Expect a massive lobbying effort by the old order: government intervention represents a real danger that probably isn't reflected in share prices.
All of these industries face a very challenging future in terms of cash flows and ultimately dividends which, in my view, isn't yet fully reflected in share prices.
"The fashion industry has seen success in embracing technology reflected in share price," says Lazarus. "There has been a lot of recognition of the success of Burberry in this area.
In a study of companies in the industrial, technology, and consumer goods sectors, we looked at whether any particular allocation of resources across core, adjacent, and transformational initiatives correlated with significantly better performance as reflected in share price.
Given time, some of them may even be overcome: a new finance law is in the works, and poor treatment of shareholders is beginning to be reflected in share prices.
Markets are efficient, he said, because all relevant information is reflected in share prices at any given moment, meaning there are no predictable movements in prices for smart investors to exploit.
But how great will the impact be and how much is already reflected in share prices?The issue is all the more pressing because profits have been so strong in recent years.
That is reflected in share prices: over the past year, the worst performing sectors, from the bottom up, have been securities firms, shipping, construction, paper, steel, mining, warehousing, airlines, oil companies and banks.
It is hard to see how that scenario can be very bullish for equities either.Perhaps none of this would matter if the bad news was already reflected in share prices.
But Wall Street strategists have tried to build assessments of terrorism into their stock market forecasts, even though there is some disagreement on whether the possibility of terrorism has been adequately reflected in share prices and in the asset allocations of investors.
