this should drive growth and economic expansion. Add on top of that low or no cost access to data and energy, and magic can happen.
I repeat, I am encouraged. The views expressed herein are those of the author and do not necessarily reflect the views of Morgan Stanley Wealth Management or its affiliates. All opinions are subject to change without notice. Neither the information provided nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. Past performance is no guarantee of future results.
