We’ve covered quite a few teaser pitches from Jim Fink at Roadrunner Stocks over the past few years, including a few weak performers and a few very good ones (not so different from most folks), and this one caught our eye this week with the specific prediction that the “secret stock” will triple your money in the next two years. Particularly since he tosses out some of the phrases that really act as Pavlovian triggers for investors, like “Is This the Next Peter Lunch-Style ’10-Bagger’?”
At first, I thought he was still teasing the same stock he’d been riding since December as his “if you buy only one stock in 2015” idea that he called the “best tech stock under $6 (and then, later, “under $8”), and I was going to check up on that because that company was actually acquired pretty recently at probably close to the average price during the times Fink teased it heavily (that was Silicon Image, by the way, my older article on the tease is here… it was bought by Lattice Semiconductor for $7.30 per share).
But no, he’s got a different idea this time… ready for the excitement?
First, the big picture promise — here’s an excerpt to give you an idea of where he’s going…
“Unstoppable Profits from the ‘Silicon Squeeze’
“Here’s why this invisible ‘traffic jam’ is about to set off a $100 billion battle to control the Internet…
“I’ll tell you how to get in on the ground floor and triple your money in the next 24 months….
“You’ve probably heard of the Internet of Things. It’s the idea that, sooner or later, everything—from your toothbrush to your coffeepot to your watch—will be connected to the Internet.
“Today, there are 7 billion devices online. By 2018, that number will rise to 20 billion. And by 2020, there will be 50 billion devices connected to the Internet of Things….
“The Invisible Traffic Jam in Your Living Room
“This new Silicon Squeeze won’t be a problem for the massive fiber-optic lines that from the backbone of the Internet.
“But it’s a disaster for the copper cables that connect the Internet to your home.
“You see, those cables can only handle around 10 megabytes of data per second….
“The new Silicon Squeeze will simply overwhelm existing cable networks. The result? A massive “traffic jam” of data—and glacial Internet speeds that will make you long for the days of dial-up….
“The good news: There’s a simple solution to this invisible traffic jam. It’s called fiber-to-the-home, or FTH for short.
“Unlike conventional cable, fiber-to-the-home doesn’t rely on outdated copper wire. Instead, it connects your home directly to the Internet with cutting-edge fiber-optics.”
OK, so that’s the big idea — and it’s one we’ve heard before, and it carries the ring of truth: “Internet of Things” means “more data”… and “more data” means “more congestion,” particularly since we’re also seeing huge demand for bandwidth from increasing video streaming and cloud computing and lots of other high-impact trends.
That drives a lot of things, from demand for storage and distributed access and content delivery networks to demand for more fiber connections to better technologies for compressing and sending data faster, and there are investable ideas for most of those strategies… but he’s got something much more specific to tease: a company that profits from the buildout of “fiber to the home.”
The basic idea is that we can solve most of these problems if there’s dramatically higher bandwidth going directly into your home (replacing your garden hose of bandwidth with a firehose of data into your home WiFi network, which is connecting your phone and your computer and your printer and your refrigerator and your thermostat and your television and your solar panels and… well, you get the idea).
And though it’s still pretty early days yet, with most folks nowhere near getting a “fiber to the home” connection unless they’re in one of the test communities where Google’s pushing their Google Fiber (like Kansas City, Austin or a few others) or live in an area where Verizon is investing in FiOS expansion, there seems to be a pretty solid consensus that we’ll see more fiber extension in the years to come.
So… which fiber stock is Fink teasing here? Let’