Each day is a more provocative episode of what we call life in America. The first half of this year has brought a lot of uncertainty in the world. Starting with the war in Ukraine, surging inflation, and the recently overruled Roe vs Wade decision - making abortion illegal in some states. Although I am proudly pro-choice, this blog is not meant for politics. Instead I just wanted to share a few of my favorite books, podcast episodes, and technological advancements that I've come across so far this year. Enjoy!
Guns, Germs, and Steel - Jared Diamond
About the history of mankind, specifically the impact climate and environmental factors had on the development of different civilizations and geographic regions.
AI 2041 - Lai-Fu Lee and Chen Qiufan
Sci-fi novel about the future by ex-google emerging technology experts. Each chapter takes place in a different country focusing on a different technology impacting society in 2041
The Innovation Stack - Jim McKelvey
A St Louis glassblower, Jim, asked a friend's 15 year old son, Jack Dorsey, to help with a project. This isn't the story of twitter. Afterwards Jack went back to his St Louis Pal and founded Square, starting a small business revolution.
Mike Tomlin on Pitt legacy, super bowl, Flores Hiring & Future without Big Ben - The Pivot
Grimes (Elon Musk's Parter): Music, AI, and the Future of Humanity - Lex Friedman Podcast
Mark Zuckerberg on Long-Term Strategy, Business and Parenting Principles - The Tim Farris Show
Tech stock valuations - finding the right multiple and trimming the fat
Last year the demand for technology stocks outpaced the demand for their technologies - but cloud computing, AI, blockchain, and AR/VR are still the fastest growing and most innovative industries
If I could tell you what P/E ratio equates to a fair valuation for emerging tech - this blog wouldn't be free! But I will share the industries that I'm most closely tracking in the following sections:
Web3.0, Solar Battery Storage, IoT and connected devices, along with the cloud computing infrastructure driving the charge
Similar to the dotCom Bubble of 2000 - most of the companies/projects that lack tangible economic value will go bust. But the cream will rise to the top. What innovations will equate to the Amazon, Google, and Microsofts who survived 2000 and thrived for the long haul?
**Disclaimer: The next sections are NOT investment advice. This is NOT suggesting that right now is the best time to buy. I do encourage dollar cost averaging and being patient.
Web 3 use cases I dig
IPFS Filecoin, Storj, iExec RLC - provides on-demand access to cloud computing resources. Supports compute-intensive applications in fields such as AI, big data, healthcare, rendering, or FinTech. One of the main strengths lies in trusted off-chain computing.
Web 5 - leverages Bitcoin, the decentralized monetary network, and a plethora of sound computer science technologies to create a new ecosystem of decentralized identities, data storage and applications in which the users are in control of their personal information. Developed by Block - Jack Dorsey and Jim McKelvey
Whats up with battery storage
UBS estimates that over the next ten years the energy storage market in the United States could grow to as much as $426 billion, and there are many ways to buy into the surge, including chemical companies, battery cell makers, car companies, solar companies and utility companies.
My favorite Stock: Enphase (ENPH)
My favorite ETF: Invesco Solar ETF (TAN)
So Amazon Web Service's Cloud, the Ethereum Blockchain, and Bitcoin all run on similar semiconductors - and these are the "chips" clogging up our supply chain - right on sister (2022 update to the saying)
My favorite stock: Nvidia (NVDA)
My favorite ETF: VanEck Semiconductor ETF (SMH)
Fertilizers in the west hem, baby
Watch the video to see why I am restarting a position after selling off earlier this year during the boom
Cost to make fertilizer has skyrocketed due to nitrogen cost hikes (nitrogen is made of natural gas I.e. inflation of gas prices)
Fertilizer supply has been drastically limited due to war in Ukraine sanctions
Catalysts: All fertilizer is made of nitrogen, phosphorus, or potassium
Nitrogen
Nitrogen made of natural gas
Nitrogen based (ammonia) fertilizer has gone from $200/ton to 1000/ton
Phosphorus
~10% of worlds supply comes from Russia
Price has appreciated from $200/ton to $700/ton
Potassium (potash)
~25% of worlds supply comes from Russia
Price has appreciated from $250/ton to $700/ton
My favorite stock: Mosaic (MOS)
My favorite ETF: iShares MSCI Global Agriculture Producers ETF (VEGI)
2. Wacky Tobaccy, left handed cigarettes - if you made it this far you get to read about the weed
Whats the why:
More legalization = more customers (higher revenue)
But not much higher operating costs - MSOs have already established a market presence in states like PA where cannabis is legal medicinally (Ability to increase customers and SKUs in already open locations)
Democrats need some political juice to offset the recent momentum from the right - why not the low hanging fruit (or weeds in this case) - remember this is a state by state thang
SAFE Banking - greater access to capital markets and debt
Banks can't offer debt, nor can equity funds take large ownership positions in cannabis companies - but one day this will change
Theres the potential for a demand shock as new, more sophisticated investors get high on market dynamics and ride momentum (i'll slow down with the puns) - also this law is federal - aka less likely to change soon
The stocks prices are LOW - Revenue and Profits are trending higher
MSOS stocks are currently profitable on an EBITDA basis (and some on a net income basis) and are growing at rates of 30%+ - seeking alpha
Taking a look at the balance sheet.. Cresco's stock price of $2.51 (at COB June 30) has fallen to almost equal the book value per share of 2.47 (per yahoo). Does this mean a lot of upside.. or are the analysts on seeking alpha high on a pipe dream?
My favorite stock: Cresco Labs (CRLBF)
My favorite ETF: AdvisorShares Pure US Cannabis ETF (MSOS)