Tech explosion could see ‘incomprehensively rapid’ stock gains
Thursday, 8 March 2018
By Bernd Struben
- A $36.8 billion tech arms race
- Unlock the Secret of T.I.M.E.D. Stocks — Important Reminder
‘Technological progress will become incomprehensively rapid and complicated.’
John von Neumann
Today, we open with a nod to the power of technology.
It has the power to shape our lives…for the better and for the worse.
It also has the power to drive companies and their share prices to new heights…or fall to new lows.
The quote up top comes from Hungarian born John von Neumann. Born in 1903, he went on to become a mathematics professor at Princeton in the US, among other things.
His lifetime achievements are far too long — and complicated — to list here. For the purposes of today’s Port Phillip Insider, we’ll stick to this extract from Singularity Symposium:
‘John designed the so called von Neumann architecture which is in essence the core design behind all contemporary digital computers. His last book, published after his (1957) death, was called The Computer and the Brain.’
Von Neumann theorised that the pace of technological innovation would continue to speed up.
In 1965, eight years after his death, Gordon Moore confirmed von Neumann’s predictions.
Moore, the cofounder of Intel, reported that the number of transistors per square inch on integrated circuit boards had doubled every year since they were first introduced.
Moore’s Law famously predicts that this pace will continue. Meaning technology will advance exponentially.
Have a look at the graph below. It’s a great snapshot of just how quickly technology has progressed over the past 120 years:
Source: Steve Jurvetson
Click to enlarge
As you can see, the advancements since 2005 alone are coming fast and furiously.
The key for investors, then, is getting a jump on these advances. That means knowing — or accurately predicting — the next big moves in the tech world. And the players likely to lead those moves.
No one is more aware of the power technology holds to make or break a company’s fortunes than our own tech guru, Sam Volkering. Over at his premium advisory service, Revolutionary Tech Investor, Sam combines his love of all things tech with his uncanny stock picking ability.
As a sign that the pace of technological advances isn’t about to slow down, the Australian team working on creating a functional quantum computer just announced a ‘significant milestone’.
More, after the markets…
Investors continue to teeter-totter between cautious optimism and nascent fear. With the latest news from the White House swinging them back towards cautious optimism.
That news is that Trump may offer country exemptions to his aluminium and steel tariffs on a case by case basis. Canada and Mexico may gain an exemption. If so, I’d expect Australia to get a pass as well.
That’s all well and fine. Particularly if you’re holding shares in the likes of BlueScope Steel Limited [ASX:BSL], Australia’s largest steel producer.
But the bigger picture still indicates that global trade ructions will only heat up.
The EU may not gain an exemption to the latest US tariffs. And EU politicians are already debating implementing tariffs on US goods like Harley-Davidson, Levi’s and bourbon.
Then there’s China. The US trade deficit has hit its highest level since 2009, and the imbalance with China is growing rapidly.
Tensions between the world’s number one and number two economies are growing.
From The Australian Financial Review:
‘The Trump administration is considering clamping down on Chinese investments in the US and imposing tariffs on a broad range of its imports to punish Beijing for its alleged theft of intellectual property…’
And so, the game continues. The teeter-tottering is back in the cautiously optimistic zone…for now.
Overnight, the Dow Jones Industrial Average closed down 82.76 points, or 0.33%.
The S&P 500 lost 1.32 points, or 0.05%.
In Europe, the Euro Stoxx 50 index finished up 19.50 points, or 0.58%. Meanwhile, the FTSE 100 climbed 0.16%, and Germany’s DAX rose 131.49 points, or 1.09%.
In Asian markets, Japan’s Nikkei 225 is up 137.48 points, or 0.65%. China’s CSI 300 is up 0.64%.
In Australia, the S&P/ASX 200 is up 32.81 points, or 0.56%.
On the commodities markets, West Texas Intermediate crude oil is US$61.31 per barrel. Brent crude is US$64.34 per barrel.
Gold is trading for US$1,325.58 (AU$1,693.38) per troy ounce. Silver is US$16.51 (AU$21.09) per troy ounce.
Bitcoin took a tumble over the past 24 hours, down more than US$1,000. A pronouncement from the US Securities and Exchange Commission (SEC) is likely to blame. The SEC said online cryptocurrency trading platforms should register with the agency as exchanges.
One bitcoin is worth US$9,658.82.
The Aussie dollar is worth 78.28 US cents.
A $36.8 billion tech arms race
My understanding of quantum computers is about as extensive as my understanding of the sun.
I can tell you the sun is hot. Really hot.
And I can tell you that quantum computers — once they actually work — will be fast. Really fast.
I can also tell you that Australia is battling to lead the way to make quantum computers a reality. And a team of scientists, led by University of NSW professor Michelle Simmons, have just taken another big step forward.
