Blockchain week trundles right along here at Stock Gumshoe — no one can talk about anything else when bitcoin is close to doubling in a week (heck, at one point it looked like it might double in a day today), so we’re looking at the newsletter promos that are trying to capitalize on that mania.
And yes, to answer the pleas from Down Under, we’re looking at an Aussie version of the bitcoin teaser today. This one’s from Ryan Dinse’s Exponential Stock Investor, which is published by Australia’s Agora affiliate (called Port Phillip Publishing), and he’s following a similar refrain to other pitches: buying the enablers of bitcoin and blockchain technology, not necessarily the actual coins/tokens/cryptocurrencies themselves.
Normally I’d say that’s a lower-risk way to go, but it sounds like he’s pitching some micro-cap Australian tech companies as his “blockchain collision stocks,” so they’re probably still plenty risky. Shall we dig and find out what they are?
Do note, if you’re not one of our small (but mighty) cohort of Australian readers, it might be difficult to trade some of these stocks in the US. Some Aussie stocks trade over the counter in the US or have official ADRs, but not a lot of tiny ones do — and when they do, they tend to be illiquid and dangerously priced for US investors (especially when you want to sell… buying illiquid stocks is always easier than selling them). I always recommend Interactive Brokers if you’re looking for a good low-cost international trading broker, I’d go through them to buy ASX-listed stocks.
Let’s see what the stocks are before we pass judgement, though, shall we?
Here’s a little taste of the intro to give you some idea where Dinse is is coming from:
“Put aside bitcoin and cryptocurrencies. They’re yesterday’s fads, with the best gains already banked.
“We’re actually on the cusp of the most insane tech advancement in 58 years. And it’s already making stealthy early adopters up to $642,245 for every $10,000 invested.
“Not since 1959 have you seen a ‘collision of techs’ this big. Like the Big Bang, these rare collision events create a new universe. And in the ensuing flux, unbelievable wealth…”
And, of course, the swelling sense of “fear of missing out” urgency that every newsletter pitch depends on….
“But if you want to siphon the ‘Tsunami of cash’ (in the words of Scientific American writer Morgan E. Peck) there’s no time to mull it over.
“You need to make the simple moves I suggest below NOW.
“This story is moving as you read this. Very soon there will be no putting this genie back into the bottle…”
With investors already frantic about their lack of bitcoin exposure, that’s like throwing gasoline on a fire. I’m more of a “mull it over” guy, myself, having been around long enough to see how fast things can go down when sentiment shifts, but perhaps I’ll miss out on lots of profit because of it… that’s the deal you make with yourself when you keep speculation in check, and it doesn’t feel nearly as fun as rolling the dice and “going big”. Gambling is fun and winning on a gamble feels fantastic… and that’s fine, but lock up your credit card (or your home equity loan, or your retirement savings) before you drive down to the casino.
But anyway, you didn’t come to me for the advice of an old fuddy-duddy… you want to know the stocks Dinse is picking for this Blockchain Explosion, right? Let’s check out some more of the ad…
That last “Great Collission” he talks about in the ad is the invention of the microchip, which “collided” with the already-existing computer and created the consumer electronics boom and the personal computer and, eventually, ludicrous wealth for early players like IBM and Texas Instruments and Intel and the like.
And the next one is big data colliding with blockchain… here’s how he introduces it:
“Just like 1959, this new boom is being triggered by the collision of two technical innovations.
“The first is big data.
“…as I’m sure you will have already guessed…
“…is something called blockchain….Are you getting our free Daily Update
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“Because of blockchain, the era of cryptocurrencies was born.
“And with it, the ability to decentralise data.
“Like transistors improved vacuum tubes before, blockchain has triggered a giant leap forward in how data is used.
“But its true game-changing potential is only now…at the end of 2017…starting to properly take shape….
“BITCOIN AND CRYPTOCURRENCIES ARE RED HERRINGS
“The REAL story is what’s about to happen with the technology that birthed cryptocurrencies in the first place: Blockchain.
“It will be the people who figure out what happens next with blockchain…
“…and who have the smarts to invest accordingly…
“…who will become the next generation of tech mega-millionaires….
“The true epiphany is this:
“DECENTRALISED DATA ITSELF WILL BE THE NEW CURRENCY FROM 2018 ONWARDS”
Dinse goes on to say that he thinks the introduction of zk-SNARKs to the blockchain, particularly to ethereum, will be the breakthrough that really matters, bringing more privacy to cryptocurrencies… and that this will bring another huge move forward.
(The answer to “what is zk-SNARKs” is, I regret to inform you, math. Really hard math… but what it effectively is is a way to generate “proof” of a reliable transaction without sharing all details of the transaction. Since everything is public on most blockchains, if somewhat inscrutable to most, this is one of the ways that blockchains can try to implement real privacy… plus it’s much faster, at least in theory. And there my knowledge ends. zk-snarks was made possible in the latest ethereum upgrade, called Byzantium… there’s a coindesk article on it here that makes some sense even if you’re not a crypto-coder.)
I don’t know whether or not zk-SNARKS is the fundamental game changer for blockchain or not, there are certainly also other ways in which blockchain startups are trying to create faster, more private or more “controlled” networks. And, since we’re on the topic, Australia’s financial sector is being more aggressive than most with this — the Australian Stock Exchange just announced today that it is going to implement a blockchain system to replace its legacy trade settlement system (their contractor is Digital Asset, which is a young fintech company backed by a lot of huge strategic investors — including CME and Broadridge, incidentally, both of which have been touted in previous “blockchain” teasers that we’ve solved this week).
So yes, blockchain is sweeping the lucky country as well… what, then, are those stocks that Dinse is pitching? Here’s what he says he’s looking for:
“The rise in cryptocurrency prices is nothing compared to the effect this will have in the biotech, machine learning and artificial intelligence industries.
“And then the Blockchain Collision will ripple out even further…into security, transport, retail, agriculture, green industries and more.
“Find the stocks that are bridging the gap between blockchain and these industries and you’ve found yourself a quickly building fortune.
“I have the three best candidates on the planet for you….
“I’ve found three locked-in future NVIDIAs.
“These could be the most valuable stocks you ever add to your portfolio.”
And he goes on and on, but I’ll be kind to you and stop there (if you want to see the whole ad, it’s here)… we’ll move on to the meat of the matter, these are the clues for the first one of those “locked-in future NVIDIAs” …
“BLOCKCHAIN COLLISION STOCK #1
“WHY THIS COMPANY’S ‘SENTIENT CHIP’ COULD MAKE IT THE NEXT NVIDIA…
“This stock only trades at 15 cents.
“At the time of writing, it’s a genuine secret.
“You can only find traces of it on AI and tech trading forums….
“It’s a pure play on the collision between blockchain and AI.
“Perhaps the best AI pure play in the world right now.
“But it’s trading in obscurity, in the lower echelons of the ASX.
“It’s operating at the collision point that’s goi