Dear Reader,
Welcome to our weekly mailbag edition of The Bleeding Edge. All week, you submitted your questions about the biggest trends in technology.
Today, I’ll do my best to answer them.
If you have a question you’d like answered next week, be sure you submit it right here.
Let’s begin with a question on investing in private companies:
Hi Jeff, I couldn’t be happier with your service, your knowledge, your products, and my choice to go all in with a Brownstone Unlimited subscription. You are one of my favorites, and now that you brought Jason over from the other publisher, where he was one of my favorites, your service is just that much better!
I wish to invest in great, early stage, well-managed, transformational technology companies, like the ones you often tell us about in The Bleeding Edge.
The problem is, I am a novice at venture capital (VC) investing. I deeply admire your experience, passion, and connections in the tech industry – and especially your ability to not just find but properly value small private companies.
If I were offered the opportunity to get involved with [a private company], I would not be very good at knowing whether the price offered is a fair valuation. These companies don’t have revenue or any of the other metrics normally used, and often their projections are skewed one way or the other.
Would you ever consider helping accredited investors or investment companies like mine sift through the field to find the diamonds? Maybe a club or millionaires’ group that you share your best venture capital or angel investing ideas with?
– Brent H.
Hi, Brent, and thanks for writing in. Your timing is excellent… In fact, I’m planning a special event to discuss this very subject.
On November 17, I’m going to host the Day One Summit. There, I will unveil my plan for helping investors get in on early stage private investments on “day one.”
I’ve spent over six years looking for a way to bring early stage private investments to my readers. And put simply, I know of no better way to generate life-changing returns than private investing.
In my own portfolio, I’m an active angel investor in more than 270 deals… and that number grows every month. These investments will help me not only ensure my immediate family is well taken care of… It will even ensure the financial security of my grandchildren and great-grandchildren.
That’s the power of private investments.
Now I’m finally putting all my experience to work for my readers. The good news is, this service won’t be restricted to accredited investors. Anyone can invest in the deals I’m going to share.
I’d highly encourage you – and any other interested readers – to go right here to sign up to attend this summit. It’s going to be an amazing night. And I believe it will be the start of great things for many people who choose to explore this area with me.
I have incredible plans with this new project, ones that will have a direct and positive impact in the industry for both founders and for angel investors.
One of the things that I really enjoy about investing in early stage private companies is that I’m always dealing with imperfect information. That may seem counterintuitive. After all, the more information the better, right?
In general, that’s true. But as an investor looking to have an edge, we must acquire expertise in understanding these kinds of valuations with imperfect information. And we must know how to asses the growth potential of a team and their product or service. These factors will grant us a huge advantage.
And that’s the kind of advantage that we’ll have in Day One Investor.
As for your specific question, thanks for raising it. I’ll have to give that some more thought.
My focus to date has been to open up the doors on this private investment asset class for all investors. My November launch has been seven years in the making, and it’s an incredible milestone for Brownstone Research.
It has been a personal goal of mine for so long. I can’t wait to make it available.
I believe that the launch of this product is going to lead to exciting possibilities. One of which might be along the lines of what you mentioned. But first thing’s first – let’s have some fun and get in on Day One.
I am certain that the research and editorial content that I’ll be sharing in my new research product will be useful in supplementing your own research.
And if you haven’t signed up for my upcoming summit, then please go here to put your name down. I’ll go more into these and other details about private investing then.
Hope to see you there!
Next, a reader wants to know more about protecting our information:
What cybersecurity technologies, protocols, subscriptions, or companies do you recommend to protect retail investors’ computer/cyber information?
Background: My wife and I have been hit by several cyber scams over the past few years despite the fact that we do not have smartphones, nor do we do any banking online.
Of course, we do extensive investing online using our computer workstations. Thus, we want to support ways to offset the growing threats and welcome your suggestions!
– Daniel H. T.
Hi, Daniel, and thanks for writing in. This is definitely a topic on many people’s minds these days, as there are ever more scams that we need to watch out for every month.
You don’t mention specifics about the ones you and your wife have encountered, but I can offer some general advice for avoiding many traps.
First, we should make sure we’re well-educated about the most common cyberattacks we can encounter. As unfortunate as it is, most cybercrime occurs through human error rather than cyber-criminals hacking our devices.
For example, we should not click on links or download attachments in emails or texts unless we are absolutely sure who they are from.
Many “phishing” emails or “smishing” texts may appear to be from legitimate sources at first glance – but if we look closer, they may be from the wrong return address or show other signs of being fake, such as typos or an old version of a logo.
And phishers can be sophisticated. If we haven’t ordered any packages, we shouldn’t click on a text telling us our order is delayed, as one example. And we should also be especially wary of any link that takes us to a page that wants us to log in to an account.
It seems simple, but these kinds of cyberattacks can be very harmful to individuals and businesses. Back in 2020, Universal Health Services experienced an attack that took down its entire computer system.
It has hospitals throughout the U.S., Puerto Rico, and the U.K., but it was reduced to using paper records while the issue was resolved. And the cyberattack was achieved with simple phishing techniques. The hackers got into Universal’s network by getting an employee to click on a malicious link in an email that looked legitimate.
