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productivity shock. It could be particularly
acute in sectors like financial services or energy.FORTUNE: Angela, what’s the greatest—STRANGE: Not risk! [Laughter] I’m too positive.
Venture capital! I think the biggest opportu-
nity is to create companies that will serve the
50% of the U.S. and the more than 2 billion
people worldwide that are under-banked or
unbanked. I often state that the Amazon Web
Services era is coming to financial services.
What that means is, there are several different
infrastructure companies that will partner with
banks and package up the licensing process
and some regulatory work, and all the different
payment-type networks that you need. So if
you want to start a financial company, instead
of spending two years and millions of dollars in
forming tons of partnerships, you can get all of
that as a service and get going.
So what does that do? It will unleash all of
these experiments, some of which will become
large companies of the future.SUBRAMANIAN: Well, I’ll start with the risks. It
feels like the market is getting more fragile,
and what worries me about the S&P 500 and
U.S. large-cap stocks, which are normally the
most liquid stocks in the world, is that a larger
percentage of these companies are owned
by passive investors or by quant funds. So I
worry that if there is some sort of mass exodus
out of equities, the liquidity profile of the
S&P 500 could look very different from what
it has looked like in prior bear markets.
For an opportunity, my favorite sector is
U.S. financials. Financials to me looks like the
new high-quality dividend yield sector. Little
known fact: The share buybacks plus dividend
yield of financials is the highest of all 11 sec-
tors. These companies are putting cash back in
the hands of investors. And leverage ratios are
a shadow of what they were in 2007. The sec-
tor has transformed into a better hedge against
a downturn than it was 10 years ago.FORTUNE: Thank you, Savita. And thanks to the
whole panel.are doing asset allocation will win.
The biggest risk is you. You are your own
biggest risk. Last year, we had a 16% draw-
down in winter. We followed it up with a 20%
rebound. How did you act? What did you do?
Did you call your broker, “Get me out”? If you
did, then recognize that you are the one doing
the things that will have the bigger effect on
your portfolio. It’s not the Fed, it’s not Trump,
it’s you. The minute you get that through your
head, you start becoming a better investor.
FUNK: There are a lot of risks, whether it’s inter-
est rates, geopolitical, trade wars, and there’s
a whole lot out there that we can’t predict and
we can’t control. Frankly, I worry about what I
can control, which is going out there, doing the
research, and finding great companies.
Health care has been a poor performer
in the past 12 months. But some companies
there are very, very strong. So tools, diagnos-
tics companies that are helping with drug
discovery, and the move to this trend from
small molecule chemistry-based drugs to large
molecule. There’s a lot more legs in digital
transformation whether it’s transforming
business-as-usual processes, moving that to
the cloud, and just modernization. And then
finally I’ll mention this trend of resource con-
straints. That’s not going away.
SHARPS: There was a sentiment poll cited re-
cently that had the fewest number of bulls in
the history of the poll. But the opportunity for
me is to lean away from safety and lean into
cyclicality and unexpected earnings growth.
I like industrials in the U.S., names like
Union Pacific or UPS where you can get
double-digit returns. If you want to take on a
little more risk, you could buy United Airlines
or even GE. GE is messy right now. But they’re
stabilizing the balance sheet, and you have a
new CEO, with a proven track record, who can
build on some strong underlying franchises.
In terms of risks I do think that there is an
outcome from the election where political lead-
ership implements some antibusiness policy
that raises cost, that increases the regulatory
burden, and ultimately will lead to a negative
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