The broad market continued higher and I held my existing positions without trading a share this week. Thus, the only change to my port was the volatility against me. This week I’m going to share my thought from a broader perspective. Below is my opinion only and I could be way off base; but it’s the thought that guides my investment decisions. Win or loss, it’s my own sword to swing…
On a macro level, the way I see it, A.I. is a computer “trending” summaries of human thoughts, behaviors, activities. Basically. we are programming algorithms to summarize the collective patterns of human behaviors, thoughts, and activities and then predict where these behaviors, thoughts, and activities are going next. Since it’s human basic instinct to share, this sharing is now being recorded digitally worldwide. And this is made possible thanks to the creation of “cloud storage”. Boom! BIG DATA is born!
Because I see A.I. as an analytical tool for the recorded data of the human race which is now conveniently called Big Data, it’s my 2 cents that anyone who has the best algorithms to capture, sort, filter, and then assimilate successfully the biggest data set out there will play a significant part in the A.I. world. Somewhere a small upstart company with its A.I. division is doing just that. This company is also getting attention by partnering with Alibaba (BABA), Tencent (0700), Sina (SINA), Weibo (WB) and others on fintech, facial recognition/AR and natural language processing technologies. Yes, I’m talking about $MARK. We must remember that KanKan is created by a group of programmers; hence $MARK biggest asset is this group of programmers and its propriety A.I. algorithms that are doing a great job analyzing the Big Data made available by its partnership mentioned above. Imagine Larry Page and Sergey Brin (founders of Google) all over again but this time on A.I. instead of search engine. Can this group of KanKan programmers take over A.I. the way Larry and Sergey beat out the minds of Yahoo and all other wanna be search engines? Can $MARK’s CEO, Kai-Shing Tao, guide KanKan the way Eric Schmidt (Google first CEO) guided Google to the top of the heap? I think the fact that KanKan is in the race is by itself the biggest sign on the wall that this company is a baby gem at this moment in time. A.I.is an unstoppable phenomenon because the technologies supporting it are ready. It’s the natural evolution of the digital world. And that is why I believe $MARK is considered a megatrend stock per my own 2 cents. In a manner of speaking, I believe even at this current price, we are buying $MARK at the beginning of the megatrend in A.I.
Giving that we are still at the early stage of A.I. development, I think the risk of being left behind with dust on the face trading $MARK is very high. In its early day, OLED technology had been predicted to replace the older LED tech and those who saw it, believed in it, and held the stocks despite volatility came out ahead. I missed the $OLED boat because I focused too much on the short-term volatility and failed to hold on to the “conviction” of the bigger picture. I’m not going to repeat this mistake with $MARK.
The biggest drawback in swing-trading a megatrend stock is that after getting out, I may “forget or hesitate” to jump back in! The psychology of buying back at much higher price from what I sold at a profit can create hesitation. Furthermore, undue stress created from waiting for the “right” correction to jump back in may interfere with the hard and fast decision-making process needed to jump back in because the market doesn’t wait for anyone. Thought like “this correction may be just the beginning, I’m going to wait a bit more…” may stay my hand and then before I know it, price bounces back furiously and I’ll miss the boat once again. And this stress and hesitation can only increase when price continues much higher day after day, week after week, or month after month. And before I know it, I can easily miss the boat like I did with $OLED. And I’m pretty confident that I’m not the only ones going through the above scenario in missing the boat.
What about market risk in $MARK?
Yes, market risk will always be there but the partnerships mentioned above and the recent news regarding contracts signed I mentioned in last week blog give me the confidence that the probability of success is better than 50/50. But that is my personal assessment only. As far as I’m concerned, the A.I. megatrend may be the last megatrend I can witness in my lifetime; so I better be on it.
I also see a future where communication en masse for the safety of the population will play a significant role in our society; hence my big bet on $LRAD. Recent news, “LRAD® Corporation Acquires Location-Based Mass Messaging Solutions Provider, Genasys Holding S.L.” exemplified why I think the new management of $LRAD is a godsend. The acquisition is as perfect as a fire department buying a technology to put out fire. The money is well spent! Below excerpt highlighted the importance of this acquisition:
“The acquisition of Genasys enables LRAD to significantly enhance its advanced mass notification capabilities and pursue broader geolocation based mass messaging projects and services,” stated Richard S. Danforth, Chief Executive Officer of LRAD Corporation. “Many of the mass notification opportunities we target, including universities, cities, and countries, require an integrated location-based mass messaging service. With this acquisition, LRAD expects to generate revenue on initial installations and recurring revenue from long-term support contracts for updating and maintaining the messaging service over the life of the installations.”
This mass messaging tool may be the missing piece that may open the flood gate for orders to come in from universities, cities, and countries for LRAD’s complete mass notification systems. Just imagine the part of the population where the long-range mass notifications failed to reach due to further distance, headphones, or hearing losses, they can now receive text messaging on their mobile phone of the emergency situation. With this recent purchase, I’ve even more confidence to ride the volatility wave of $LRAD.
As of now, $LRAD already achieved close to 86% of its 2017 annual revenues for 2018 fiscal year with close to three additional fiscal quarters to sell more. This recent acquisitions may open door for sales to double 2017 annual revenues. All I need now is to sit and wait for more orders to come. And when they come, hello to $3+.
I’m quite thrilled about the biotech world when it comes to exosome science and plant-based protein expression. As we head into the 1st quarter of 2018, the odd of hearing about the FDA meeting $AEMD is scheduled to meet gets closer and closer by the day. And the same go to hearing about the filing of IND for $IBIO‘s IBIO-CFB03 drug trial.
At this point in time, I’m committed to the four stocks in my port and I’m inclined to sit on my hands unless I see a major broad market correction coming. So far, all signs are pointing to the up and up from the broad market perspective.
Due to slight corrections from all four positions, my port gave back some from prior week.
Main port: LRAD AEMD MARK IBIO & cash (up 5.7% YTD)
Trading port: MENXF IBIO
My 2 cents
From my camera: