Well, that didn’t take long. Around the time I started talking about deflationary technology in the supply, our friends at Bloomberg issued some alarming numbers.
The Robots are Coming
Don’t say I haven’t warned you, given the supply chain constraints and concerns about the lack of truck drivers dating back to the foundation of the Haven Investment Letter. But a wealth of trends is pulling e-commerce and supply chain automation forward by several years.
Bottlenecks across the ports and shipping lanes, labor shortages, higher input costs, and inflation have companies throwing up their hands. So the means of production becomes a robot that doesn’t take breaks, doesn’t take sick days, deflates costs, and increases margins.
Have a look at the adoption rates from a recent Bloomberg chart.
The numbers are clear that the rate of adoption is picking up. And my concern, my dear friends, is that even I may one day be replaced by a robot offering investment insight and strategies that are personalized to your risk tolerance.
Although, given my health at times, I’m pretty sure I’ll have more metal bones by then.
Is Anything Automation Proof?
A colleague recently asked me if I had any investment ideas that were robot-proof. The question reflected the idea that there would be a trade that could exclusively avoid the technological deflation that our recent discussions posed.
Outside of commodity plays (water remains scarce, as does uranium), one could look at the jobs of the future automation-proof. However, I’m not sure why specific blogs suggest that a historian is an automation-proof job (the internet is full of history and lectures).
One of the ideas that did stand out centered around grocery store-anchored real estate investment trusts (REITs). These high-yield investments typically have a grocery store or two anchored into a shopping mall area and several stores that typically require foot traffic: Think salons, barbershops, and physical rehabilitation clinics.
Investors can check out Regency Centers Corporation (NASDAQ:REG). The company has several hundred open-air shopping centers around the United States. In addition, about 80% of its locations have grocery stores.
In addition, it has many drugstores, drive-thru restaurants, and essential business tenants that have survived and thrived despite the pandemic. The company currently pays about a 3.4% dividend and will continue generating new business and expanding in the quarters ahead. With the pandemic behind us, it’s back to business in the REIT sector.
Of course, I’m still sticking with the robots over the long term and shooting for the moon on the next wave of 5G. Instead, I recommend that you look for the best ways to ride the deflationary trend into retirement.