October 9, 2020


The “gig economy” is large, at about $100B in the US alone and is still early in its shift online.

Like many other tech trends, the pandemic has accelerated growth of the gig economy and warrants a closer look.

What is the Gig Economy?

The gig economy is a labor market characterized by the availability of contracts, or freelance work, instead of permanent full or part-time jobs.

Traditional government employment measurement methods make quantifying the size of this economy challenging.

Nonetheless, estimates (prior to the pandemic) put the size of this workforce in the US at 68 million individuals (over one-quarter of the working age population).

Demographic shifts are also playing an important role in fueling the gig economy.

Surveys show that the Millennial generation favors flexible work hours and a “being-my-own-boss” mindset and are thus more likely to be attracted to the gig economy as compared to Gen X and Baby Boomers.

Gig Economy Origins

The gig economy emerged in the aftermath of the 2008/09 financial crisis and gained traction as sharing economy and digital platforms began proliferating in the years that followed.

Those who lost their steady jobs during the financial crisis were out looking for alternatives to make ends meet.

At the same time, the internet and smartphones were becoming ubiquitous and putting power in the hands of individual consumers, giving rise to expansive digital marketplaces.

Resourceful individuals could participate in these digital marketplaces to capitalize on their excess capacity, be it with their time, their cars, or even their homes.

Beyond greater lifestyle flexibility, these new digital channels of labor distribution have allowed individuals (particularly in the fields of content creation, entertainment and gaming) to bypass legacy institutions and capture more of the value for themselves.

As an example, the videos of a young Swedish comedian, gamer and Youtuber routinely get more views (about 6.3 million) as compared to Fox News (with 3.5 million nightly viewers).

Aside from many standout success stories, average income from the gig economy as compared to traditional workers is surprisingly close (chart below).

Gig Economy Future

One way to intelligently estimate growth in the gig economy is measure payment volumes (chart below).

Doing so indicates a vibrant network exhibiting strong, long-term secular growth.

September 4, 2020

THE INNOVATION ENVIRONMENT: A Correction or Something Worse?

Since the March market lows earlier this year, we have seen innovation (and our Portfolio of the Future) take off.

This was not surprising because innovative companies solve problems such as eliminating the need for fossil fuels, finding a COVID vaccine, or providing entertainment in our homes while the economy was locked down.

But now that stock prices of innovative companies have risen so much since March, and volatility has returned, is all that potential future growth fully priced in to the markets?

Let’s Review…

Typically, the adoption of disruptive technologies follows an S-curve pattern (chart below).

Mass adoption can be summed up as follows: first slowly, then all at once (i.e. the ‘tipping point’ below).

Innovation is Occurring on Multiple S-Curves

Past Portfolio of the Future video blogs have always included this chart (below), and its importance can’t be underscored enough: at no point in modern history have so many separate impactful technology s-curves converged at the same time.

These technologies have the potential to generate strong long-term exponential growth for patient investors.

While each technology will progress at its own rate over the decades to come, indications are that in each instance, markets are still in the early innings.

With this in mind, it is helpful to take a deeper dive into one area of innovative disruption to see if recent market volatility can be seen as a healthy correction or the end of the trend.

An Example…

Let’s review the disruptive trend of streaming media, that is, cancelling traditional TV cable subscriptions in favor of streaming video via Netflix, Amazon Prime Video or Apple for example.

According to Roku’s recent “Cord Cutting” one-quarter of households in the US identified as “Cord Shavers” (i.e. consumers who have cut back their cable service to some degree).

Moreover, nearly half of these Cord Shaver households stated they are likely to fully transition to streaming video in the next six months.

The cable TV industry since 2011 and the number of traditional cable TV households in the US has slowly declined by 2.1% on average per year.

However, this decline likely accelerated in 2020 due to the absence of live sports.

As a result, the adoption of streaming media has most likely accelerated into the exponential tipping point of its s-curve.

