Investing With Uncle Sam

Technology forecasting is famously difficult with a rich history of inaaccurate claims, while at the same time, being the most important field to forecast as it is the biggest driver of change in the modern world. There is a lot at stake in the power struggle between governments and competing businesses to be able to predict where they should invest resources to have an edge.

Most organizations can't even get short term forecasts of 1-5 years correct. What happens when we lengthen the forecasting time frame to 20-30 years? Predictions are abysmal, except for one striking study I found where a group of military forecasters got 89% of their predictions correct. This is largely due to the fact that,

It has become common - and a concern for policy makers - for a major defense acquisition program to take on the order of 2 decades from concept development to initial operating capability (Goure 2017).

At first I was surprised, but then I remembered the $700 billion elephant in the room. War is great for developing new technologies.

Follow The Money

"Follow the money" is a phrase that normally refers to unveiling some political corruption or wrongdoing; however, I can make the case that it is also sound investment advice.

In 2019, all U.S. companies combined invested $493 billion in research and development (R&D). This is spread across millions of companies with different visions, strategies, and technological needs. In 2019, the federal government alone spent $142 billion on R&D.

No other organization in the world has the resources and long term development cycle as Uncle Sam. And all the information about his investments are publicly available!

Put down the Wall Street Journal and New York Times paper - your next billion/trillion dollar investment insights are already published. Its just a very...very...very dry read.