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Rebuilding America: The Coming Opportunity in Infrastructure

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It’s hard for most stakeholders to get excited about replacing an aging bridge.

Chaotic construction can disrupt the flow of traffic for many years, while annoying many of the local residents. Even worse, such projects usually go over budget, ultimately costing millions or even billions in taxpayer dollars.

At the end of the day, you have a new and improved bridge – but was it really worth all the hassle?

Rebuilding America

It’s not always easy to see short-term ROI in replacing aging infrastructure, especially when there are many other pressing challenges for society to tackle.

However, perpetually kicking the can down the road eventually leads to a situation that works in nobody’s favor. If streets, highways, rail, subways, airports, and bridges are all crumbling, the economy could eventually follow suit.

Rebuilding America: The Coming Opportunity in Infrastructure

According to the latest report card by the American Society of Civil Engineers (ASCE), infrastructure in America barely gets a passing grade with a mark of D+.

Here is how things break down, by specific type of infrastructure:

Infrastructure TypeGrade Infrastructure TypeGrade
RailBWastewaterD+
Solid wasteC+RoadsD
BridgesC+AviationD
PortsC+DamsD
EnergyD+Drinking waterD
Hazardous wasteD+Inland waterwaysD
SchoolsD+LeveesD
Public ParksD+TransitD-

The situation is grim – and the organization says that the country needs to spend an extra $2.1 trillion by 2025 to avoid making the situation worse.

Why Investors Should Care

Infrastructure is decidedly unsexy for investors.

However, it does come with some major benefits – in fact, JP Morgan Asset Management says that infrastructure investments tend to have low correlation with other asset classes, helping portfolio diversification. In addition, infrastructure is often protected from inflation, while providing a high yield and stable cash flows.

Here are some ways that regular investors can get access to the infrastructure sector:

  • Materials stocks: Millions of tonnes of cement, concrete, steel, and other materials will be needed
  • Construction and engineering stocks: These are the companies that will get the contracts to rebuild America
  • Heavy machinery manufacturer stocks: Heavy machinery will be needed to get construction jobs done
  • Infrastructure ETFs: Alternatively, there are thematic ETFs that build their funds around infrastructure

How will you try to play the coming infrastructure boom?

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Misc

A Visual Guide to Human Emotion

For years, humans have attempted to categorize and codify human emotion. Here are those attempts, visualized.

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visual guide to human emotions wheel

A Visual Guide to Human Emotion

Despite vast differences in culture around the world, humanity’s DNA is 99.9% similar.

There are few attributes more central and universal to the human experience than our emotions. Of course, the broad spectrum of emotions we’re capable of experiencing can be difficult to articulate. That’s where this brilliant visualization by the Junto Institute comes in.

This circular visualization is the latest in an ongoing attempt to neatly categorize the full range of emotions in a logical way.

A Taxonomy of Human Emotion

Our understanding has come a long way since William James proposed four basic emotions – fear, grief, love, and rage—though these core emotions still form much of the foundation for current frameworks.

The wheel visualization above identifies six root emotions:

  1. Fear
  2. Anger
  3. Sadness
  4. Surprise
  5. Joy
  6. Love

From these six emotions, more nuanced descriptions emerge, such as jealousy as a subset of anger, and awe-struck as a subset of surprise. In total, there are 102 second- and third-order emotions listed on this emotion wheel.

Reinventing the Feeling Wheel

The concept of mapping the range of human emotions on a wheel picked up traction in the 1980s, and has evolved ever since.

One of these original concepts was developed by American psychologist Robert Plutchik, who mapped eight primary emotions—anger, fear, sadness, disgust, surprise, anticipation, trust, and joy. These “high survival value” emotions were believed to be the most useful in keeping our ancient ancestors alive.

plutchik emotion wheel

Another seminal graphic concept was developed by author Dr. Gloria Willcox. This version of the emotions wheel has spawned dozens of similar designs, as people continue to try to improve on the concept.

willcox feelings wheel

Further Exploration

The more we research human emotion, the more nuanced our understanding becomes in terms of how we react to the world around us.

Researchers at UC Berkeley used 2,185 short video clips to elicit emotions from study participants. Study participants rated the videos using 27 dimensions of self-reported emotional experience, and the results were mapped in an incredible interactive visualization. It is interesting to note that some video clips garnered a wide array of responses, while other clips elicit a near unanimous emotional response.

