Barron’s Weekend Summary: A look at what lies ahead during the next 100 years in business, science, and investing
* Cover Story: At Barron’s recent centennial roundtable, three investment experts—Karen Karniol-Tambour, co-chief investment officer for sustainability at Bridgewater Associates; Tom Slater, head of US equities and portfolio manager of US equity and long-term global growth funds at Baillie Gifford; and Jerry Yang, founding partner of AME Cloud Ventures and co-founder of Yahoo!—talk about what lies ahead in business, science, and investing in the next 100 years, touching on topics such as synthetic biology, space travel, and cryptocurrencies.
* Tech Trader: Christiano Amom, set to take over as chief executive at QCOM next month, talks with Barron’s about 5G technology, which has given the company a major boost; Among its benefits, says Amom, are that it’s great for video, there will be no need for data caps, it’s paving the way for dramatic changes in videogaming and on-demand computing, and it will be crucial for “connected car” technology.
* Trader: Despite the recent payrolls shocker, the economy still looks set to expand strongly over the next few years, which is all value stocks need to beat growth stocks—a stronger economy is already filtering its way into expectations for earnings growth; +/- Cautious on TSLA: Investors are waiting for the next catalyst—bulls hope for more US electric vehicle purchase incentives, and the company’s driver-assistance feature could be cleared in the Texas crash that generated bad PR; Positive on DE, CTVA, FMC, AGCO, MOS, NTR: With growing demand in China for corn and soy for animal feed, commodity prices can remain elevated for the next couple of years—which means agriculture stocks don’t look all that expensive. Interview: Famed stock picker Larry Puglia of T. Rowe Price will retire this year after 30 years at the company—he spoke with Barron’s about what contributed to his success, his outlook for the markets, and a few favorite stocks, including ISRG, Tencent, BABA, GOOGL, and INTU.
* Profile: Michael Plaiss, co-manager of the Performance Trust Municipal Bond fund, says bonds are “much more mathematical instruments” than stocks, and that by analyzing municipal bonds’ prices, yields, maturities, and credit quality, he can successfully determine what their valuations should be.
* Features: 1) Positive on STX: Hard drives have all but disappeared from consumer products, but new enterprise applications are powering a renaissance for the devices, which is good news for Seagate, the only remaining pure-play bet in the sector—investor skepticism about hard drives makes its shares among the cheapest in the market, even after a rally this year; 2) Copper, a linchpin of the old energy economy, will play a crucial role in the new green one—copper cables remain the most cost-effective means of transmitting electricity from solar and wind sources, and it is a key material in charging stations and electric vehicles—GS analysts say there is “no decarbonization without copper,” which they call “the new oil”; 3) Positive on NKE, TJX, RVLV, AEO: As the coronavirus pandemic recedes in the US, cultural changes are bringing big fashion changes, which is good news for retailers—a Jefferies survey found that 23 percent of US respondents named clothing and accessories as a priority for discretionary spending as the environment normalizes, second only to returning to bars and restaurants.
* European Trader: Positive on Auto Trader Group: The UK-based online car marketplace “has found important avenues of growth that have been overlooked by investors,” including added services such as helping customers get financing, and it may begin to offer lucrative transportation services that move vehicles around the country from seller to buyer.
* Emerging Markets: Vietnam’s Communist Party leaders recently agreed to boost investment in the private sector, to 55 percent from 42 percent of gross domestic product by 2025, and they earmarked $119B for infrastructure during the same period—all good news for investors.
* Commodities: “Growth in the electric-vehicle market has been a blessing for metals like copper and lithium. It has also raised concerns about the long-term outlook for oil demand that some analysts say aren’t justified.”
* Streetwise: Wedbush analyst Seth Basham, who recently downgraded BBY to Neutral from Outperform, predicts that home furnishings will outgrow consumer electronics and that consumer spending will shift to travel and entertainment as the economy reopens, but Best Buy chief Hubert Joly says the company’s mission of enriching lives with technology will keep customers coming back.