Granite Wealth Management

Yardeni’s Roaring 2020s, Part I: Why I’m Betting on a Tech-Driven Boom

Clients know that I have been quite bullish since late 2022 but I’m also incredibly optimistic about the economic potential of the coming years. Ed Yardeni, a Wall Street veteran and president of Yardeni Research, has been vocal about his belief that the 2020s will be a period of immense technological advancement, leading to strong economic growth and a booming stock market. I’m right there with him.

Yardeni’s thesis, which he calls the “Roaring 2020s,” posits that we’re on the cusp of a productivity boom mirroring the roaring 1920s. Just like the last century’s boom was fueled by innovations like the automobile and electricity, this decade’s growth will be driven by the rise of artificial intelligence (AI) and robotics.

Now, I know what you might be thinking: “AI and robots are going to steal our jobs!” But I see it differently. These technologies aren’t about replacing humans; they’re about augmenting our capabilities and unlocking new levels of efficiency and productivity.

Think about it: AI can analyze massive datasets in seconds, identifying patterns and insights that would take humans years to uncover. This has huge implications for fields like healthcare, where AI can help diagnose diseases earlier and more accurately, and pharmaceuticals, where it can accelerate drug discovery and development.

Robotics, on the other hand, can automate repetitive and dangerous tasks, freeing up human workers to focus on more complex and creative endeavors. This is already happening in manufacturing, where robots are increasing assembly line efficiency and improving worker safety. An extraordinary operational organization like Amazon is cutting edge, but is by no means alone nor to be considered an outlier anymore.

But the impact of AI and robotics goes far beyond these sectors. In defense, AI-powered drones and autonomous vehicles can enhance situational awareness and reduce risk to human soldiers. Indeed, forward-thinking companies like Anduril will employ these technologies in ways that will make warfighting almost unrecognizable in just 5 or 10 years.

In software development, AI can assist in coding, debugging, and testing, leading to faster and more reliable software releases.

And let’s not forget the indirect impact on productivity. AI-powered tools can streamline business processes, automate customer service interactions and personalize marketing campaigns, leading to increased efficiency and customer satisfaction across industries.

This surge in productivity won’t just benefit businesses; it will also translate into economic growth, lower inflation and rising real wages for workers. As businesses become more efficient, they can produce more goods and services at lower costs, leading to lower prices for consumers. And as productivity increases, businesses can afford to pay their employees higher wages without sacrificing profitability.

These latest points may seem like pie-in-the-sky, but keep in mind that the inflation we recently endured was driven by policies in the aftermath of a global health crisis unlike anything we’ve ever seen – or are likely to see again in our lifetimes.

And yes, inflation has remained a bit sticky and market participants are unsure what to make of the new president’s threatened tariffs, which some argue could bring more inflation.

But these pressures will pass, and productivity booms are inflation killers – just think of the first internet boom and the 1990’s, a period of well-contained inflation.

Of course, no economic boom is without its challenges. Policymakers will address concerns about job displacement and will try to craft laws which ensure that the benefits of these technologies are shared broadly. But I believe that with careful planning and investment in education and training, we can navigate these challenges and unlock the full potential of the Roaring 2020s.

The future is bright, and I’m excited to see what technological marvels this decade will bring. Just like the roaring 1920s, the 2020s should continue to be a period of unprecedented innovation and prosperity. And I, for one, intend to ride the wave.

*This post is the first in what will be a 5-part series.