Here are some example videos and the distribution of responses:

reported emotional reaction to video clips

The data visualization clusters these types of videos together, giving us a unique perspective on how people respond to certain types of stimuli.

Much like emotion itself, our desire to understand and classify the world around us is powerful and uniquely human.

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Markets

Mapping the World’s Key Maritime Choke Points

Ocean shipping is the primary mode of international trade. This map identifies maritime choke points that pose a risk to this complex logistic network.

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maritime choke points

Mapping the World’s Key Maritime Choke Points

Maritime transport is an essential part of international trade—approximately 80% of global merchandise is shipped via sea.

Because of its importance, commercial shipping relies on strategic trade routes to move goods efficiently. These waterways are used by thousands of vessels a year—but it’s not always smooth sailing. In fact, there are certain points along these routes that pose a risk to the whole system.

Here’s a look at the world’s most vulnerable maritime bottlenecks—also known as choke points—as identified by GIS.

What’s a Choke Point?

Choke points are strategic, narrow passages that connect two larger areas to one another. When it comes to maritime trade, these are typically straits or canals that see high volumes of traffic because of their optimal location.

Despite their convenience, these vital points pose several risks:

  • Structural risks: As demonstrated in the recent Suez Canal blockage, ships can crash along the shore of a canal if the passage is too narrow, causing traffic jams that can last for days.
  • Geopolitical risks: Because of their high traffic, choke points are particularly vulnerable to blockades or deliberate disruptions during times of political unrest.

The type and degree of risk varies, depending on location. Here’s a look at some of the biggest threats, at eight of the world’s major choke points.

maritime choke point risks

Because of their high risk, alternatives for some of these key routes have been proposed in the past—for instance, in 2013 Nicaraguan Congress approved a $40 billion dollar project proposal to build a canal that was meant to rival the Panama Canal.

As of today, it has yet to materialize.

A Closer Look: Key Maritime Choke Points

Despite their vulnerabilities, these choke points remain critical waterways that facilitate international trade. Below, we dive into a few of the key areas to provide some context on just how important they are to global trade.

The Panama Canal

The Panama Canal is a lock-type canal that provides a shortcut for ships traveling between the Pacific and Atlantic oceans. Ships sailing between the east and west coasts of the U.S. save over 8,000 nautical miles by using the canal—which roughly shortens their trip by 21 days.

In 2019, 252 million long tons of goods were transported through the Panama Canal, which generated over $2.6 billion in tolls.

The Suez Canal

The Suez Canal is an Egyptian waterway that connects Europe to Asia. Without this route, ships would need to sail around Africa, which would add approximately seven days to their trips. In 2019, nearly 19,000 vessels, and 1 billion tons of cargo, traveled through the Suez Canal.

In an effort to mitigate risk, the Egyptian government embarked on a major expansion project for the canal back in 2015. But, given the recent blockage caused by a Taiwanese container ship, it’s clear that the waterway is still vulnerable to obstruction.

The Strait of Malacca

At its smallest point, the Strait of Malacca is approximately 1.5 nautical miles, making it one of the world’s narrowest choke points. Despite its size, it’s one of Asia’s most critical waterways, since it provides a critical connection between China, India, and Southeast Asia. This choke point creates a risky situation for the 130,000 or so ships that visit the Port of Singapore each year.

The area is also known to have problems with piracy—in 2019, there were 30 piracy incidents, according to private information group ReCAAP ISC.

The Strait of Hormuz

Controlled by Iran, the Strait of Hormuz links the Persian Gulf to the Gulf of Oman, ultimately draining into the Arabian Sea. It’s a primary vein for the world’s oil supply, transporting approximately 21 million barrels per day.

Historically, it’s also been a site of regional conflict. For instance, tankers and commercial ships were attacked in that area during the Iran-Iraq war in the 1980s.

The Bab el-Mandeb Strait

The Bab el-Mandeb Strait is another primary waterway for the world’s oil and natural gas. Nestled between Africa and the Middle East, the critical route connects the Mediterranean Sea (via the Suez Canal) to the Indian Ocean.

Like the Strait of Malacca, it’s well known as a high-risk area for pirate attacks. In May 2020, a UK chemical tanker was attacked off the coast of Yemen–the ninth pirate attack in the area that year.

Due to the strategic nature of the region, there is a strong military presence in nearby Djibouti, including China’s first ever foreign military base.

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