Evolution by Design

Here we share with you three thought-provoking articles. In “Print Me a Stradivarius” and “The Printed World”, the authors explore the development of a whole new manufacturing technology, 3D printing. In “Popular Delusions: Cheap Stocks for an Expensive World”, Dylan Grice from Société Générale takes the reader back to the essence of value investing.

Evolution by Design contains articles 

• Print Me a Stradivarius - how a new manufacturing technology will change the world, The Economist, 10 February 2011.
• The Printed World - three dimensional printing from digital designs will tranform manufactoring and allow more people to start making things, The Economist, 10th February 2011.
• Popular Delusions: Cheap Stocks for an Expensive World, by Dylan Grice from Société Générale.

Preface by Kerr Neilson

The first two articles from The Economist explore a new manufacturing technology – three dimensional printing. 'Additive manufacturing' as it is also known allows for the creation of single items on the same cost scale as it would to produce thousands. The consequences of this are far reaching and could have a profound impact on industry not seen since the industrial revolution; the implication on manufacturing now depending less on economies of scale and more on innovation and imagination.

Most tantalising of all is that the finished product can be made of metals, thereby expanding the number of applications many fold. It is also interesting that an international giant like Hewlett Packard has entered a global distribution agreement with one of the leading manufacturers. Unfortunately for those readers who are on the hunt for investible ideas, the number of listed 3D printing companies is small. There may be peripheral plays where one can find sintering companies or those involved with the software development, but one way or another, the industry is already significantly affecting concepts of manufacture and design.

The third article, provided for the second year by Dylan Grice from Société Générale, is titled 'Cheap stocks for an expensive world'.

Written in January this year, the essence of the article entreats investors to "…understand what things are worth to you, evaluate that valuation against prices, and only buy assets when they reach a suitably attractive discount." In the long run, the significance of value will win out.

It is really a lesson in patience and discipline. With all the daily excitement of markets, it is seductive to believe there is no reward for biding one's time but as Dylan illustrates, with a relatively crude portfolio selection method, the tortoise does outdo the hare by quite a margin.

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