So a good rule of thumb is that we should always be skeptical if we do not initiate a communication ourselves.
Even if we receive a phone call or other communication claiming to be from our bank, the Internal Revenue Service (IRS), or another “legitimate” organization, we should not give them any personal information. Instead, we should hang up, look up the official number ourselves, and call back to confirm the communication was valid.
I also highly advise readers to never answer calls from numbers they don’t recognize. Think about it – hackers may know who our friends and colleagues are based on our social media profiles.
As I wrote back in July, LinkedIn was the latest to suffer a massive data breach that revealed all kinds of personal information to hackers. This information could enable hackers to forge an elaborate deception.
Forming these kinds of habits is the best way to avoid being taken in.
If we do have a smartphone or a tablet, I’d also recommend using two-factor authentication (2FA) for all of our important accounts. This is the technology that requires us to enter in some kind of code after we have already entered our username and password when we log in to a website.
There is a nuance, however. While receiving a code via text message or email is effective as a second factor for authentication, if the hacker has possession of your phone number or email account, you’ll still be at risk.
So ideally, a third-party authenticator like Google Authenticator or Authy is a good option for the second factor. These are software applications that can be downloaded to our devices and linked to our personal accounts. They have authentication codes that change every 30 seconds or so.
Once you have set up your account for two-factor authentication via an authenticator, simply open it, get the code, and type it in when prompted to do so. For important financial accounts, this kind of technology is a must.
These are just a few of the most basic steps people can take to protect themselves. It’s important to keep up to date, however, as the capabilities of cybercriminals continue to evolve over time.
Daniel – I know what you’re asking for. But the truth is, I don’t know of any one-click software solution that will protect us from cybercrime. If I find one, I’ll definitely let my readers know. And if we could invest in it, it would definitely become a recommendation.
But the reality is that cybersecurity is as much of a process as it is a technology. And if we can manage not to put ourselves at risk by falling into any of the traps mentioned above, we can avoid being hacked by all but the most sophisticated actors.
Let’s conclude with a question about meme tokens:
Hi Jeff, I love what you are doing for humanity. Keep spreading the knowledge that will equip regular people like myself to become financially healthy. My question has to do with the meme coin Shiba Inu (SHIB). I am invested in it, and I would love to hear what an expert has to say about it. Thanks in advance.
– Andre R.
Hi, Andre, and thanks for the compliment. Nothing makes me happier than my subscribers not only growing their wealth, but also becoming more knowledgeable and smarter investors. These are skills that can be learned, and they’ll last a lifetime.
As I continue to build out my team at Brownstone Research, and my investment research products, my goal is to have a suite of research products that will be able to serve all of my subscribers no matter what stage they are in life and what their financial goals are. I’m getting there, but I still have some more work to do…
And this is a fun question… I’d be surprised if more than a few readers haven’t speculated with this meme coin or another.
While many people in the cryptocurrency space focus on bitcoin (BTC) and ether (ETH), a certain subsector of investors has jumped on the meme coin craze. Since the beginning of this year, SHIB alone has risen a whopping 87,567,468%. That puts its $35 billion market cap above many S&P 500 companies.
That’s an insane return by any measure. And it’s no surprise that it’s attracting even more attention as a result.
The important thing to keep in mind with meme coins – or meme stocks, for that matter – is that the gains are driven entirely by public sentiment. In other words, it’s a feeding frenzy driven by a crowd mentality. The growth is not driven by the fundamental value or potential of the asset.
Unlike BTC and ETH, Shiba Inu – and most of the so-called meme tokens – have very little actual utility. There’s essentially no use case for SHIB yet. And while it may develop one following the surge of interest, there’s no guarantee that it will.
So I wouldn’t call buying SHIB investing. Rather, this would be a purely speculative position. Just as quickly as it has gone up, it could reverse course.
Public interest can be extremely fickle, and if the tide turns, I expect SHIB’s valuation will deflate rapidly. So I would strongly advise against putting any money we’d hate to lose in it. This is absolutely not something I would put rent money into.
But if someone would like to place a small bet of a few hundred dollars in SHIB or preferably another meme coin that hasn’t run up yet… there’s no reason not to have a little fun, as long as we know the risks involved.
It can be easy to lose some, or even all of our investment, in a highly speculative cryptocurrency like this. As long as we’re going in with the correct perspective and position sizing, this meme stock craze could make an entertaining addition to our digital asset portfolios.
In fact, my team and I were discussing this exact topic yesterday. We were considering the possibility of a handful of meme coins that might just have a run. This would be primarily for fun, but there is certainly the possibility of incredible gains if the crowd piles in.
And if anyone would like to learn more about the crypto space… and the little-known opportunities I’m bringing to my readers’ attention… then you can go right here for more details.
There are many truly exciting projects in this space that do have utility. In fact, some will change the world around us before we know it.
That’s all we have time for this week. If you have a question for a future mailbag, you can send it to me right here.
Have a good weekend.
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.
