Micron Technology is the 4th largest semiconductor company in the world and a leader in DRAM.
Mohnish Pabarai has been adding to this stock in recent quarters, and it now makes up 78.4% of his U.S. holdings!
A global semiconductor shortage hit the supply chain, could this company be poised to benefit?
Micron makes 71% of its revenue from DRAM and 26% from NAND, which is used in solid state hard drives (SSDs). These have many applications, including computers, mobile, automotive and even Cloud.
The market for 5G cell phones is an especially interesting tailwind for the company, as 5G-enabled phones have 50% higher DRAM and double the NAND content versus 4G phones. Revenue from 5G smartphones is expected to reach $337 billion for the industry by 2025, up from $108 billion in 2021, according to Juniper Research.
Micron has 13 Manufacturing sites, 14 customer labs and 40,000 team members. They have multiple sites internationally in the U.S., Europe, India, Malaysia, Taiwan, Singapore, Japan and China.
As a technology company, Micron must continually innovate to stay ahead. Thus, they are investing heavily into R&D, dedicating 10% of revenues, or approximately $2 billion per year. According to their investor relations presentation, the company’s strategy going forward includes reducing manufacturing costs and increasing density per wafer.
Micron produced strong earnings results in 2021, with revenue jumping 29% to $27 billion. Gross margins also increased to 37% of the revenue, while net income increased by an amazing 118% to $5.9 billion. The firm’s cash position also increased to $8.6 billion. In addition, Micron’s investments are paying off well as the firm’s return on capital is 14.6%.
The Metaverse is set to be the next major technology platform. This would basically be an immersive virtual world where people can live, work and play…basically a real life version of the Matrix, but hopefully without Agents trying to take you out!
The Metaverse is not necessarily a new technology in itself but it will be a combination of many cutting technologies which will intercept in the Metaverse.
These technologies include:
Virtual Reality (VR)
Augmented Reality (AR)
Artificial Intelligence (AR)
Big Data
5G technology
High performance computing (HPC)
Visualisation
Blockchain technology.
and many more!
Inside the Metaverse you will be able to meet friends, visit an NFT (Non Fungible Token) Art Museum, Buy a virtual coffee using cryptocurrency and socialise or even have a business meeting. Thus in this post i’m going to reveal the top 5 stocks to play the Metaverse future.
Personal Background: I completed my University thesis on Augmented Reality and the Metaverse way back in 2014!
Facebook made global headlines when they announced in October to be changing their name to “Meta” which is short for the “Metaverse”. CEO Zuckerberg stated:
“Today we are seen as a social media company, but in our DNA we are a company that builds technology to connect people and the metaverse is the next frontier just like social networking was when we go started”
Zuckerberg then proceeded to show a video clip which showed him convert to an avatar and interact with friends inside what would be the “metaverse” of the future.
Meta owns Oculus the leader in Virtual Reality Goggles which they acquired in 2014, devices such as these can also be used today with platforms such as Facebook Horizons a Virtual world where you can walk around as an Avatar, this is really the seed of what would be a full blown metaverse.
The challenge for Meta now will be to gradually reduce the size and cost of the Oculus VR Headsets in order to reach more people. Zuckerberg stated:
We continually lower the cost of our Oculus Headsets & sell below cost, bringing the price down from $399 to $299 was a strategic move to encourage people to embrace VR
In an Interview withCNETZuckerberg stated the Oculus Quest’s greatest strength against competition was it’s convenient wire-free design and lower cost.
However, Zuckerberg also plans to upgrade the Virtual reality with the Quest Pro. This will include face & eye tracking and will be sensitive enough to make allowances for those with beards etc.
The idea of Quest Pro is to create the ultimate sense of “presence”. This will be at the top end price point as Zuckerberg stated “there’s some ability for it to be a little more expensive.” Meta’s overall goal is to leverage the reach of their social media platforms to increase engagement in Virtual Reality and ultimately the “Metaverse”.
Virtual Reality Headsets still make up a small niche market with just 5.5 million headsets sold last year.
Changing Facebook’s company name to Metaverse was a very bold move by Zuckerberg, as “Meta” still makes over 97% of their revenue from advertising on the social media apps (Facebook & Instagram).