The chart below shows two interesting trends:

     -  Stay at home orders resulted in large increase of streaming TV use (left side shows 2020 usage verses 2019 usage on the right hand side);

     -  While usage increased by over 40% this year as compared to last year, streaming represents less than one-quarter of total TV usage;

     -  Therefore, the market is still fairly early on its s-curve, leaving plenty of room for further adoption (and potential stock price appreciation of the related tech companies in this industry).

July 31, 2020


In our last Portfolio of the Future blog, we looked at the post-war industrialization process that yielded our basic physical infrastructure used to build much of modern Western society.

This was contrasted with how the current pandemic has accelerated the shift from physical to digital infrastructure.

One very interesting acceleration, that relates directly to the pandemic, lies at the intersection of biological sciences, high performance computing and artificial intelligence (AI).

In other words, the accelerator, or the spark that has ignited the innovation fire in healthcare, is this pandemic.

More specifically, AI has the potential to have a remarkable impact as researchers look for a vaccine, because AI can do the searching in this massive space that would take humans years (and cost billions of dollars) to sift through.

One of the more advanced AI applications is the use of computers to simulate molecular interactions.

That is, using machine learning models to accelerate the exploration and discovery of new drugs or vaccines.

While seemingly obvious, this is not a widespread practice.

For investors focused on innovation, the most attractive companies are those founded on the principle of using technology and software to solve problems of humanity and, in the process, disrupting large industries with legacy processes.

In this example of healthcare, it is estimated that the global pharma industry spends $180 billion on R&D annually.

The slow process of novel drug discovery and the bloated costs are symptoms of an industry ready for technological disruption in order to:

     1. Reduce the average time and cost required to identify a drug development candidate; and

     2. Increase the probability of discovered drugs entering clinical trial (see chart further below).

The potential implications for humankind are incredible, particularly where universal healthcare is not present; that is, democratizing access to high quality healthcare in a way that is currently not possible due to high costs.

July 3, 2020


We are a society that compulsively creates and stores huge amounts of data.

In fact, the amount of digital data in the world is growing exponentially.

The world’s current technology of recording data on magnetic tape (introduced by IBM in 1952) continues to be a viable option, but two major issues exist with this form of storage:

     1. Exponential growth in data creation makes it difficult for magnetic tape production to keep up with such a large quantity of information;

     2. Magnetic tape quickly loses data, lasting 5 to 10 years before it must be replaced to preserve the stored data.

In short, we are about to have a serious data storage problem that will only become more severe over time.

The Future of Data Storage: DNA

When we think of DNA, we inevitably think of genes and the biological instructions that our bodies follow.

DNA is the natural world’s information storage material, a language composed of As, Ts, Gs, and Cs.

The interesting thing about DNA however is that its data storage capability isn’t necessarily limited to biological uses.

In fact, several companies and researchers have proven that synthetic DNA-based data storage is not only possible, but most likely, the data storage technology of the future.

Advantages of Storing Data in DNA

     1. It Lasts a Lot Longer: As has been demonstrated by the complete genome sequencing of a fossil horse that lived more than 500,000 years ago.

     2. Capacity: DNA can accurately store massive amounts of data at a density far exceeding that of electronic devices. According to research conducted by George Church of Harvard University, all of the world’s current annual data storage needs could be met by a cube of DNA measuring about one cubic metre.

     3. Minimal Energy Requirements: Storing the DNA – essentially mirroring a completely natural process - does not require much energy.

How It Works

Data (1s and 0s) can be stored in the sequence of DNA’s letters (A, G, C, T), turning DNA into a new form of information technology.

DNA is already routinely sequenced (read), synthesized (written to) and accurately copied with ease (chart below):

June 5, 2020


In the US, the mobile payment market increased by just over 40% from 2018 to 2019 (and has been growing rapidly for several years as per the chart below).

Mobile payments are increasingly being used by consumers as comfort levels grow in step with broader acceptance among retailers.