As The Australian Financial Review notes, the Aussie team:
‘…demonstrated that the single-atom quantum bits, or “qubits”, needed to build the UNSW’s quantum computer can actually communicate with each other, which was theorised but never proved until now…
‘A quantum computer made up of just 30 logical qubits would be more powerful than a classical computer built with 20 billion bits of processing power, provided those qubits were all entangled with each other, Professor Simmons said at the Financial Review Business Summit.
‘By way of comparison, most PCs and phones have processors in them that use just 64 bits to do their computations.
‘A computer made up of just 300 entangled logical qubits would be more powerful than the combined power of all the classical computers in the world, she said.’
If you find that hard to fathom — or hard to believe — you’re not alone.
But then you have to remember that barely 10 years ago mobile phones were, well, just phones. Now they’re tiny, powerful computers, linked to fleets of satellites.
All of this is leading — possibly sooner than later — to smart machines. Or artificial intelligence (AI).
Companies are fighting to bring the first AI to market, even if only semi-sentient. This could indeed unleash a technological progression that ‘will become incomprehensively rapid and complicated’, as von Neumann postulated. Potentially leading to equally incomprehensive share price gains.
And as Sam Volkering writes, ‘Silicon Valley’s tech titans are currently locked in a $36.8 billion arms race to unlock the “Black-Box” equation.’
Solving what Sam calls the ‘Black-Box’ equation could unlock the doors to unsupervised machine learning. A scenario where computers no longer need to be programmed with each new fact. But rather they learn on their own by observation.
Sam has narrowed his focus down to three leading small-cap tech stocks involved in this $36.8 billion ‘arms race’. Stocks he believes could deliver returns in 2018 that make bitcoin’s 2017 gains pale in comparison.
Now before you dismiss that as a sales bluster, have a look at the table below. It’s from Port Phillip Publishing’s 2017 Alliance Report Card. It’s our annual effort to give readers an unbiased review of how each of our services are performing.
Alliance members received this last week. All of our paid readers will have a chance to read this in Port Phillip Insider sometime soon.
Kris Sayce put together this year’s report. And believe me, he didn’t hold any punches, with some services receiving grades of ‘C’ or even ‘D’.
Sam Volkering’s Revolutionary Tech Investor was the only service to receive an ‘A++’.
This table reveals all:
Source: Port Phillip Publishing
Click to enlarge
The 55 recommendations Sam has made to subscribers of Revolutionary Tech Investor since February 2016 returned an average gain of 70.69%.
As Kris notes in the Report Card:
‘The old saying is that anyone can pick a winner in a bull market. That may be true. But it still takes skill to beat the bull market by such a wide margin. For that reason, it’s hard to give Sam anything but the top score for this performance.’
You can find out more about Revolutionary Tech Investor, and Sam’s top three tech plays, here.
Unlock the Secret of T.I.M.E.D. Stocks — Important Reminder
Last Thursday we opened the doors for new subscribers to Phil Anderson’s premium Time Trader advisory service.
That offer ends tonight at midnight (AEDT).
If you haven’t checked out Phil’s interview with Kris explaining precisely how Phil’s proven T.I.M.E.D. stocks process works, you can do so here.
Combining the work of legendary trader WD Gann with his own decades of market research, Phil’s approach to trading stocks is unconventional. For example, he never goes bargain hunting.
As Phil explains in the interview,
‘What everybody seems to tell people to do is to “buy low, sell high”.
‘But actually, when you think about it, how do you know if a stock is low?
‘If somebody could tell that, there’d be a lot more rich people in the world.
‘How do you know when a stock is low?
‘Because if you think it’s low, you think it’s cheap, how do you know it’s not going to go lower and not be cheaper tomorrow?
‘Time Trader is more about identifying momentum…more about finding the right stock at the right time.
‘And, to do that, my maxim has become: Buy high, to sell higher.’
The way Phil explains it makes it sound so simple. But make no mistake. He’s spent many long years perfecting his trading style.
There’s still time to find out if his trading service is something for you. But not much. To find out more go here before midnight tonight.
And finally, this from The Australian Tribune:
‘Putin Praises Trump Slams US Political System’
‘A world where the US and Russia worked together would, almost certainly, be a better place.
‘Together they could end the war in Syria. Solve the issues in Ukraine. And agree that the people of Crimea overwhelmingly voted to join Russia.
‘They could even agree that the US has meddled just as much in Russia’s political affairs as the Russians have in the US.
‘The presidents of both nations appear eager to mend fences. Yet both the US Senate and House...’
If you’re fed up with sanitised, politically correct dogma cut and pasted from one mainstream source to another then The Australian Tribune is for you.
And it’s absolutely free.
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You can visit our website at https://www.theaustraliantribune.com.au/ to read the complete article above now.