Many critics also believed Zuckerberg was distancing the company from the Whistle-blower report, where an insider released internal studies by Facebook showing
Instagram, negatively affects young users’ mental health. According to one Facebook study leaked by Haugen:
13.5% of U.K. teen girls said Instagram worsens suicidal thoughts.
17% of teen girls say their eating disorders got worse after Instagram use.
This is no surprise to many experts in the space which have highlighted similar issues in past studies.
Thus Facebooks new name change has been likened to an Indian restaurant which gave someone food poisoning and has now reopened as a Greek Restaurant with a new name. Various Memes became abundant after the name change. My Favourite was “FETA”. Credit to the unknown creator.
“Social Media Copies Gambling methods to create psychological cravings”
App Blockers and screen time apps are becoming increasingly popular, a quick review of the google play store (yes I have an android) showed App blocks with over 5 million downloads.
Metrics & Financials
Meta has now split into two reporting segments:
Family of Apps (FoA), ( Facebook, Instagram, Messenger, WhatsApp)
Sales Growth is up 35% year over year and earnings per share is up 19%.
Meta’s revenue from “other” which i’m assuming includes sales of Oculus headsets is there fastest growing segment up 195% on a percentage basis.
User growth rate is slowing
Active User growth is still growing at 6% year over year…but the growth rate is started to slow down. From a massive 10.9% (Q3 2020) which was boosted by lockdown and even prior to that 8.56% user growth was still higher.I believe this trend will continue and is also another reason for Facebooks pivot to Meta.
Facebook daily active users (DAUs) – DAUs were 1.93 billion on average for September 2021, an increase of 6% year-over-year.
Facebook monthly active users (MAUs) – MAUs were 2.91 billion as of September 30, 2021, an increase of 6% year-over-year.
META FACEBOOK USER GROWTH SLOWING. Source: www.motivation2invest.com/Metaverse-stocks
Diving into my advanced valuation, I completed a conservative valuation of Meta assuming the follow:
Revenue Growth Rate decrease from 35% to 25% (2022)
Compounded Growth rate (next 2 to 5 years) 20%
Pretax operating margin increase to 44% up from 42.36%
The company also has $58 Billion in cash so plenty of dry powder read to invest into the metaverse.
VALUATION MODEL FACEBOOK META STOCK ASSUMPTIONS. Download all valuation models for over 65+ stocks on our stock research platform.
META STOCK VALUATION ANALYSIS UNDERVALUED. Download all valuation models for over 65+ stocks on our stock research platform.
According my advanced valuation model, I get a fair value for Meta stock (Formerly Facebook stock) of $537 per share, the price is currently just $335 thus the stock is undervalued.
Great Founder & Fast Follow Strategy
GREAT FOUNDER MARK ZUCKERBERG (12% stake) and MANAGEMENT (Sheryl Sandberg) .
Zuckerberg is the founder of Meta, he is a humble visionary and a strategic genius. Zuck follows a very similar strategy to Microsoft in the late 90’s, “Fast Follow”. When a new competitor product starts to gain traction, Meta (formerly Facebook) try’s to acquire or just copies fast. Examples
INSTAGRAM (ACQUISITION)
Oculus (Acquisition)
Whatsapp (Acquisition)
SNAPCHAT (Copy with Instagram stories) ,
TIK TOK (Copy with Instagram REELS),
YOUTUBE (IGTV).
Clubhouse (Facebook Rooms)
For me the future of Facebook is a bet on the execution skills of Mark Zuckerberg and his ability to continually pivot the company, as he has done previously. If Zuckerberg left (which i don’t think he will) , I would seriously consider selling the stock.
This is not financial advice and there is still the risk of Meta core social media platforms, starting to decline and the chance that the “metaverse” is not widely adopted. In my eyes, a bet on Meta is a bet on the skills of Zuckerberg to pivot once again.
Stock 2. Microsoft (MSFT)
Microsoft also will be a major player in the creation of the Metaverse.
CEO Satya Nadella stated at Microsoft Ignite (Nov 2021):
As the Digital and Physical Worlds come together we are creating an entirely new platform called the Metaverse
The Metaverse enables us to embed computing in the real world and to embed the real world into computing, brining real presence to any digital space.
