Three things to watch in 2021.
We believe that companies that exhibit secular growth opportunities can transcend top-down economic worries, interest-rate fluctuations and unpredictable trade wars that create short-term noise and volatility. With an eye toward an ever-more innovative future, we continue to focus on long-term investment themes that will shape the global economy and uncover companies capable of delivering on their potential for years to come, such as:
- Home as a sanctuary One significant change from the Covid-19 pandemic is how we perceive and value our homes, and we believe the home will continue to be viewed as a “fortified sanctuary” for years to come, driving above-trend investments for years. The sheer amount of time spent at home has illuminated every fault, crack, problem or ugly piece of furniture one could imagine. As a result, we believe consumers will be investing in their homes at an accelerated rate in a post-Covid world—to maximize quality of life, enhance remote work capabilities and everything in between. These investments should benefit a multitude of design and functional categories, from additions and remodels to accentuating outdoor living to installing backup power generators to protect against climate extremes and a deteriorating electrical grid.
- Proliferation of automobile intelligence Seismic shifts are underway involving our cars—a change we believe is the largest since the first car rolled off Henry Ford’s assembly line in 1908. That includes everything from making cars smarter to a greater move toward electric vehicles to autonomous driving. Until recently, cars were far behind the curve in terms of their technological capabilities. Thanks to big leaps in artificial intelligence, smart features will be increasingly integrated into our vehicles allowing for greater customization of the driving experience in terms of comfort, music/entertainment, access to traffic and venue information as well as safety improvements. We see this as a decade-long theme for growth.
- Maturation of the cannabis supply chain There is building momentum, state by state, to legalize marijuana for medicinal and recreational purposes. We’ve reached a tipping point with the cannabis industry rapidly moving from a Wild West operation to a legitimate enterprise. This transformation will mandate an enormous investment in the industry’s infrastructure across production, packaging, growing and distribution. For example, cultivating the product will require an influx of growing materials, such as lights, nutrients, climate controls and other aspects involved with the hydroponic systems typically used in cannabis production. Our interest in this industry isn’t so much on the growers, it’s on the vast opportunities across the cannabis supply chain as the industry goes mainstream.