Dear Reader,
Given that it’s the day before Thanksgiving here in the U.S., we’re going to focus our attention on some more positive developments. These are things that we can be optimistic about.
The holidays always bring moments where life can slow down just a little bit. We have the chance to step back, see the bigger picture, reflect on the past year, and look forward to the future.
And we have a lot to look forward to next year.
It may not feel like it, but this pandemic is almost over. There will certainly be those who try to extend the lockdowns and perpetuate fear and panic. After all, there are many who profit financially and politically by doing so.
But I hope that all of us here at The Bleeding Edge won’t fall for it.
The reality is that vaccines are here. Approvals are literally days away.
The Food and Drug Administration (FDA) will approve the Pfizer/BioNTech vaccine on or before December 10.
Moderna will soon file for emergency use authorization (EUA) for its vaccine, which will be approved on or before December 17.
And AstraZeneca is preparing its own submission for emergency use authorization from the World Health Organization (WHO), which I expect will also happen this year.
What does this all mean?
Within hours of each approval, the vaccines can be administered to those most at risk. Hundreds of millions of doses will likely be given before the end of this year.
Many don’t know this, but the doses have already been manufactured. And more than a billion doses will be available throughout 2021 for those willing to take one of these vaccines.
And for further perspective, both China and Russia have already been distributing their own vaccines.
It is all happening now at a pace and scale the world has never seen before.
To me, the vaccine represents the one thing, the excuse, for returning to normal. Too many people have been psychologically traumatized by the fear perpetuated around COVID-19.
It’s not their fault. Unless someone is reading the scientific research daily like I am, which isn’t easy, it is hard to know what to believe. But these vaccines can convince those living in fear and depression that it’s okay to return back to our normal lives.
And we can also be positive, excited, even optimistic about the remarkable strength of the U.S. economy and its stock market. I’d be remiss not to mention that the Dow Jones Industrial Average just hit all-time highs and a major milestone – 30,000.
I can’t imagine a more perfect picture than the one above. It clearly demonstrates the positive impact of less regulation, low taxes, low interest rates, good trade policy, and record low unemployment levels on the stock markets.
For anyone interested in investing, capital gains, and financial independence for themselves and their families… these things really matter.
It’s also no surprise that the Nasdaq and the S&P 500 are at all-time highs.
We have a lot to be thankful for, even amid this pandemic.
We’ll still be at work here at The Bleeding Edge the next two days. Tomorrow will be a different format, but I’ll still be publishing.
And I encourage everyone to read Friday’s mailbag issue. I’m going to be writing about an important topic for anyone who cares about freedom of speech…
Happy Thanksgiving!
As if Google wasn’t burrowed deep enough into consumers’ lives, it is now making a big push into the personal finance space. I’m surprised it took so long…
Google has offered to facilitate credit card payments through Google Pay for years now. But that was about the extent of its foray into personal finance.
Last week, however, Google released a redesign of its Google Pay application. And it’s loaded with additional features that show the company’s growing interest in this space.
Its extended offerings now include peer-to-peer payments, linked checking and savings accounts, group payments for splitting bills, spending analysis, and the ability to search all previous transactions by category or vendor.
Clearly, Google is out to compete with other finance apps like Square, Venmo, and Mint with these additional product offerings. And I must admit, these features and functionality are attractive.
And about 85% of smartphone users around the world use Google’s Android operating system. It will be easy for Google to reach a massive customer base with its additional financial services offerings. That’s why I’m surprised it didn’t make this move sooner.
But as with all of Google’s offerings, there’s a downside to the convenience. Google is all about extracting as much data from consumers as possible.
Google Pay’s New Features
Source: The Verge
The revamped Google Pay will prompt users to allow the app to search through their devices, looking for things related to spending and finance. This will allow Google to access the data on our phones. It will comb through all emails, documents, and pictures searching for ways to improve the documentation and tracking of financial activity.
Google claims it won’t do anything unacceptable with the data it gathers through this process. But do we really believe that? I know that I don’t.
This company has proven time and again to be a poor steward of our data. Google’s business model relies on taking as much consumer data as it can, packaging it up, and selling it to the highest bidder. It cares nothing for privacy.
So my advice remains the same – stay as far away from Google as possible.
I recommend choosing the iPhone over Android devices… using the Brave browser rather than Google Chrome… searching online with DuckDuckGo instead of Google’s search engine… opting for Square’s Cash App or Venmo over Google Pay… and jettisoning Gmail for iCloud or any other email provider that will respect user privacy.
All these alternatives offer equal or better quality than Google’s products, with the added benefit of remarkably better privacy.
