Archives For February 2017

America’s Patent Lead

February 22, 2017

We often hear talk about the U.S. falling behind in this or that area.  But one measure of forward progress is innovation, which can be concretely measured by the number of patents filed per country.  On that score, the U.S. is the indisputable leader, and no other country is even close.  This infographic shows that the U.S., at 3.03 million patents filed between 1977 and 2015, is almost 3 times as prolific as the next country, Japan.  In fact, just the state of California outweighs all other countries but Japan!

A subtle change in the internals of the stock market bodes well for active portfolio strategies such as momentum, relative strength, trend-following and even individual stock picking.  The change is a significant drop in correlations among stocks, away from the herd-like “risk on – risk off” moves in which all stocks go the same direction at the same time in the same magnitude.  That herd-like behavior dominated the 2009-2015 period, but during 2016 (and so far in 2017), correlations among stocks have fallen sharply, back to levels that predominated in the 1990-2007 era (a great era for those active strategies).  The lower correlations typically result in a much wider dispersion of returns, with much greater differences between top performers and low performers.  Brian Belski, chief investment strategist at BMO Capital Markets, recently noted that active strategies “will be the key to delivering outperformance in the coming months, as opposed to the more passive strategies that have been mostly dominating the investment landscape the past several years.”

Mind-Blowing Statistic

February 6, 2017

Multi-billionaire Microsoft founder Bill Gates recently wrote on his GatesBlog, “This might be the most mind-blowing fact I learned this year”, followed by a graphic of Chinese cement usage over the last 3 years.  In short, China has used more cement in the last 3 years than the United States has used in the last 100 years!  China’s 6.6 gigatons of cement, consumed in 3 years, dwarfs the U.S.’ 4.5 gigatons, consumed in 100 years.  Here’s the amazing graphic provided by Mr. Gates.