No Longer just video conferencing with colleagues you can be with them in the same room
The metaverse is here, and it’s not only transforming how we see the world but how we participate in it – from the factory floor to the meeting room. Take a look. pic.twitter.com/h5tsdYMXRD
Microsoft announced, Mesh for Microsoft Teams which will allow a shared immersive experience directly in teams. The beautiful thing about Microsoft’s Metaverse environment is it is directly accessible seamlessly through teams, leveraging the huge (145 million) daily active users. This also removes the friction associated with the platforms.
Inside Mesh Users will be able to interact as a virtual avatar with others and the idea according to Satya Nadella is to replicate the “Water Cooler” style chat.
The Avatars also show real time facial expressions to create that sense of presence. The platform has lots of potential for “Virtual team” gatherings as many companies are going remote.
Microsoft is Number 2 player in Cloud Computing Microsoft Azure, thus has plenty of capacity to run platforms at scale.
MICROSOFT MESH METAVERSE VIRTUAL REALITY. Work place collaboration of the future, Team brainstorming ideas on a whiteboard similar to the real world. Screenshot of Microsoft Mesh (Ignite conference) by. https://www.motivation2invest.com/metaverse-stocks/
Microsoft Business Model
Microsoft’s revenues:
Cloud services (No 2 Player Azure),
Productivity software (Windows 365, Teams)
More Personal Computing ( hardware, software, and gaming systems.) (Xbox, HoloLens etc) .
Microsoft’s cloud solution, brings in more revenues than its Windows operating system and witnessed exponential growth during lockdown! Sales Surged by over 50% year over year. Q3 2021, Cloud revenue up 33% year over year.
Microsoft 365 had 300 million paid seats in Q3 2021 and Microsoft Office, the company’s productivity suite, has over 50 million subscribers.
Operating income was $17.0 billion and increased 31%
$136 Billion in Cash!
MICROSOFT VALUATION MODEL PART 1. FINANCIALS. Download all valuation models for over 65+ stocks on our stock research platform.
Below I have completed conservative estimates of future growth:
20% Revenue Growth for next year (Similar to prior 19%)
Reduce to 15% thereafter
MICROSOFT VALUATION MODEL PART 2. GROWTH ESTIMATES. . Download all valuation models for over 65+ stocks on our stock research platform.
MICROSOFT STOCK VALUATION MODEL PART 3. Stock Overvalued/ . Download all valuation models for over 65+ stocks on our stock research platform.
From the above valuation Microsoft Stock looks to be 26% overvalued.
Stock 3. NVIDA (NVDA)
Nvidia (NVDA) is a market leader in Graphics cards (Gaming), Data centres, Visualisation & Artificial Intelligence. NVIDIA could be the technological backbone behind many future Metaverse platforms. In August 2021, NVIDIA Announced the Omniverse:
“We are thrilled to have launched NVIDIA Omniverse, a simulation platform nearly five years in the making that runs physically realistic virtual worlds and connects to other digital platforms.
We imagine engineers, designers and even autonomous machines connecting to Omniverse to create digital twins and industrial metaverses,”
The company is growing rapid.
Q2 revenue $6.51 billion, up 68% Year over year.
Record Gaming revenue of $3.06 billion, up 85% Year over year.
Record Data Center revenue of $2.37 billion, 35% Year over year.
NVIDIA STOCK FAIRLY VALUED. . Download all valuation models for over 65+ stocks on our stock research platform.
From my valuation Model using conservative growth estimates of 50% next year and 40% for the next 2 to 5 years NVidia Looks fairly valued.
Stock 4. ROBLOX (RBLX)
Roblox is the popular online gaming platform which saw growth accelerate during the lockdown! The platform has over 43.2 million daily active users and its own Virtual currency (Robux). Inside the game players can use their “Robux” to buy items for their Avatar and even purchase tickets to unique experiences.
For example in 2020, there was a live digital concert by Lil Nas X.
Roblox is also building a community of developers to build on top of the platform, many developers are making very good money building for the platform currently.
With 1.3 million developers on track to earn $500 million collectively from their developed apps in 2021.
The stock popped by 42% today after revenue doubled in Q3 2021.
Roblox stock up 42%.
I previously covered Roblox Just after their IPO. Video Below
Stock 5. UNITY (U)
Unity is a Leading game development engine which could be the backbone for the future Metaverse.
Gaming: Pokemon Go, partnerships with UBISOFT (Assassins creed identity mobile game) , League of Legends (Mobile) escape plan, temple run.
