Thematic Signals Vol. 7, #1

Entering 2023, confirmation points for our thematic strategies continue

Photo by Moritz Knöringer on Unsplash

Hello and welcome to the 7th volume of Thematic Signals!

2023 has only just started but investors are staring down what is likely to be a challenging December quarter earnings season laced with recession fears, structural changes in the economy, across demographics, technology, and consumer behavior all continue to unfold. While some folks continue to think about the world about us as well as investing in terms of sectors, our view remains that this approach is an outdated strategy.

That means, yes, we continue to see flaws with sector-based investing so much so that, yes, we continue to see it as a dead strategy. Part of that is the shoe-horning of companies into categories that don’t necessarily reflect what is really driving their businesses or to use investor lingo, their “alpha.” Another is that when we see the world through our thematic lens, the world around us continues to generate data points and other points of affirmation for our thematic strategies. While the near-term may be volatile for stocks, following those thematic signposts offers a favorable longer-term outlook.

In addition to reading Mark Abssy’s Real Money columns on ETFs, and if you aren’t you should be, Chris Versace has been named Lead Portfolio Manager for TheStreet’s Action Alerts Plus portfolio, where he expects to use our thematic lens alongside traditional fundamental analysis and other tools.

Now let’s dig into some of these latest signals for our investment themes and strategies…

Photo by Towfiqu barbhuiya on Unsplash

Aging of the Population
Capturing the demographic wave of the aging population and the changing demands it brings with it:

• UN urges nations to prepare for an aging world now

• Is our aging population a time bomb? An opportunity?

• Nursing Shortages: Treating a Chronic Problem Turned Acute

Consumer Inflation Fighters
Companies poised to benefit as consumers stretch the disposable spending dollars they do have:

• US households’ debt rises to $16.5 trillion

• Credit card debt reaches a record high among U.S. consumers

• Egg Prices Have Soared 60% in a Year. Here Is Why They Are So Expensive

Cyber Security & Data Privacy
Securing individuals and organizations against cyber threats and privacy violations:

• 1.7 TB of data stolen from digital intelligence firm Cellebrite leaked online

• Better Phishing, Easy Malicious Implants: How AI Could Change Cyberattacks

• Attackers Are Already Exploiting ChatGPT to Write Malicious Code

• CISA Warns for Flaws Affecting Industrial Control Systems from Major Manufacturers

• IoT security and vulnerabilities that will come along with 5G

Digital Infrastructure & Connectivity
The buildout and upgrading of our Networks, Data Storage Facilities, and Equipment:

• 5G means big changes for large public venues in 2023 and beyond

• Impact Of 5G In Transforming Healthcare Industry

• Wi-Fi 7 is Coming: Here’s What You Need to Know

• How Gen Z consumes media in 5 charts

• Social media video streaming propels mobile data growth

Digital Privacy & Identity
Companies providing the tools and services that verify authorized users and safeguard personal data privacy:

• Identity Thieves Bypassed Experian Security to View Credit Reports

• Norton LifeLock Warns on Password Manager Account Compromises

• TikTok slapped with $5.4 million fine over cookie opt-out feature

• SailPoint Acquires SecZetta to Provide Identity Security for Non-Employee Identities

• 5 reasons why data privacy compliance must take center stage in 2023

• NSA asks Congress to let it get on with that warrantless data harvesting, again

EV Transition
Capturing the transition to EVs and related infrastructure from combustion engine vehicles:

• EVs Made Up 10% of All New Cars Sold Last Year

• Electric Plow Trucks Out in New York

• First Volvo Electric Loader Goes to Landscaper

• New Holland Reveals All-Electric, Autonomous Tractor

Luxury Buying Boom
Tapping into aspirational buying and affluent buyers amid rising global wealth:

• South Koreans are the world’s biggest spenders on luxury goods

• Plenty of Demand for Brick-and-Mortar Luxury Retail

• What the first Lunar New Year after Covid curbs means for luxury

• China’s Newly Relaxed Covid Restrictions Are Causing Luxury Shares to Rise

Sustainable Future of Food
Companies addressing the challenge of providing healthy, affordable, and nutritious food to a growing global population amid dwindling natural resources:

• Impact investing moves from niche to norm in agtech & foodtech

• Innovation in agriculture and food and its vital role in fighting climate change

• CES 2023- John Deere Debuts ExactShot, A Precision Agriculture Machinery

• 4 Sustainable Packaging Predictions for 2023

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Recent Thematic Signals

• Thematic Signals #45 Vol.6 - Chatting Data Privacy & Digital Identity with Bio-Key International Chairman & CEO Michael DePasquale

• Thematic Signals #44 Vol.6 - Ending 2022 on a strong thematic note

• Thematic Signals #43, Vol. 6 - The EV Transition is far bigger than the auto and truck sector

• Thematic Reading #42, Vol. 6 - Even the big holiday shopping weekend couldn't slow the pace of thematic signals

• Thematic Reading #41, Vol. 6 - The Fed going bigger for longer hasn't slowed down thematic data points

• What Doctor Copper Says About EVs and Infrastructure Spending

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Tematica Thematic Indices

• Foxberry Tematica Research Cybersecurity & Data Privacy Index

• Foxberry Tematica Research Sustainable Future of Food Index

• Tematica BITA Cleaner Living Sustainability Screened Index

• Tematica BITA Data Privacy and Digital Identity Index

• Tematica BITA Digital Infrastructure & Connectivity Index

• Tematica BITA Big Spenders & Savers Index 

• Tematica Research Thematic Dividend All-Stars Index