- Richard Bernstein Advisors said the “American industrial renaissance'' will be the biggest investment theme of the next decade.
- Over-reliance on foreign trade has intensified over the past decade and has been exacerbated by the pandemic, which has exposed vulnerabilities in global supply chains.
- Bernstein accuses U.S. government policies of undermining the country's independence and that both parties similarly ignore the need to prioritize return on investment.
America's “industrial renaissance” is paramount to economic security, so America's reindustrialization should be a top focus for investors in the coming years, Richard Bernstein Advisors notes this week. I wrote it in
The company said the trend of U.S. companies moving away from dependence on foreign workers and supply chains will dominate investment strategies in the coming decades.
RBA Governor Richard Bernstein said in a note this week: “Markets are already rewarding the beneficiaries of this capital reallocation, but further gains from this important investment thesis are likely to come for many years, if not decades. I expect it to take a year.”
“American reindustrialization, American industrial renaissance, restructuring of the American capital stock, reshoring, nearshoring, friend-shoring, or infrastructure are all synonyms for what are considered the most important long-term investment themes. be.”
Deglobalization is a strong trend that has formed since the pandemic, when disruptions to supply chains and global trade caused runaway inflation in economies around the world. For the United States, that means significant investments in manufacturing infrastructure will be needed in the coming years as the world shifts direction.
“If the United States had sufficient manufacturing capacity to become economically independent, reducing globalization would not be a major issue, but unfortunately this is not the case. We are increasingly dependent on the rest of the world for services,” Bernstein wrote.
“Sustaining large trade deficits while globalization declines is a toxic combination that is now exposing the fundamental structural weaknesses of the U.S. economy.”
Bernstein said U.S. government policies were a major impediment to the country's economic independence, and both major political parties were responsible for losing sight of the need to prioritize domestic investment.
“I predict that both Democrats and Republicans will finally wake up to their misguided tactics. Democrats will likely insist on spending on long-lived assets (there is some evidence this may be starting to happen), while Republicans could move toward a tax system for good deeds (e.g., building a production facility in the U.S. and then receiving tax breaks), rather than comprehensive tax cuts where the benefits could be “spilled” overseas. he said.
Regarding specific investments within the broader theme of reindustrialization, the company said it is focusing on energy and utility infrastructure, transportation, real estate, steel and shipbuilding.
“Despite investor myopia when it comes to more exciting technology-related themes such as artificial intelligence, the market is already recognizing the theme of reindustrialization investing. has outperformed the overall market over the past 10 years.
