To Our Clients and Friends:

The Monthly Letter covers three topics this month. First, we look at the Federal Reserve and its moves to restore the economy to a state where it can apply traditional monetary policy. Second, the traditional products for the Semiconductor Industry, such as PCs, Laptops, and Smartphones, have matured with some entering declines. With the Cloud expected to have captured 90%+ of all computing loads by 2021, the industry needs new growth drivers. These appear to be emerging in fields as diverse as Artificial Intelligence, Electric Vehicles, and the Internet of Things, which should underpin the industry’s growth for the next decade. Third, the economy is finally in a Late Cycle position. And while inflation should pick up, so should economic growth and productivity as companies move to invest in their businesses for the first time in a decade and the US begins to update and modernize its infrastructure for the first time since 2007. And Fourth, as always, we close with brief comments of interest to our readers.

The Federal Reserve: Back on the Highway

Semiconductors: Its An AI, EV, AV, IOT, VR, Robot, Drone World

Finally, A Late Cycle Economy: Productivity, Investment, and The Coming US Growth Acceleration

 

Pea Soup, That Old Clunker, and The Micro, Mini-Me Outer Space

Finally, we close with brief comments on Pea Soup, That Old Clunker, and Micro Space. First, India has imposed tariffs of 40% on Chick Peas, 30% on Lentils, and 50% on Peas, principally to deter Canadian imports of these basic foodstuffs into the largest market for them. For the Canadian farmer, we see them left making Pea Soup. Second, Porsche has announced that it will employ 3D/Additive Manufacturing to print older parts that would otherwise not be available to keep the classic cars of yesteryear running. For the classic car collector, they finally have a way to keep That Old Clunker running. And third, new companies are launching constellations of micro-satellites into orbit. These satellites, no bigger than a person’s arm, cost a fraction of a conventional satellite, which can run $3 billion or more to develop and launch. Planet Labs just launched a 200 satellite constellation. Major companies, such as Iridium and Gilat, plan to launch their own micro-satellite constellations. With all these shrunken satellites headed to launch, it will soon be the Micro, Mini-Me Outer Space.

 

In Closing

Should you have any questions on how the above issues or the items discussed in our accompanying cover letter impact your family’s financial position or your business’s future as well as the potential actions you could take in response, please do not hesitate to contact us. We welcome the opportunity to discuss this with you.

 

Yours Truly,

Paul L. Sloate                                                  Steve Rodia

Chief Executive Officer                                   President

& Senior Advisor                                            & Senior Advisor