Partnerships: Facebook Integration for unity developers to create games. This could be a major catalyst for the stock now Facebook has gone all in on the “Metaverse”
Google partnership with android for Augmented Reality games.
2 Million Monthly users with 15,000 new projects started daily. SEQUOIA CAPITAL INVESTED (Although they would have gotten a much better deal)
Unity Stock. Image credit: Studica.com.
I completed my University thesis on Augmented Reality and the Metaverse way back in 2014, I used the Unity platform for my project.
Zillow is the number one real estate platform in the US. They have over 227 Million Website visits per month which is approximately 80% of the US population (Some may be returning users etc) .
Zillow’s business model is really an advertising platform which offers home sellers and real estate agents the opportunity to list their properties for a fee. However, Zillow also has other aspects of the business such as Mortgages, Home Loans and until recently a home buying business.
Number of Unique Monthly Visits ZIllow, Created by Author at Motivation 2 Invest
Watch Full Video with Analysis below
Why has Zillow Exited the Home Buying Business?
Last year I noted on the channel Motivation 2 invest, Zillow was taking a risk with the “ibuying” business as it was low margin and hard to scale. It seems my prediction was correct.
Zillow CEO & Co Founder (Rich Barton) stated in their Q3 Earnings Call: “We couldn’t forecast future home prices, with our models” . He also noted a more subtle point that offering sellers low offers was potentially damaging the brand and only 10% of Zillow’s offers were actually accepted.
He also noted the inherent risk in this type of business which was unnecessary for Zillow which generally runs an “asset light business” model, website etc. The CEO noted they “took a big swing” and “failed fast”
11/01/2019 CNN Business Risk Takers: Zillow 347 Ardmore Court NW, Atlanta, GA ph: E. M. Pio Roda / CNN
They now have to lay off 25% of workforce.
Zillow will also report heavy Inventory losses to reported in Q4 and charges reported in first half of 2022. Totalling approximately $500 Million. The company still has around 7,000 homes to sell, but the CEO stated “this is not a fire sale and we are in no rush to sell the homes…they are appreciating assets” ….”But we are in a rush to get them renovated and back on the market”
They are expected to sell most homes by Q2 2022.
CFO Expects: “POSITIVE EARNINGS & POSITIVE CASH FLOW COMPANY AFTER WIND DOWN”
The Co Founder and CEO Rich Barton, founded the company 16 years ago. He is also the founder of Expedia & Glassdoor and is an experienced veteran, with great connections (on the board of Netflix). He is also the Largest individual Shareholder (Large insider holding/skin in the game). On a personal note, I admire their CEO’s Honesty and straight talking.
An investing strategy I have adopted recently is that of “Investing with great founders” . A Legendary Investor Nick Sleep has highlighted this in his Letters, Full Summary here: Nick Sleeps Letters
Is Zillow Stock Undervalued?
Advanced Valuation Model, Embedded Google Sheet. Scroll Down to see the financials. Click the page “Valuation Output” then scroll down to the orange/yellow section for the value per share.
Advanced Valuation Model Zillow stock
Advanced Valuation Model Zillow stock
Advanced Valuation Model Zillow stock
Advanced Valuation Model Zillow stock
Advanced Valuation Model Zillow stock
Zillow is facing headwinds from the exit of it’s home buying business, which is expected to last at least until the middle of 2022. However, they have made great progress moving this forward with over half of the homes having been sold or under contract to sell. On balance I believe this is the right decision by the CEO Rich Barton. Zillow is exiting a capital heavy business and can now focus more on their asset light online business model. Zillow’s core business has a high EBITDA margin (40%+) and thus focusing on improving their platform through technology seems like the best strategy. There is still a few questions which remain on exactly how Zillow will proceed with “Zillow 2.0” and capture a larger percentage of the property transaction market. There is also the risk the write down will take longer than expected.
However, from my Advanced valuation Model the Value of the stock is $69/share and thus is approximately 12% undervalued. Thus this could be a great long term investing opportunity, if you can handle the short term choppiness expected.
Bill Ackman is a legendary activist investor & billionaire, he is known for making big bets against the consensus & being right!
His strategy was originally influenced by Warren Buffett & he considers himself value investor at heart, but it’s clear his strategy is much bolder & more fitting to an activist investor.
