Capital Markets: Observations & Insights

Speed of Innovation Is Accelerating Fundamentals

• Innovations are penetrating U.S. markets at an even faster pace

‒ “Growth” stocks should benefit from innovation while “value” stocks that appear cheap may simply be victims of change

Years from Market Entry to 50% Penetration in the U.S.

The faster speed of innovation may be exacerbating the disparity between growth and value fundamentals

200

160

120

80

40

0

TV - 1936

PC - 1974

VCR - 1965

ATM - 1969

Stove - 1750

Radio - 1897

Roads - 1880

Internet - 1989

Dishwasher - 1924 Air Con. - 1933

Steam Ship - 1810 Railroad - 1830

Hospitals - 1776

Cable TV - 1950

Wash. Mach. - 1904 Air Travel - 1914

Telephone - 1880

Microwave - 1967

Newspaper - 1704

Credit Card - 1950

MP3 Player - 1998

Smartphone - 1996

Social Media - 2004

Electric Power - 1882

Secondary Schools - 1810

Source: Asymco.

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