Trading

  • The World’s Population in 2022

    The world will reach 8 billion people at some point this year.  That is a new (and potentially scary) milestone. 

    Part of the concern stems from how fast population is growing.  Consider that the world’s population has doubled during the last 50 years … and the geographic distribution of the population has changed as well. Here is an infographic that highlights some interesting trends.

    image from www.visualcapitalist.com via visualcapitalist

    If you want to look at where the economy is going over time, you don't have to guess to wildly.  Population growth is a primary clue.  Consequently, focus on where the most children are being born – or where relatively more children are being born recently.  For example, economists don’t have to work too hard to figure out how many 18-year-olds will exist somewhere in the next 15 years – they start by counting the 3-year-olds.

    While China, India, and the U.S. top the world's population lists (with the U.S. dramatically behind China and India), many countries are creeping up the list. In fact, Lagos, Nigeria's largest city, is expected to the world's biggest megacity by the end of the century. Many of the world's highest growth rates are found in Africa. 

    As another "surprise," India is set to pass China as the world's most populous country. Meanwhile, much of Europe's populations are contracting. 

    The U.S. is still growing – but is not matching the rates of emerging countries in Asia and Africa. 

    The world is expected to reach a population of around 10 Billion before 2100.  With that said, many expect the number to decrease from there. 

    Interesting?

    How do you think this will affect the next 20 years? 

  • The New Era of Energy

    A couple of weeks ago, I talked about oil production.  This week, I want to look at the current energy landscape. 

     

    Screen Shot 2022-08-18 at 12.41.13 PMView the full infographic at visualcapitalist

    Over the past several decades, there has been a massive shift in how we produce and consume energy.  This has been driven by the tech boom – as well as by climate awareness.

    The practical realities of widespread tech adoption directly impact energy consumption.  For example, there are now over 7 billion people with smartphones.  As the population (and the number of gadgets and tech we use) grows, logically, so does our energy consumption.

    Luckily, we're also getting better at powering them. 

    On a different front, oil is still a meaningful and vital part of the energy ecosystem … but, now, it's being supplemented by multiple renewables. 

    Screen Shot 2022-08-18 at 12.41.59 PMView the full infographic at visualcapitalist 

    Over the last decade, investment in green technologies has helped the cost of renewable energies drop precipitously. 

    That spurred a different set of products and use cases.  For example, we've seen the number of electric cars grow exponentially.  In 2011, there were approximately 70,000 EV units in the world.  Now there are around 16.5 million. 

    This isn't a commentary on the environmental benefit of renewables; it is an observation about the direction energy is heading. 

    And, just like with AI, despite being a space that's existed for a long time, it is still in the "early adoption" phase. 

    Based on estimations, the IEA projects an 8x growth in EV by 2050.  This also means that we will use an increasing amount of batteries and rare metals.  Currently, China controls the supply chains and critical resource constraints. 

    If our goal is to be energy independent, we have a long way to go … Nonetheless, recognize that this creates massive business and investment opportunities. 

    Onwards!

  • Where Are Children Being Born?

    Everyone knows that children are our future. They're the next generation of innovators, entrepreneurs, and workers. Countries that are having a natural decrease in population due to families not having children will likely find themselves becoming less important on the geopolitical stage.

    While the future is often hard to predict, here is easy “prediction” (that is much less of a prediction than it is simple math). In order to predict how many 18-year-olds there will be in a particular country in fifteen years, simply count the 3-year-olds there now.  Yes, there will be some death or migration … but it is an easy way to get a sense of some important mega-trends.

    With that said, the U.S. saw many states with more deaths than births in 2020 and 2021. 

    So, where are children being born?

    Where-Will-The-Next-1000-Babies-Come-From

    India, China, and Africa all are seeing massive population growth. America is still net positive. It's also worth noting that India and China are topping the list because they already have such large populations. Their birth rates are actually slightly below average. 

    On a longer term scale, it's also worth noting that population growth has been declining since the 1960s. Partly due to education, wealth, and the move from rural to urban living. 

    Slowing population growth means a larger portion of the population is older. As median age increases, there are lots of potential economic consequences.

    It's an interesting compounding of consequences. 

    We'll see if the countries with the largest population growth have the economy and infrastructure to support that growth. 

  • Oil Production By Country in 2021

    You could argue that we're in the middle of the first energy crisis of the 21st century.

    While gas prices are finally on the way back down, the recent surge is driving inflation and has consumers thinking much more about where their oil comes from. 

    When I last wrote about oil production, the shocking "secret" was that the largest importer of oil into the U.S. was Canada – and that most of our oil was produced within the U.S. 

    Largest-oil-producers-in-2021-by-countryvia visualcapitalist

    While the U.S. is the largest producer of Oil, OPEC is the largest organization. OPEC accounts for 35% of total production, with Saudi Arabia accounting for a third of OPEC's output. 

    Almost half of the world's oil production comes from The U.S., Saudi Arabia, and Russia. 

    Also, despite being the world's largest oil producer, the U.S. is still a net importer of oil. 

    Supply constraints on oil – as a result of sanctions on Russia – are creating a price increase with skyrocketing demand from mid-pandemic levels. Combine that with OPEC refusing to increase production to meet demand, and you have an energy shortage. 