Investing Strategy: Activist Investor, Short Seller, Contrarian, Value Investor
What is Bill Ackman doing now?
Inflation Trade:
In October 2021 Ackman has spoken of Inflation fears and is urging the fed to raise interest rates “as soon as possible.” On Twitter Ackman stated
“as we have previously disclosed, we have put our money where our mouth is, in hedging our exposure to an upward move in rates, as we believe that a rise in rates could negatively impact our long-only equity portfolio.”
As we have previously disclosed, we have put our money where our mouth is in hedging our exposure to an upward move in rates, as we believe that a rise in rates could negatively impact our long-only equity portfolio.
Ackman even gave a presentation to the New York Fed, urging them to raise rates. Of course Ackman will Benefit from the hedges he has in place. Most likely shorting Bonds and buying assets such as Gold and Gold Futures.
I gave a presentation https://t.co/U9C5OoiDq3 to the Federal Reserve Bank of New York last week to share our views on inflation and Fed policy. The bottom line: we think the Fed should taper immediately and begin raising rates as soon as possible.
Bill Ackman recently revealed in an interview with interactive investor (Oct 25th 2021) he has purchased “Swaptions” worth $100 Million and has made a 3x return already! In addition, Ackman has the potential to turn the bet into “Billions” if interest rates rise substantially, he stated in the interview.
Below we have unpacked Bill Ackmans presentation and given a brief overview of the main points.
5 Reasons Bill Ackman Thinks Interest Rates will Rise:
1. Rising Inflation
Latest Inflation Numbers are approximately 5% , which is above the Federal reserves target of 2%. The Fed states this is “Transitory” as the economy restarts, many investors are sceptical.
An extract from Ackman’s presentation shows mid to high single digit inflation. From 7.2% for the CPI (Consumer price index) ,which is basically a basket of common goods purchased by people (food, groceries etc) to 6.2% for Wage inflation. Fed Target is 2% overall.
Inflation High. Source: Bureau of Labor Statistics (1) Represents the month over month change in the seasonally adjusted, average hourly earnings of all nonfarm payroll employees as published in the BLS’ Employment Situation Report
Ackman pointed out that total employment is only five million jobs lower today than its pre-pandemic level in February 2020.
Total employment is only five million jobs lower today than its pre-pandemic level in February 2020. Source: Bureau of Labor Statistics (1) U-6 unemployment rate represents total unemployed, plus all persons marginally attached to the labor force, plus total employed part time for economic reasons, as a percent of the civilian labor force plus all persons marginally attached to the labor force
4. Historic Context
Historically, when unemployment is low and inflation is high, the Fed has increased it’s Fed Funds Rate.
This is the amount of interest the federal reserve charges to banks for overnight borrowing. This often acts as a signal to the market and overall interest rates.
Bill Ackman noted in his presentation, that we now have low unemployment and higher inflation yet the federal reserve has still not increased interest rates. They are keeping them artificially low as they believe inflation is “Transitory” which means temporary.
The Bank of England has recently changed it’s story between July 2021 to October 2021. In July 2021 They stated “It is important to not to overreact to temporarily strong growth and inflation”. However, in October 17th 2021 they stated “The Energy story means [the period of high inflation] will last longer”.
How to play this Inflation Trade?
Bill Ackman recently revealed in an interview with interactive investor (Oct 25th 2021) he has purchased “Swaptions” worth $100 Million and has made a 3x return already! In addition, Ackman has the potential to turn the bet into “Billions” if interest rates rise substantially, he stated in the interview.
Historically during times of inflation, investors have invested into assets such as Gold, Gold Futures and Real Estate. Rising inflation will also impact the value of Treasury bills and bonds. As if as if a 10 year Treasury Bill is paying 1.5% interest and inflation is at 5%. The Investor is actually losing money by investing into these bonds!
Thus short selling fixed income such as government and corporate bonds could also produce high returns. Of course this is not financial advice and the risk is inflation doesn’t continue to rise and is “transitory” as the fed believed.
Former Wall Street Trader Interview | Inflation Trade revealed
Cathie Wood is the founder & chief investment officer at Ark invest. This is an investment firm which specialises in investing into disruptive innovation. With a series of active ETF’s focusing on Genomics, Robotics and even space exploration.
