September 14th, 2022 | 12:23 CEST
End of capitalism? Here comes growth! Mercedes-Benz, BrainChip, Amazon
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At home in Southern Germany, the passionate stock exchange expert has been accompanying the capital markets for about twenty years. With a soft spot for smaller companies, he is constantly on the lookout for exciting investment stories.
The end of capitalism? So argues the exciting book!
Last week, when Ulrike Herrmann taught startup guru Frank Thelen the basics of economics and regretted that someone with so little expertise runs Thelen's companies, viewers stopped what they were doing. There is rarely so much entertainment on a public talk show! The author argues in a similarly bold manner in her book. On the one hand, she praises capitalism and emphasizes the advantages it has brought in recent decades. But capitalism cannot continue to exist if it cannot grow itself. The argumentation: In the wake of the climate crisis, scarce goods restrict growth and make downsizing necessary. This should run like the British wartime economy during the Second World War. At that time, the state rationed basic and raw materials. Citizens could choose between certain luxury goods through a kind of points system. Those who wanted more had to pay the price.
Are we also threatened by such a planned economy? According to Herrmann, the world would have to choose between a planned shrinkage now and a crisis-like shrinkage later. The author denies that innovative solutions, such as modern chips or electricity storage systems, will eventually solve the problem. But there are good arguments! Moore's Law states that the complexity of integrated circuits regularly doubles with minimum component costs. Depending on the source, there is talk of 12, 18 or 24 months. Since, according to Moore's Law, computer chips and related technology are improving, so the world would do well not to pull the plug now as a precaution, as Ulrike Herrmann urges. In general, it remains unclear in the book how the state economy should be organized and how the world should shrink back to health. Not to mention the fact that state-planned economies are not exactly efficient as a rule.
Chip industry as a beacon of hope - BrainChip combines sustainability and AI
Mercedes-Benz Group, among others, shows that progress is moving forward in leaps and bounds. Just a few years ago, the carmaker was considered an inert dinosaur or a lame duck - the Swabians only had combustion engines on offer. Within a few years, Mercedes-Benz has set the lights to "green" and soon wants to be even more efficient electrically on the road thanks to new battery technology. AI is also playing an increasingly important role in the cars of the future. A few months ago, it became known that Mercedes was collaborating with BrainChip in addition to NVIDIA. The latter Company's chips have ensured, among other things, that power consumption around voice control in modern Mercedes cars has dropped significantly. In the future, even more chips will be installed. The consulting firm McKinsey sees a potential of 15% annually in the area of chips for the automotive industry.
Daimler and Amazon: Good progress, but risks outweigh benefits
AI also has great potential in logistics. When giant companies like Amazon make their processes better and better, this ultimately also has an effect on energy consumption. If, for example, courier trips are better planned or more synergy effects are created thanks to the analysis of data, productivity and climate protection increase in equal measure. According to Amazon, the increased use of AI and robots is creating more human jobs - just more skilled ones. However, Amazon's stock is hardly benefiting from this development. Last year, concerns about a recession dominated and determined share prices. When it comes to reconciling growth and sustainability, Amazon remains a crucial company. On the one hand, Amazon is big enough to make a difference; on the other, the giga-corporation is already well positioned for the future.
The development of the Mercedes-Benz share over the past year also resembled a zero-sum game. However, if the value rises above the level of EUR 61, the chart picture could brighten. And AI chip pioneer BrainChip? The Company, whose semiconductors resemble the human brain and score points for low power consumption, has posted a healthy return of more than 100% over the past year. Nevertheless, the stock is still far from its highs. Since the value neither suffers directly from the current recession fear nor is strongly dependent on energy prices, but at the same time stands for necessary solutions, speculatively thinking investors should have BrainChip on their radar. The book by Ulrike Herrmann, which is critical of capitalism, should not be ignored entirely, even by convinced stock market investors. It provides important food for thought: If we want to achieve growth and sustainability at the same time, we cannot do it without innovations. It will be important to advance the right technology in the coming months and years. Chips are the key to many innovations.
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