    The U.S. has already started releasing barrels from its strategic reserves, and we've seen gas prices go down as a result, but it remains to be seen if our efforts will be enough to curb the shortage. 

    What else do you think we should be doing?

  • US Spending in 2021

    In a prior post, we looked at the Global GDP in 2021. Now, let's look at US Revenue vs. Expenditures in 2021. 

    Ezgif.com-gif-maker (9)

     

    So, from the start, we can see a 2,770-billion-dollar deficit last year. The #1 expenditure was income security. For those who don't know, income security is an extremely broad spending category. It covers everything from tax credits and unemployment to housing assistance, foster care, and many other welfare programs. It's somewhat of a catch-all for services that help people get necessities. 

    Surprisingly, the US pays more per person for healthcare than countries with nationalized healthcare. 

    Looking at 2021 isn't the best indicator of America's spending history as a whole; there were a lot of one-time events – and a pandemic. Usually, the deficit isn't that staggering. 

    Screen Shot 2022-08-05 at 5.10.06 PMvia Congressional Budget Office

    While the deficit may grow out of control, debt is a powerful tool – not just a liability.  Nonetheless, given our current economic situation, inflation, and rising interest rates, the strategy that got us here might not be the best strategy to get us where we want to go.

    What are your thoughts? 

  • Here Are Some Links For Your Weekly Reading – July 17th, 2022

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    Here are some of the posts that caught my eye. Hope you find something interesting.

    Lighter Links:

    Trading Links:

  • Americans’ Top Financial Concern

    It's no secret that the economy is slowing – with high inflation rates and rising interest rates. 

    According to Mohamed El-Erian, from Queens College at Cambridge University, we're experiencing stagflation – which is when inflation is high but growth is slowing significantly. Theoretically, that leads to recession. 

    Inflation-Top-Financial-Concern_Infographicvia visualcapitalist

    The Consumer Price Index has also grown by over 8% in the past year, so the American household is facing financial threats from many angles. 

    Many feel that the Fed has responded disappointingly recently, and their response (or lack thereof) will be a major dictator of whether we enter a recession. 

    I believe that emotions play a role too. When people are afraid, they spend less and hoard what they can to save themselves from an unknown future. They feel anticipatory grief.  And their fear, uncertainty, and doubt ripple through society and our lives. 

    Personally, I've weathered my heaviest storms by sailing toward the future regardless of the threats. An abundance mindset is a powerful tool, and as more people feel confident it becomes a macroeconomic trend with real influence. 

    I'd encourage you to think about what opportunities there are and will be. There are always seasons of change … Winter eventually comes – and goes. Nevertheless, winter can be a great opportunity to plan your next moves and build the infrastructure to sow more seeds in the coming spring. 

    As well, unlike nature, you can personally have springtime while the majority are in winter. We're currently in an A.I. springtime – and I believe that will continue regardless of economic trends. 

    Happy to talk about this … Let me know what you are thinking and feeling!

  • Here Are Some Links For Your Weekly Reading – July 2nd, 2022

    Businessman-stands-in-front-of-a-diving-stock-market-graph-with-trough-lab-new-yorker-cartoon_u-l-pgqnyd0

    Here are some of the posts that caught my eye. Hope you find something interesting.

    Lighter Links:

    Trading Links:

  • How Bad Were The Markets In The First Half Of 2022?

    The S&P 500 has had its worst first half performance since 1970. 

    Screen Shot 2022-07-01 at 3.30.06 PMvia AXIOS

    But, the S&P's performance isn't the only danger indicator. 

    Screen Shot 2022-07-01 at 3.32.52 PMvia Fortune

    Stocks, bonds, crypto, and more, all saw rapid declines in the first half of 2022. 

    It's hard to pin the blame on any one factor. Was it the result of the actions we took to stabilize the economy during the throes of Covid? Is it the runaway inflation, Russia, or the continuing supply-chain issues? 

    It feels like everything that could go wrong – is going wrong. I mean, how often do stocks and bonds fall at the same time?

    On a positive note, bear markets are often much shorter than bull markets.  Also keep in mind that while global growth is slowing, innovation isn't!

    Don't forget, “Winter” for the economy or a particular industry doesn't have to be winter for you. 

    Onwards! 

  • Companies With The Most Patents in 2021

    Intellectual Property is an important asset class in exponential industries.

    Why?  Because I.P. is both a property right (that increases the owner's tangible and intangible value) and a form of protection.

    They say good fences make good neighbors.  But you are also more willing to work to build an asset if you know that your right to use and profit from it is protected.

    As a result of that thinking, Capitalogix has numerous patents – and we're developing a patent strategy that goes far into the future.  So, it's a topic that's front of mind for me.

    Consequently, this visualization of which companies got the most patents last year caught my eye.  In 2021, the U.S. granted over 327,000 patents.  Here is who got them.

     

    DS-Top-25-Companies-with-the-Most-New-Patents-in-2021-main-Apr20Raul Amoros via VisualCapitalist

    While IBM isn't the public-facing industry leader they once were, they've been topping the list for most patents for the past three decades.  Their patents this past year cover everything from climate change to energies, high-performance computing, and A.I.. 

    What ideas and processes do you have that are worth patenting?  And, what processes are worth not patenting – to keep from prying eyes?

    Food for thought … Onwards!