She is widely regarded as the biggest Tesla bull and was known for publicly stating what seemed to be outlandish price targets for Tesla of $4000+ , back when Tesla stock was trading at just a couple of hundred dollars.
Cathie Wood Quotes Ark Invest Tesla Credit: www.Motivation2invest.com/Cathie-Wood
In one CNBC interview in Early 2020 before Tesla stocks monstrous bull run of over 800%, Cathie wood stated many times “Tesla is ready for prime time” much to the look of amusement from CNBC’s commentators.
Cathie Wood had the last laugh with her active ETF’s returning over 100% in 2020.
In 2021 her ETF’s have had a rocky start thanks to rising interest rates which have impacted growth stocks more than others in the industry. Only time will tell if Cathie Wood can regain her crown as the queen of investing.
What is Cathie Wood’s Investing Strategy?
Cathie Wood of Ark Invest is a Growth stock investor who invests into companies which offer elements of disruptive innovation. She is not afraid of making bold bet’s against the consensus (Tesla 2019) and thus can be called a contrarian.
Cathie Wood believes Wrights Law (cost declines as a function of production) is a major predictor of future technology success from decreasing costs for EV Batteries to gene sequencing becoming more affordable.
Fun Fact: Some people refer to Cathie Wood as “Katie Wood” assuming Katie is short for Catherine. But Cathie tends to not use that name.
Investing Strategy: Growth Stocks , Technology, Medium Term, Daily Trades, Small Cap, Medium Cap.
1. My Highest Conviction stocks are…
Cathie Wood Quotes Ark Invest Tesla Credit: www.Motivation2invest.com/Cathie-Wood
“My Highest conviction stocks are Tesla, Square & Palantir”. Tesla is no surprise, but Square & Palantir are also great growth stocks with lots of potential. I previously covered stocks such as Square & Palantir on my channel Motivation2invest, full valuation models with buy points can be found here.
2. Tesla Price Target for 2025 is $4000
Cathie Wood Quotes Ark Invest Tesla Credit: www.Motivation2invest.com/Cathie-Wood
Cathie Wood Stated her bullish price target for Tesla stock is $4000 by 2025.
“Wrights Law forecasts cost declines in EV’s, Robotics and genomics.”
What is Wrights Law?
Developed by Theodore Wright in 1936, Wright’s Law is a framework for forecasting cost declines as a function of cumulative production.
It states that “for every cumulative doubling of units produced, costs will fall by a constant percentage.”
This is a very similar concept the economics of scale and that mass production & technology innovation results in cost declines. This has been true for Batteries, Solar Panels, Genomic sequencing and more.
Ark Invest even found “A price forecast based on Wright’s Law was 40% more accurate than one based on Moore’s Law.” (From the decade to 2015.
4. “Robot Grocery Delivery could cost just 40 cent per trip”
Cathie Wood Quotes Ark Invest Tesla Credit: www.Motivation2invest.com/Cathie-Wood
Following on from the previously mentioned Wrights Law, “cost declines as production increases”. Cathie Wood has also forecasted similar cost declines with robot grocery delivery.
ARK Invest expects industrial robots will cost less than $11,000 per unit, this is less than Boston Consulting Group’s (BCG’s) expectation of roughly $24,000, by 2025
5. “Genomic Sequencing costs are dropping 40% per year”
Following on from the previously mentioned Wrights Law, “cost declines as production increases”. Cathie Wood has also forecasted similar cost declines with Genome Sequencing following on from previous declines.
Ark Invest stated:
“DNA sequencing is following a cost curve decline that is steeper than microprocessors enjoyed during the past 40 to 50 years”.
“Since 2001 the cost to sequence one whole human genome has dropped from $100 million to $1,000, or more than 50% per year, an decline unrivalled by any other general purpose technology platform in history.”
cost declines of DNA Sequencing. Ark Invest. Source: https://ark-invest.com/articles/analyst-research/illumina/
Although inspiring, Ironically Ark invest sold of it’s very bullish Illumina stock (a leading company in the genomics industry) as they weren’t keeping up with the cost declines necessary. However, there are many other players in this arena.
“Tesla is a leader in Batteries, Robotics, Solar & Autonomous vehicles”. Tesla is not only an Electric Vehicle company but a technology company which has entered many industries aggressively.
