Cathie Wood and I are once again on the same page!
Blockchain, robotics, battery storage, all the industries we track here at Bold Profits — and Cathie tracks at ARK Invest — are redefining our future.
We both agree there’s never been a better time to invest in innovation.
Today, I want to share my view and three main points on why NOW is the time to invest for America 2.0.
So, what are you waiting for?
Find out how you can get in on the largest surge of technological innovations EVER:
This week I want to talk about this moment in time. I saw this chart I will put up from our friends at ARK Invest and Cathie Wood that most of you know. If not, check back to a video I made a few weeks ago talking about three people I believe you should be paying attention to who are genius investors of our time.
Cathie Wood is definitively one of them. She runs ARK Invest, which is an asset management company with something like $75 billion under management that is making investments and bets like we are based on where we believe the future is going and, at least for me, it already is.
It’s just that the markets are still a little behind where I am at and where Cathie is at. She put this chart up. I just want to read the text out for this. The title of the chart is what made me think of the topic to make this video. It’s “Why Now?”
ARK’s research shows the global economy is undergoing the largest technological transformation in history. You can see on that chart the various big technological innovations that moved human society forward. You have the steam engine, railways, telephones, cars, electricity.
Then we have gone through a period where we have seen very little truly transformative technical innovation. Now we have this gigantic stack. You will see on the right hand side that Cathie has blockchain technology. Those of you who are in our services know we are all in on blockchain technology.
She has genome sequencing. We call this precision medicine. You know we are all in on that. Robotics is a combination of chips, artificial intelligence (AI) and putting these together in a form where we also mix in mechanical ability. We have some amount of that.
We are going to be adding more as more companies come public. Truthfully, there are very few publically traded companies in this area, which is why we don’t have a significant presence yet in this particular area.
Energy storage. You know, along with Cathie Wood, we have been long-term holders of Tesla. We have a number of stocks in our portfolios in batteries and storage technology. We are all in on that. AI is something we have been talking about for many years now.
Technology Is Really Making An Impact On Our Lives
After seeing this, I wanted to make our case for why now. The first element of this is that we have so many technologies that are at this catalytic point where they can really make a massive impact on our regular life. I went through them earlier so I won’t repeat them.
I will give you an example. I have had a Tesla now for about three-and-a-half years. I got it with the Autopilot software. Truthfully, when I first got it the Autopilot software was in early stage. However, I was amazed at what it could do. We were already beginning to combine data with information so as to be able to create a driving robot.
I drive up to West Virginia where I have a house. On these hills with a 6% grade, this car just hugs the center of the road and never lets go. You can drive — I will not admit how fast I actually let the car go up these hills, but I can say you can drive this car fast.
I should restate that. You can allow Autopilot the robot — actually, I call my car Tessie. I let Tessie drive me 65+ miles per hour, downhill, 6% grade, change lanes and it has no problem. In Tessie, so many innovations capture our time. Autopilot wouldn’t be possible without an extraordinary number of processors and chips.
Then there are computers that integrate all this data to create information so it can make decisions in real time, integrating cameras as well. Then think in terms of what Tesla drives on, which is energy storage using batteries. This is a gigantic leap in terms of an energy source.
So already in just this one thing you can see a lot of different innovations implemented, which include everything from robotics and even Internet of Things (IoT) because at any given moment in time — this is true for every car, so don’t troll me about Tesla tracking me.
Every car today has lots of devices that track where it is in real time. Tesla always knows where it is because there are a number of sensors transmitting themselves and a lot of information being transmitted through the cell phone network to your phone and a network.
In a year or two, you are going to see on your streets and every road, more and more Teslas where people are using self-driving capability. I believe for many people it will be a moment where they will be like, “Whoa, the future is here.” That will cause a mind shift in investment markets as well.
People are going to want to come and buy into these stocks. The essence of any innovation is it creates new ways of doing things. I brought up the example of driving using my Tesla. If you are following me on Twitter — @MampillyGuru — I posted an example of it.
I also have a Tesla Powerwall. It’s changing the way I consume electricity. I use the Powerwall battery storage and my solar panels to power my house about 75% or 80% of the time. That’s going to make a meaningful impact in terms of the utility business. Growth matters.
Could Cryptoconomy Be Your Primary Way Of Finance?
This point was brought about recently where Cathie Wood was on a podcast with Bankless. Bankless is someone I truthfully don’t know. Clearly they have a newsletter and a podcast. They are very forward looking in terms of the banking industry and finance.
You can see from this tweet
Cathie and Bankless agree with something we have been telling you, which is that crypto, DeFi, Ethereum DeFi is coming to gut the banking industry. If you are in our services you know we have had Ethereum (ETH) in our portfolio for several years now.
