What’s the “Tiny Device Changing Entire Financial Industry?”

Exponential Tech investor says "It’s about the size of a stamp, co-invented by a Silicon Valley billionaire, and at the heart of a $7.6 trillion wealth grab…"

By Travis Johnson, Stock Gumshoe, November 29, 2016

Exponential Tech Investor is a relatively new newsletter service from the Bonner & Partners stable, but that Bonner/Agora connection means it’s getting a lot of play — and we’ve seen a lot of questions about this latest pitch for the service that hints at a “Tiny Device” that editor Jeff Brown says is “Changing the Entire Financial Industry” … so that’s our topic for today.

That newsletter will run you $2,500 a year at their current price, and so far it has mostly been focused on highlighting brand new IPOs that Brown finds compelling — so far he has pounded the table for Editas and Intellia (NTLA), both in the CRISPR/gene editing space, and both of those have done poorly after a quick initial spurt — which means his service presumably stopped out of those positions early and no longer holds those stocks in its recommended portfolio (Brown makes a point of saying in the ad that he sticks to a firm 25% trailing stop loss strategy, which, given the timing of his teaser pitches about these two stocks, would have meant selling both at roughly break-even — though in both those cases the 25% stop loss was certainly the right move, NTLA is a little lower than that sale price now and EDIT has fallen another 50%).

So, presuming that you don’t want to shell out $2,500 just to learn about this “tiny device,” let’s dig into it a little bit and see what he’s really talking about — then, if you feel like it, you can certainly subscribe to his newsletter. Signing up for a substantial and ongoing financial commitment just to learn a “secret” is a dumb idea, mostly because that means you’re subliminally predisposed to be enthusiastic about that secret and believe the marketing hype if you paid for it and fall in love with an investment, perhaps with even more money than that $2,500 at risk… but that doesn’t mean the Exponential Tech Investor newsletter is necessarily terrible. Let’s dig in, check out the clues in the ad, and give you a head start on some critical thinking so you can make your own call.

The ad features a photo of a little white square that Brown says is that “tiny device” that’s helping to change the financial industry, and lays it on n ice and thick:

“How you invest…

“How you bank…

“How you retire…

“Right down to how you buy groceries…

“It’s ALL changing.

“And depending on how you act today…

“You could make a fortune.

“That’s because, as the financial industry radically changes, many old “establishment” companies will be replaced by a brand new type of financial company…

“Forbes recently published an article calling this: “a global phenomenon.”

“And investing in this trend now, while it’s still taking off, means you could make stellar profits.

“In fact, one of these new companies changing finance is behind the tiny device I just showed you.

“I predict an investment in it could give you a 1,000% return over the next few years…”

Who isn’t impressed with a 1,000% return, right? There’s even a little chart with a green arrow showing us how cool a 1,000% gain is… yee-ha! (and yes, for the math challenged among us, that means you “could make ten times your money”).

More:

“Why Am I So Confident?

“Because the co-inventor of this tiny device was a billionaire by age 35.

“He’s currently the CEO of TWO public companies.

“And he’s been compared to Steve Jobs, the visionary founder of Apple.

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“In short, he’s a moneymaking genius.

“Now, his little device could be shipping to as much as 20 million US businesses…

“And it will help make thousands of new millionaires…

“In this presentation, I’ll reveal how you could be among them.”

And then he gets out the trowel:

“… the financial market this company operates in is worth $7.6 trillion.

“That’s more than 650,000% bigger than this company’s revenue.

“So honestly, my 1,000% gain prediction could be conservative.

“Bottom line is, this single stock could be a “retirement maker”…

“You could pay for your grandkid’s college tuition free and clear…

“Perhaps buy a yacht and sail the world…

“Whatever you want…

“All thanks to a small investment in a single stock.”

And that’s pretty much a textbook example of “don’t think this way about any investment” — if you go into an investment thinking that the technology is so cool and unique that it will give you massive returns and be a “retirement maker,” you’re going to be predisposed to take lots more risk with that stock — either taking too big a position, or refusing to think critically about the stock if the company’s prospects change.

So erase that from your mind. But what’s the stock? Well, I kept looking for some little tidbit that would tell me that the photos were just an example, but with the other clues in the ad it’s quite clear that the stock Brown is teasing is, in fact, Square (SQ), the payment solutions company co-founded by Twitter (TWTR) CEO Jack Dorsey.

Square is best-known for that little square card reader that goes into your iPhone jack and for the associated software that lets small b