Eric Bleeker at the Motley Fool came out with a big “presentation” recently where he walked around the stage pitching a new high-end project that they’re calling Extreme Opportunities: AR — a $999 no refunds one-year subscription to their thinking about augmented reality, starting with a 15-stock model portfolio and including whatever changes or updates they make to that portfolio for the coming year (and yes, they’ll autorenew you at “whatever the future price is,” right now they say it’s list priced at $1,999).
So naturally, we know that no one would ever jump on a $999 product that they’re not sure about, not when there’s no refund — and certainly would never spend that much to get a “hot” stock tip or two (or even 15)… so what to do?
Well, I can’t tell you whether or not their special reports will be worthwhile (they had a similar product about Artificial Intelligence stocks a while back, if you subscribed to that and have an opinion please share it with a comment below)… but I can sift through the hints that Bleeker drops in his ad presentation and let you know about the few companies he highlights, and let you get a little head start on researching the industry for yourself. That, at least, will give you some background and let you know whether you think it makes sense to spend that kind of money for some investment research.
And by the way, I will give you one tip: Don’t think of the gain potential of “getting in” on something hot when you consider a pricey newsletter subscription, think instead of the newsletter as part of your “investment expenses.”
Especially if you’re just learning and are not dealing with a big portfolio, or if you let yourself dabble with individual stocks with only a small part of your portfolio, be careful to think about what you’re spending in relation to the size of your investment portfolio. Everyone is justifiably wary of mutual fund fees in this era of low-cost index funds and ETFs, and thankfully hardly anyone ends up paying 1.5-2% expense ratios for below-average mutual funds anymore (thanks, Jack Bogle! Rest in Peace, you are a hero), but it’s not just mutual fund fees that can be a weight on your portfolio — pay as much attention to the money you spend to research investments. If you are thinking about investing $200,000 in augmented reality stocks for the next several years, then sure, spending $1,000 or $2,000 a year for what you consider to be expert research and guidance might (arguably) be reasonable — that’s similar to paying a mutual fund 0.5% to 1% to manage your money.
If, however, this is the kind of thing you’d just speculate on with some play money (assuming $200,000 isn’t “play money” for you), and maybe you’ll just buy a few stocks and put $10,000 or $20,000 into these kinds of ideas over the course of a year or two, then you’re spending a LOT — you’ve effectively committed 5% of your investment just to do some research, with no chance of a refund if you find the research disappointing, and you would NEVER invest in a mutual fund that charged a 5% annual fee (right?).
“Don’t spend more than 1% of your portfolio doing research” is a rule of thumb I feel comfortable with, and even that is an indulgence unless you are an active investor in individual stocks and really enjoy reading the newsletters or other research sources you receive, and get something out of the experience beyond the buy/sell advice on stocks. That’s just my thinking, though, you are, of course, welcome to do whatever you want with your money.
So anyway, what’s being promoted in the ad?
The basic implication is that augmented reality (abbreviated AR) will be the next major breakthrough –the next evolution in technology, similar in impact (though larger, the hype portends) to the personal computer, then the internet, then mobile computing and smart phones. That’s a common prediction we’ve heard many times.
And the meat of this promotion is that they are certain Apple will be leading the way, and that their “T288” device will be what makes augmented reality take off and create a new industry, similar to the iPhone a decade ago.
As is often the case with these kinds of stories, we also get lots of fleeting images of patent filings and drawings that buttress the argument that Apple is just about to release something fantastical (remember the patent drawings of that roll-up iPhone a few years ago? Yeah, most patented designs and products don’t end up being developed).
And we get that other oft-used ad technique: Photos of the mysterious secret building where Apple is developing key technologies for this “T288” — in this case, those are photos of a location in Santa Clara, CA where Apple is reportedly building (or growing) the next generation of Micro-LEDs for use in some future display technology… maybe that augmented reality headset? PatentlyApple posted a photo of the same building with a story about Apple trying to push display technology forward last year, if you’d like a little more background. That was mostly a story about how Apple’s display-building suppliers were a little nervous, but, as with so many of these R&D stories, it’s still pretty early and Apple might or might not use Micro-LEDs in some new AR device.
The “T288” name is not made up by the Motley Fool — that’s a “code name” that has been used to refer to the Fool’s long-rumored virtual reality/augmented reality headset/glasses project. There was a decent-size splash about this on all the Apple-following websites last year, so if you want to catch up with where folks were a year ago it’s worth reading this from Macrumors last year or the forecasts covered in Bloomberg back in 2017 (which thought a new AR device could be ready for release in 2020).