Amazon just revealed the new and improved Echo Frames smart glasses. These are slick.
Have a look:
Amazon’s Echo Frames
Source: Amazon
The Echo Frames look just like a regular pair of glasses. The form factor is beautiful. But these glasses are enabled with artificial intelligence (AI). Alexa is essentially “inside” the glasses.
We talked about how Alexa got a major upgrade on Monday. The AI is now being run in the cloud and powered by Amazon’s new Inferentia chip, which reduces latency by 25%.
For consumers, this means Alexa will respond to questions 25% faster. That enables more natural conversations with the AI.
So it is no coincidence that Amazon is rolling out its upgraded Echo Frames product at this time. The smart glasses will connect to a smartphone that gives wearers direct connectivity to Alexa running in the cloud.
And unlike the earlier version of this product, the new Echo Frames will be commercially available to all. It’s an exciting product launch that will allow wearers to be in constant contact with Alexa without ever having to touch their phones.
I have talked before about how I believe that AI will become seamlessly embedded in our lives so that each of us is supported by an AI-enabled assistant. Smart glasses are a great way to make this happen. They can whisper in our ear when a text message comes in or when we have a meeting coming up.
I do need to point out that these are not augmented reality (AR) glasses. That’s a big reason why they are so slim. It’s much easier to make attractive glasses when they don’t need all the technology required to power AR applications.
That said, I predict that Amazon’s next version of this product will be AR-enabled. It just makes too much sense.
Amazon is in the business of creating marketplaces, particularly those centered around transactions. Amazon is gearing up to use AR to enable more seamless transactions between customers and the products and services they consume.
We can imagine walking into a coffee shop, “seeing” the menu in our augmented reality lenses, and ordering exactly what we want. And because Amazon’s glasses are integrated with Alexa, I envision that ordering will be done through simple voice commands.
As excited as I am about the new Echo Frames, I believe this is just a stepping-stone to larger strategic play.
Airbnb’s long-awaited initial public offering (IPO) filing was just made public. Given that the company was founded way back in 2008, this was overdue. Twelve years is a long time for such a prominent company to stay private.
Airbnb originally filed confidentially for an IPO back in August. That news leaked, however, and we talked about it here in The Bleeding Edge.
In fact, I said that if it were my decision to make, I would wait until after Airbnb’s third-quarter financials were available before making the IPO filing public. Airbnb needed to show that it was on a path to recovery from the COVID-19 pandemic, which wrecked its financials in the second quarter.
Well, that’s exactly what the company did.
And as I predicted, the strategy worked perfectly. Airbnb produced a profit in Q3 – showing a rapid post-pandemic recovery.
Airbnb’s filing also demonstrated that the company has had periods of profitability and free cash flow generation in the past. That’s unique.
For comparison, Uber, which was also founded in 2008, has not come close to generating a profit yet. In fact, Uber is scrambling to shore up its finances. We talked about that yesterday.
So it’s not a surprise to see Airbnb finally going for its IPO. It’s going to be a hot ticket.
Of course, that doesn’t mean we should rush out to buy Airbnb immediately.
As we talked about yesterday, we need to see where the investment banks price an IPO before we can assess its investment potential. It’s not enough to just buy good companies. To be successful, investors need to get both the company and the valuation right.
Airbnb is structuring its IPO differently from most, however. That caught my eye immediately.
Most companies employ a 180-day lock-up period after they go public. That prevents the private investors and employees from selling any of their shares in the company for six months.
Airbnb isn’t doing this. Instead, it will allow employees to sell up to 15% of their holdings in the first week of trading. And employees will be permitted to sell even more if the stock price trades above a certain level.
I love this approach.
The 180-day lock-up period causes distortions in the market that tend to harm normal investors. Typically, the fast-money hedge funds will bid the stock price up significantly in the months following an IPO. Then they dump shares on unsuspecting retail investors who are scared they are going to miss their chance at the stock.
Then, when the lock-up period expires, the insiders begin to sell their shares to lock in profits. This causes the stock price to pull back substantially, leaving normal investors holding the bag and often selling at significant losses as they become fearful of any further declines.
By allowing employees to sell some stock without restriction, Airbnb may soften the impact of its lock-up expiration. That will be advantageous to normal investors, which is why I’m such a fan of this.
I hope more and more companies start to take this approach.
Regards,
Jeff Brown
Editor, The Bleeding Edge
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The Bleeding Edge is the only free newsletter that delivers daily insights and information from the high-tech world as well as topics and trends relevant to investments.
The Bleeding Edge is the only free newsletter that delivers daily insights and information from the high-tech world as well as topics and trends relevant to investments.
