There’s a big divide happening right now in America. We’re talking about one between the incredibly wealthy and the average Joe.
While more than 11 million Americans remain unemployed during the pandemic, America’s richest 614 billionaires grew their net worth by an eye-popping $931 billion. Jeff Bezos of Amazon (AMZN) alone increased his wealth by over $90 billion, while Tesla’s (TSLA) Elon Musk grew his personal pie by over $68 billion! Not bad for less than a year’s work.
All told since the beginning of the coronavirus pandemic, American billionaires have raked in a whopping $1 trillion, while millions of others struggle to pay their bills.
This massive chasm between rich and poor has also been accompanied by a shift in the stocks that have outperformed this year. With more folks staying at home and biotech companies racing to find a coronavirus vaccine, biotech and tech companies have surged.
The biotech sector, in particular, soared in 2020. Case in point: From the March lows, the SPDR S&P 500 Biotech ETF (XBI) is up a stunning 114%, while the S&P 500 is up 63%.
Now, look at how the S&P 500 compares to Novavax, Inc. (NVAX), which is currently creating a coronavirus vaccine. It is also being funded by both the federal government through Operation Warp Speed and the Bill & Melinda Gates Foundation.
It’s up more than 1,000% in about nine months!
On the tech side, pandemic plays, like Zoom Video Communications (ZM), also outperformed the market. The video chat app has surged 486% year-to-date. In comparison, the S&P 500 is up about 13% year-to-date.
But the reality is this technochasm – the gap between the wealthy and poor mirroring a boom in tech stocks – has been happening for some time. And on one side of that divide are certain tech companies that are growing faster than ever before. On the other side are the companies going bankrupt in the blink of an eye.
In fact, this happened back in the 1990s, during a time of low inflation and incredible innovation. Back then, the rollouts of the cellular phone networks, powerful personal computers, software, and the internet converged to unleash a tsunami of productivity. This resulted in higher profit margins for virtually every business across America.
In a relatively short timeframe, our ability to communicate, transact, process data, analyze data, and manage supply chains was revolutionized.
We started living in a whole new world. And it carried the broad market 417% over that decade. It also paved the way for truly innovative companies harnessing these new technologies to hand their shareholders incredible returns.
I’m talking about companies like Cisco (CSCO), which rocketed up 113,000%, or Amazon, which is up 72,000%.
And now, we’re again at the cusp of an amazing technological revolution that will carry the stock market to incredible new highs.
The convergence of new technologies like artificial intelligence (AI), 5G, precision medicine, the Internet of Things (IoT), driverless cars, and the blockchain are recreating the very framework of modern society.
And the impact these technologies will have on the global economy will dwarf the internet.
When you add up the economic impact that these technologies will have on the world, it’s staggering…
At least $46 trillion over the next 10 years!
I look for 5G to add $12 trillion to the economy, the Internet of Things to add $19 trillion to the economy, and AI and advanced robots to add $15 trillion to the economy.
The truth of the matter is the potential is significantly greater than what we saw in the 1990s. With that in mind, I will be sitting down with my InvestorPlace colleague Matt McCall for our Early Warning Summit 2021. It’s scheduled for this Thursday, December 17, at 7 p.m. ET. We’ll discuss this big shift, and where we see the potential for big profits. We’ll also share the companies we expect to be the big winners, so stay tuned!
This event is only days away, so if you haven’t reserved your spot yet I encourage you to do so now.
Note: The Editor hereby discloses that as of the date of this email, the Editor, directly or indirectly, owns the following securities that are the subject of the commentary, analysis, opinions, advice, or recommendations in, or which are otherwise mentioned in, the essay set forth below:
Amazon.com (AMZN), Novavax, Inc. (NVAX), Zoom Video Communications (ZM)