If you are using another portfolio company, Coinbase, you can stake your ETH and get 4%. In other words, you can get a return that is so much bigger than what you can get from banks. This has been sustained for some period of time. I, myself, have staked my ETH.
I am getting a nice return on my money versus what I would get if I left it in the bank. One of the things Cathie brought up that has been clear to me is that the banks know. I can tell you this because the banks can see all the money coming out of the banking system and going into the cryptoconomy.
It’s coming from them. I know when I go to buy crypto I am taking money out of bank accounts I have at various places. For sure they have access to it and they can see Coinbase, Robinhood and all these new entrants are sucking money from them.
While on an absolute basis it’s not a big amount, it does mean on margin they are growing slower. I can tell you growth matters. When investors sense growth is slowing down, they tend to want to sell those stocks. These new ways of doing things, whether it be Tesla in the mobility industry, energy industry, crypto DeFi, it’s definitely being felt.
We have been telling you this for a long time. If you are in these old world assets, these America 1.0 assets, in my opinion you are playing with fire. While the absolute levels of decline are small, it matters on the margin.
Meaning when you go quarter to quarter or month to month, the amount of deposits sitting on banks like Wells Fargo are declining day after day. While the loss is not great on an absolute level, it does mean they are no longer growing and actively in decline.
Those are my first two points as to why now. Many technologies are at this point where they can make a big impact on regular life. Second, they are creating new ways of doing things that are radically different than the old ways, whether it be driving in a self-driving car or using the cryptoconomy as your primary way of finance and money.
How Does The Market Works And Why Is Now The Time To Get In?
The natural question people will ask is if the potential is so great and all these people are changing, why are the prices still so low? Why is our portfolio not skyrocketing up a billion percent per day? Unfortunately, that’s not the way the markets work.
The way markets work is ultimately prices are an expression of what human beings choose to do with their money. Most of us tend to look at investing through the rearview mirror. We want our stocks to show earnings, dividends, those kinds of things. That’s what we like to see, especially after a decade plus of crises and crashes.
I have gone and looked. Since 2008 we have had pretty much had a crisis or some kind of crash every two years. The vast majority of people are looking for stability, safety, comfort. One thing the America 2.0 opportunity, which is what we call this period right now, is that it will not give you that.
You will have a lot of volatility. You will have to have a tolerance for risk. Your timeframes have to be much greater than a few days, weeks or months. It needs to be in some number of years. People will have a lot of doubt. Sometimes they will come into stocks and exit out.
It will cause a lot of ups and downs. If you are not committed to the idea that we are in a period of transformational change, then you won’t want to deal with the volatility. You will think it’s too risky. You are going to shrink your timeframes down to where you want to see your account going up every day, week or quarter.
The truth is, in innovation — I know this from experience — the ride is volatile but the destination is something so big it is well worthwhile taking on volatility, risk and having long-term timeframes. I know the other question is:
“Paul, I am 75 years old. I can’t take this on. I need something that is going to pay off today.”
The truth is, we may be inappropriate. This kind of investing might be inappropriate for the vast majority of your assets.
However, for at least a small piece I believe if you find the right position size and shrink your exposure down to where you can deal with the volatility and deal with the risk and the timeframes become acceptable to you, this is a critical place where — in my opinion — every single investor should have exposure.
This is where the world is going. It’s accelerating now. The last reasoning for why now is that the prices are cheap. People are still skeptical. People want safety and comfort. They don’t want to take risk. As a result, prices are cheap.
The objections to this is, “Have you seen these stocks? They have gone up 700%.” Yes, however, who could have imagined we would have five, trillion-dollar companies in 2021? I can tell you even in 2010 the idea of a single trillion-dollar company was preposterous.
We are still in the very early innings of these companies transforming the world, changing our economy and changing our lives. While it will be volatile, I believe these companies have a long way to go. They are still cheap. Most people view them with skepticism and as too risk and are not in them.
When other people eventually get to the point where they feel comfortable, they are going to come to bid the stocks higher. Those are going to be gains in your portfolio. Those are the primary reasons I would say now is the moment to get into innovation.
The way I am going to tell you to do that is, of course, to get into Profits Unlimited. This is our flagship newsletter. It’s multi-cap, meaning it goes from small cap to even one micro-cap stock all the way to very large companies that are valued in the hundreds of billions.
If you are interested in that, click on the strong hands that will send you to a three-minute ad asking you to sign up for Profits Unlimited. I will have another video next week. Until then, this is Paul saying bye.
Regards,
Paul Mampilly
Editor,Profits Unlimited
P.S. I asked once, but let me check again. Are you IN on America 2.0?! We’ve done a full overhaul of our model portfolios to line us up with the best players in America 2.0.
We invest for the future. That’s where I believe you’ll get the big gains in the next one to three to five years. This is critical. You need to have exposure. You can see how to get our stock picks for this Fourth Industrial Revolution. Go here now.