Wall Street Analysts tore down 7 competing Batteries and they found Tesla’s to the be the lowest cost with highest energy density.
“Tesla will likely remain the cost and technology benchmark for several more years, and Volkswagen is the fastest follower on a global scale. Its €33bn committed EV investments of over a 5-year period are still unmatched.”
In terms of Robotics, Tesla shocked the world when they announced to be working on a Humanoid style Robot. A figure came out which many thought was a prototype…before the dancing started. Watch the supercut of the video below.
Tesla Robot Revealed | TESLA AI DAY 2021 | 6 Minute Supercut Analysis
7. Autonomous Taxi’s will revolutionise the auto industry
Cathie Wood Quotes Ark Invest Tesla Credit: www.Motivation2invest.com/Cathie-Wood
“Autonomous Taxi’s will revolutionise the auto industry” this area could really be a game changer and although Tesla hasn’t fully mastered the technology yet the potential is huge.
Tesla vehicles are capturing a vast amount of data daily, all this feeds into their Artificial intelligence & neural net’s system.
Thus once the accuracy of their system is close to perfect they can do an over the air software update to vehicles which will make their entire fleet self driving at scale. No other company has this ability to scale right now.
However, in terms of pure technology googles Waymo technology is actually fully functional as a self driving vehicle in Arizona right now! They use LIDAR which Elon Musk rejected as “too expensive” will he regret this.
More details on this video below, Top 3 Self Driving Car Stocks:
8. Bitcoin is the reserve currency of the digital ecosystem
Cathie Wood called Bitcoin the Reserve currency of the digital ecosystem and said investors see it as a “flight to safety” . Similar to the way the US dollar is the reserve currency of the world and gold can often be considered a hedge.
Correction from the quote above, in more bullish estimates such as at the SALT Conference 2021, Cathie Believes “Bitcoin will to soar to $500,000 in five years time”.
This is an incredibly high price target and is effectively a 10x from it’s current price of around $50,000. Cathie Wood believes this is driven by conservative estimates of supply and demand, Wood stated:
“If we’re right and companies continue to diversify their cash into something like Bitcoin, and institutional investors start allocating 5% of their funds in Bitcoin […] we believe the price will be ten-fold what it is today. Instead of $45,000, over $500,000.”
10. “Only 4 Cryptocurrencies will survive the next crash”
This quote was from a conference a few years back when Cathie Wood stated only 4 cryptocurrencies will survive the next crash, Bitcoin, Ethereum etc. She also stated “most of the 2000+ crypto assets today will be worthless”
For those of you who don’t know, the “FANG” or “FAANG” stocks are Wall Street nicknames for the best performing tech giants of our decade. These include: Facebook, Amazon, Apple, Netflix, Google.
However, Cathie Wood believes the next “FANG stocks are being birthed in the genomic revolution”. This is thanks to cost declines in gene sequencing mentioned previously driven by Wrights law.
“We wanted flying cars, instead we got 140 characters,”said Peter Thiel in 2013. However, according to a research report by Ark Invest, EVTOL (Electric Vertical Take-Off, Landing) vehicles could be with us soon. Many startups are working on this concept and have bullish projections to roll out vehicles by 2025. These include:
Joby Aviation (JOBY) – Wen’t public as a SPAC backed by LinkedIn founder Reid Hoffman, now owns UBER Elevate.
“We want our companies to invest aggressively, we don’t want our profits now”. Companies which invest into innovation and take strategic bets long term tend to product greater returns for investors.
The most notable is Amazon which has a culture of “experimentation” and taking “lots of small bets”. Legendary investor Nick Sleep held onto this stock for many years & was rewarded with fantastic returns.
14. “The Strongest Bull Markets are built on walls of worry”
From the Financial Crisis in 2008 to the 2020 crash, “walls of worry” do often lead to the strongest bull markets.
Square is a fantastic company founded by the Legendary Jack Dorsey (who is also the co founder of Twitter).
Square started by selling innovative devices which allowed small businesses to accept payments through their phone. However, they have now expanded to other areas including Cryptocurrency and their popular cash app.
I previously analysed square stock & completed an advanced valuation model before the stock ran up huge. Full Disclosure I did invest after the video and so did many members of our VIP community, You download my advanced valuation models & access our group by clicking the link here
