Defense spending is already rising, and that will only continue. There will be plenty of room for companies with new weapons systems and new ways to fight the enemy, and investors will get excited about all of them.
Then redesign supply chains. “Friendshoring” is the kind of scary jargon that management consultants come up with on a bad day. Still, there is an element of truth. The one thing that every major manufacturer and retailer has discovered over the past couple of years is that supply chains are too stretched, too vulnerable to disruption, and about to become too expensive.
Logistics hasn’t been trendy or exciting for a long time, for the obvious reason that it’s really boring, but the trend toward buying supplies from nearer and friendlier neighbors will accelerate, and the companies that do will do well.
Finally, energy. Over the past year we have discovered how fragile our energy resources are and how dangerously dependent we are on a handful of hostile countries for supplies.
The demand for energy security will be insatiable. At the same time, the transition to green technologies will be accelerated. Add these two trends and there will be huge demand for companies offering everything from energy storage to high-capacity batteries, as well as alternative fuels ranging from solar to wind to fusion . A Tesla or two will pop up in this space, and they might even be owned by Elon Musk.
Of course, there will also be some crazy fashions. The last bull market included a boom in plant-based meats that now seems inexplicable, not to mention specialty vehicles that briefly flourished at the top before predictably falling.
This one will probably involve a robot doing something or other, not very well. But that’s part of the fun of a rising market: a few bubbles pop up alongside some really impressive new businesses.
It’s true that the global economy may seem in terrible shape right now. Inflation is far from being controlled. We will see interest rates rise.
Energy rationing may have to be imposed across much of Europe, including the UK. There is still much chaos and pain ahead.
Still, markets are always looking ahead. In reality, the new bullfight has already begun, and its big themes and rising stars are about to emerge.