Nothing signifies integrity and probity like a halo. Using it with regard to companies might sound odd, yet the Halo narrative grabbed some headlines this year as investors struggled to assess which companies would be ravaged by the disruptive forces unleashed by AI.
Thus was born the Heavy Assets, Low Obsolescence theme: owning those stocks which have business models difficult for any AI model to replicate. These can be capital-intensive electric utilities, miners or oil companies, groups such as Italy’s Enel, or Rio Tinto and Shell in the UK.
The thesis makes some sense. Halo businesses combine substantial physical capital with long-lived economic relevance. That means they should have sustainable business models in a world where “AI bots” could not just replace people but also any software programming and intellectual property previously thought to complement this new transitional technology.