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Making headlines today is a variety of economic news, including more data which send contradictory messages about the expansion’s resilience. A sample:

Banks Get Some Relief in Volcker-Rule Changes

US regulators are easing some of the regulatory headwinds that have faced US financial institutions since Dodd-Frank’s 2010 passage. The recent focus has been on some of the more complex and onerous Volcker rule requirements—which sought to limit banks’ ability to speculate with their own funds. The rule is based on the assumption that such short-term trades only benefit the banks—not their customers—and should therefore be limited. Further, the rule put the onus squarely on the banks to prove otherwise for every transaction that occurred within a 60-day window. 

The assumption is faulty, though.

The Brexit deadline is looming. Again. While it doesn’t seem inconceivable the can could be kicked yet again, as things currently stand, the UK will leave the EU with or without a deal on October 31. For investors, a clear concern is just how a post-Brexit world will impact companies domiciled in the UK. While it’s nearly impossible to predict with any measure of certainty, the thought experiment is worthwhile.

Consider first this headline—Gold Price Tops $1,500—and then consider this combination of recent events:

Value investing is out of favor. That may be a gross understatement. Growth has outperformed value in 8 of the past 10 years—2011 was a dead heat, and value bested growth in 2016 only to trail by a relative 14% over the next 2 years. According to some measures, growth stocks trade at a nearly 50% premium to their value counterparts. That should be cause for some optimism from the value crowd as such extreme disparities tend to sow the seeds of their own undoing. That said, we saw growth premiums stretch as high as 100% during the dot-com era.

We must admit we don’t spend much time worrying about this. We focus on the economics, not the machinations of the market per se or which way the winds of popularity blow. Economics endure and ultimately prevail.

So in this market of massive growth premiums, what is for sale in the value bin?

To me, sustainability means having the ability to endure. It includes—but goes beyond—environmental, social and governance (ESG) considerations. More broadly, it entails businesses making the right strategic choices that bring continuity to their shareholders, employees, customers and the communities around them. Ultimately, my team invests in emerging markets because as a team of people who were born, educated and have spent large amounts of time in these countries, we want to direct capital to companies that can have a long-term positive impact on emerging markets’ people.

We believe companies manifest and embody sustainability in a variety of ways. 

The printing press, invented in Europe around 1440 CE, was for roughly the next 500 years the primary means of generating and storing data. However, since the advent of computers in the mid-1990s (depending on which model you consider the “first”), we’ve seen an attendant explosion of data, which is only accelerating.

Moore’s Law projected the number of transistors that can fit on an integrated circuit would double roughly every two years—which has proven particularly accurate. Remarkably, the rate at which data are being generated is even faster than Moore’s Law. However, the combination of 3 billion people on the Internet with mobile apps and sensors in an increasing number of smart devices is a recipe for an exponential increase in data which computers will have a hard time keeping up with—not only from a storage standpoint, but also a processing standpoint. The need to find ways to harness, understand and use data will ultimately transform the way we work. 

We’ve gone from smartphones and smart TVs to smart factories, smart health, smart cars and smart homes—connectivity has become deeply ingrained in our society. Low-cost sensors, along with cheaper and faster computing resources, are enabling the connectivity of the real world in a paradigm shift to what is called the Internet of things, or the IoT.

With growing connectivity comes still more data— we’re just scratching the surface on the scale of what data generation will be. Data creation in general is already doubling every two years, and it’s estimated machine data can grow 50 times over the next 5 years.

How can investors capitalize on the data and analytics explosion?

Antero Peak Group portfolio manager Chris Smith discusses the opportunities his team is finding thanks to the rising importance of the Internet of things (IoT). 

Antero Peak Group portfolio manager Chris Smith explains why Artisan Partners is the right place for his team.