I enjoy reading futurist research reports like BofA Securities’ recent 152-page To the Moon(shots)! - Future Tech Primer, even if I treat them with a giant dose of skepticism. Experience tells me that of the 14 investment themes outlined by the report’s author Haim Israel, three quarters of the ideas are likely to fizzle out. The list does, however, provide a list of planned or ongoing technological advances to follow in order to potentially uncover some huge future winners.
I will list the 14 potential moonshots off the top. They are 6G connectivity (higher data volumes), Brain Computer Interfaces, Emotional AI (computing based on human emotions), Synthetic Biology (using genetic technology to design new organisms, including edible ones), Immortality (longevity would be more accurate), Bionic Humans (technologies like exoskeletons for the disabled and warehouse employees, and the implanting of artificial corneas, which will be tested this year), eVTOL (electric vertical takeoff and landing vehicles), Wireless Electricity, Holograms, Metaverse (virtual world human connectivity), Nextgen [next generation] Batteries, Oceantech (tide-based electricity production and precision fishing are examples), Green Mining (including deep sea mining) and CCS (carbon capture storage).
Advances in brain computing interfaces are among the more remarkable revelations in the report. BofA notes that BrainGate Co., a private company based in Massachusetts, has already developed a brain implant allowing users with spinal cord injuries to control a cursor on a computer screen. Australian firm Synchron Inc. designed an implant allowing patients with paralysis to text, bank, shop and email.
Mr. Israel might be overstating things when he writes “human augmentation will likely form a critical part of our future … [allowing humans to] live longer, healthier and stronger and faster with superhuman capabilities.” But still, amazing related technology already exists.
Sarcos Robotics, currently completing a merger with publicly traded Rotor Acquisition Corp., has successfully built and tested an exoskeleton allowing workers to lift 200 pounds without strain and accomplish precision movements with machinery.
The section on batteries was disappointing, noting only that research has made conventional lithium ion batteries more affordable and emphasizing that new breakthroughs will eventually be needed for the global transition to renewable power.
Many of the ideas presented in the report are currently uninvestable, either because there are no publicly traded companies or the industries are too early stage for most risk-conscious investors. The list of investment themes, however, can be kept on investors’ radar as things proceed and revenue and profit growth become apparent for individual companies in related stocks.
-- Scott Barlow, Globe and Mail market strategist
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Stocks to ponder
Metro Inc. (MRU-T) The share price of this grocer has dropped 5.5 per cent over the past week, putting the stock in oversold territory. However, it is nearing strong technical support, and with steady earnings growth, a rising dividend, reasonable valuations, and a healthy balance sheet, it might be a name for investors to consider. Jennifer Dowty looks at the investment case.
The Rundown
Canada’s first ETF especially for retirees has been around for a year now: Here’s what we’ve learned about it
The Vanguard Retirement Income ETF Portfolio (VRIF) was introduced a year ago with a mission to produce reliable monthly income using a portfolio with a 50-50 split between stocks and bonds. In that sense, VRIF has been a success. Investors have received 8.7204 cents a unit monthly in 2021, good for a yield of around 4 per cent based on the price early in the year. Still, the experience of the past year shows VRIF is a fairly complex product that requires close attention. Rob Carrick reports.
It’s been a rough year for bond ETFs, but here are some worth considering
People are dumping their exchange-traded bond funds, and, in many cases, switching the money to equities, which they perceive as being safer. Gordon Pape takes a look at some of the bond ETFs he has previously recommended to see how they’re performing. Be prepared for a surprise: one ETF has been generating very decent returns this year.
Higher taxes are coming and for global markets, that could be a good thing
And so it begins: Taxes in the world’s wealthiest countries are rising. Taxing higher incomes won’t be welcomed by rich individuals while several investment banks have cut Wall Street forecasts for 2022. Goldman Sachs reckons S&P 500 earnings-per-share would be 5% lower if corporate taxes go to the 25% proposed. Yet, most investors and economists appear unperturbed and some even say targeted tax hikes that reduce burgeoning inequality will benefit markets in the longer-term. Dhara Ranasinghe and Sujata Rao of Reuters report.
Sustainable investment funds release more data, details as investors seek transparency
There’s no one way to define sustainable investing, but more fund providers in the space are beginning to provide hard numbers to back up their claims. The trend toward increased disclosure comes as sustainable investing sees both rapid growth and increased scrutiny by regulators and investors amid concerns the environmental credentials of funds are being overstated. Ian Bickis of The Canadian Press reports.
Growth? Value? Some investors opt for a bit of both
Some investors are playing this year’s tug of war between growth and value stocks by owning companies that straddle the line between the two categories, as uncertainties mount over the U.S. economy’s trajectory in the months ahead. David Randall of Reuters reports.
Others (for subscribers)
The most oversold and overbought stocks on the TSX
Monday’s analyst upgrades and downgrades
Monday’s Insider Report: Company presidents are trading these three stocks
Why the Fed might welcome a bond market tantrum
Globe Advisor
The Financial Times: Big picture appeal of Chinese assets remains strong
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Ask Globe Investor
Question: The Globe’s John Heinzl mentioned in a column earlier this month that he bought additional shares of Royal Bank and Toronto-Dominion Bank for his dividend growth model portfolio. Isn’t he worried about the Liberal Party’s plan to impose a 3-per-cent surtax on bank profits above $1-billion?
Answer: Not enough to stop investing in bank stocks. The proposed surtax on large banks and insurers, combined with a separate, temporary surcharge called the “Canada recovery dividend,” would add about $2.5-billion to government coffers annually over the next four years, according to the Liberal Party’s fiscal and costing plan. To put that into perspective, it represents less than one-fifth of the roughly $15-billion in earnings the six biggest banks made in just the most recent quarter.
But here’s the thing: None of this is a done deal. First, the Liberals have to win the election, and that’s no shoo-in. Then, assuming they have the political will to move forward, they plan to consult with the Office of the Superintendent of Financial Institutions to determine exactly how much the big banks and insurers would pay. Count on pushback from the financial industry, which doesn’t want to be treated as a piggy bank by the government, and from pension funds and other investors who don’t want anyone messing with their beloved bank dividends.
Here’s one more reason I’m not worried: Bank stocks dropped when the proposals were first announced, which suggests the bad news is at least partly baked in to share prices.
Bottom line: Regardless of what happens in the election, Canadian bank stocks will continue to be a great long-term investment.
--John Heinzl
What’s up in the days ahead
Markets started off this week with a major selloff. How long will the pain last? Our columnists will share their insight.
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Compiled by Globe Investor Staff