While we still await data for early 2020, we can be sure that, due to the pandemic, the appeal of contactless payments has compressed years of offline-to-online migration into the past several months.

The backbone of mobile payments is the known as the “digital wallet”.

So What is a Digital Wallet?

Simply put, this is a service that allows you to pay for things through a mobile phone app (going further, the most popular apps also have options for currency exchange, bitcoin purchases and stock trading).

It also stores a number of other items a traditional wallet would hold, such as a driver's license, gift cards, tickets for entertainment events, and transportation passes.

Digital wallets are not only easier to use in some cases but are also generally considered to be more secure than a traditional wallet.

Digital wallets have a lot of benefits over a physical wallet:


Rather than digging a card out of a wallet, users can simply hold their smartphone up to a terminal at checkout and go.

Online transaction processes are also streamlined.


Most apps allow you to easily organize all of your information in an easy-to-access way, saving time shuffling through a wallet.

More Security

Physical wallets can be lost or stolen and it is time consuming and stressful to replace lost cards and ID.

A digital wallet negates these problems.

Even if a phone is stolen, the thief would need to break your password on your phone, then any passwords or biometrics used to protect your digital wallet app.

Who Provides and Profits from Digital Wallets?

Typically, the most popular digital wallet apps have been created by tech companies, not the traditional banks.

For example, the Royal Bank of Scotland recently shut down its digital bank after investing 100 million pounds and only attracting 11,000 users in 6 months (other traditional banks have followed suit).

In contrast, a fintech stock trading start-up Robinhood (a private company) reported a tripling in its year-over-year revenues.

Further, validating the agility of administration and value-add services of fintech companies, the US Treasury turned to them to help facilitate the second tranche of payroll protection loans.

With more innovations in fintech paired with strong mass adoption during the pandemic and broader acceptance in both the digital and physical worlds, we should see continued strong growth in the sector.


May 8, 2020


The current pandemic is a testbed for the next generation of vaccine technology.

Historically, effective vaccines take many years to develop safely and to scale up production.

Today however, several experts estimate it could take as little as 12–18 months for a coronavirus vaccine to be widely available.

While this is still uncertain, the past two decades have shown an increased pace of vaccine development (below chart).

Conventional vaccines teach your body to recognize a pathogen, usually by introducing a dead or weakened form of the virus.

This primes the immune system to react if the virus is encountered.

While very effective (this approach gave the world vaccines for polio, measles etc.), developing a vaccine this way is very time consuming.

Beyond rounds of testing, scientists and engineers have to develop specialized biological machinery that can be scaled up to grow virus cells and manufacture the vaccines.

Two Technologies are Increasing the Pace of Vaccine Development

     1. Advances in Genomics

Understanding the genetic composition of a virus shows researchers where its vulnerabilities are.

Mapping SARS (2004) took approximately 5 months and cost upwards of $100 million.

Thanks to major advances in computing power (and associated cost reductions), mapping the current coronavirus took 3 days and cost less than $1,000.

Developments here have led to…

     2. Messenger RNA (mRNA) Vaccine Technology

mRNA acts as an information-carrying intermediary between DNA and protein in the body (chart below).

This type of vaccine uses genetic code to give your cells instructions for how to mount an immune response should the body encounter the virus.

Development could be very fast as this does not require researchers to spend time building special equipment and growing large volumes of pathogens.

When a new virus emerges, the idea is it is quickly genetically sequenced and the genetic code is plugged into an approved vaccine platform with an existing manufacturing process.

If effective, this would be a brand new form of medicine.

Where This Leaves Us

To date no mRNA vaccines have been approved for human use.

However, at least 22 vaccines of this type are currently under development with several already in Phase 1 or Phase 2 trails.

In any event, this technology will be pushed to its limit and we will learn a great deal more about it due to this pandemic.

Patrick Fisher, CIM, FMA

Portfolio Manager & Investment Advisor