Dear Reader,
In these pages, we often talk about valuation, go-to-market strategies, and technology companies with unique products and services. Understanding these concepts is critical for us to be smart investors.
But there’s one more element that can change an investment from just “good” to “life-changing.” And that’s exponential growth.
Exponential growth is one of the most powerful forces in technology investing. And it’s not hard to see, if you know what to look for.
We’ve witnessed it in the exponential rise in the processing power of our semiconductors. We’ve seen it in the exponential decline in the cost of genetic sequencing.
And we’ve witnessed exponential growth in the adoption of new products and services like smartphones, e-commerce, and cloud-based applications.
The companies that “rode the wave” of exponential growth in these markets became some of the best investments of the past two decades.
Apple shot up 26,000% in that period. Amazon soared more than 16,000%. And Netflix – on the back of the exponential growth in streaming services – has netted investors close to 44,000%.
A $5,000 investment into each of these companies in the year 2000 would have now grown into a small fortune of $4.3 million.
I mention this because we are at the very beginning of the next major exponential growth story. And like the technology trends of the past, this investment trend will produce incredible returns in the years ahead.
Only this time, I predict it will play out over months and years, not decades.
And that’s why I’m hosting a special investment event tomorrow evening at 8 p.m. ET. We’re calling it “Beyond Exponential.”
There, I’ll reveal the most important growth story of the 2020s. And I’ll show viewers how they can build a million-dollar tech portfolio – from scratch – in today’s market. These are the stocks that every serious tech investor needs to have in their portfolio.
So please join me tomorrow, October 21, at 8 p.m. ET. You can reserve your spot in advance right here.
I promise it will be well worth your time.
Physicists at the University of Rochester just discovered a material that conducts electricity at 59 degrees Fahrenheit with perfect efficiency. That’s roughly room temperature. This is an incredible breakthrough that could change everything about modern electronics…
What we are talking about here is superconductivity.
Superconductivity refers to the ability of electricity to flow through the material without friction. Friction causes heat and results in reduced efficiency in the transfer of electricity.
Historically, we’ve only been able to demonstrate superconductivity at temperatures akin to that of deep space. Clearly, that can be accomplished in a laboratory, but it is impossible to reproduce in a natural environment… unless we’re in space.
It was just last year that we experienced a breakthrough in superconductivity, which was achieved at minus-9 degrees Fahrenheit. That was a major accomplishment, but it’s still far from our goal of room-temperature superconductivity.
If we look at our electrical grid, there’s a fair amount of resistance within the power lines. In fact, we lose about 7% of the electricity produced to heat. That means we must produce more electricity than we need to account for this loss during its transmission.
Ideally, we would want electrical transmission lines to be made of superconducting material capable of functioning at outdoor temperatures.
But it is not just power transmission lines.
There’s resistance within electronic circuits. For this reason, we lose some of the power flowing to our electrical devices to heat as well.
That’s why our computers need fans. And it’s why our data centers need strong cooling systems. This requires us to produce far more power than we would otherwise need.
Once we develop superconducting materials that can work at room temperature, we could redesign the entire electrical grid and all future electronic devices to be perfectly efficient. That would result in a massive reduction of our power consumption.
And that’s especially important today because most of our power is still generated primarily by carbon-based fuels and, to a lesser extent, nuclear fission reactors, which also produce nuclear waste.
We are getting closer to that day. But there’s still some work to do.
The new research has basically solved the challenge of superconducting at room temperature (or very close). But the results were achieved in a highly pressurized environment equivalent to the pressures of about 70% of those at the center of the Earth. That’s impossible for us to recreate in a real-world environment.
There is nuance, however.
Thanks to our advancements in computer processing and artificial intelligence (AI), materials science is advancing at rates that we’ve never seen before. I’m optimistic that we will find new compounds coupled with advanced manufacturing techniques that will continue to get us closer to the goal of room-temperature superconductivity.
Once achieved, the investment opportunities will be unbelievable. The world’s electrical grids will need to be replaced, and every form of electronics will undergo a redesign to take advantage of the new materials.
Last week, we talked about how Waymo is launching a fully autonomous ride-hailing service with no safety drivers in Phoenix. Not to be outdone, Tesla just announced that the beta version of its fully self-driving software will be released this week.
What is unique about the upcoming release is that Tesla chose to rewrite its autonomous driving AI from the ground up. It scrapped its previous version, which was already the most advanced on the planet, and rearchitected the software to perform even better.
Not too many companies would ever do that. When most companies have something that is already the best and still continues to incrementally improve, it is very rare to scrap and rebuild. But that’s why Tesla is such an incredible technology company.
Smartly, it took all of the self-driving data generated from roughly 4.5 billion miles driven by cars using Tesla Autopilot and redesigned the architecture of the entire software code. And I’m absolutely sure that the new software architecture will outperform the “version 1” architecture of Autopilot.
CEO Elon Musk said that he has been using the alpha version of the fully self-driving software in his own car without incident. Musk noted that he hasn’t had to touch the wheel in his alpha tests.
The beta version of the software will be released to Tesla owners who have demonstrated that they are “expert and careful drivers.”
True to form, Tesla will use the data collected from these beta testers to make its new Autopilot AI even better. And that will lead to more improvements in the software over time.
So, history will mark 2020 as the year that gave rise to self-driving cars… just as I predicted back in December of last year.
If any readers drive a Tesla and have access to the beta release of the self-driving software, I would love to hear about it. Please drop me a note at feedback@brownstoneresearch.com.
Readers be warned – we are going to end on a what may sound like a far-fetched topic at first.
Back in 2003, a scientist named Nick Bostrom at the University of Oxford wrote a formal research paper that suggested what we consider reality is actually a computer simulation. In other words, Bostrom’s paper said we likely live in “the Matrix.”
This discussion has raged on within the scientific community for nearly two decades now, and it is a very popular discussion in Silicon Valley. Both Bostrom and Elon Musk feel strongly that it is highly likely we are in a simulation.
And new research suggests that it’s basically a coin flip.
An astronomer at Columbia University named David Kipping created a new model, based on existing scientific research, to calculate the probability of whether we are in a computer simulation. The result?
He concluded it’s a 50-50 chance.
Kipping broke down Bostrom’s dilemma into two options: 1) a reality with no simulations and 2) a “base” reality with simulations.
Here’s what it boils down to…
Advanced civilizations with seemingly limitless computing power will want to simulate complex systems so that they better understand them. We do this ourselves. We test. We iterate. We simulate. Then we go with what produces the best outcomes.
Advanced civilizations will also have the ability to “program” consciousness. In other words, they can program self-aware forms of artificial intelligence… like us humans…
So Kipping’s model gives it a 50% probability that we are living in a simulation created by an even more advanced civilization.
But Kipping stipulated that, if the human race gets to the point where we can simulate consciousness inside a computing system ourselves, then it’s almost a certainty that we are also in a simulation. That ability would essentially prove that we are in some kind of software-driven “matrix.”
After all, once we know that it is indeed possible to simulate life, it would be foolish for us to assume we are the only ones who know how to do it.
I recognize that this is a very uncomfortable topic of discussion. It challenges our most basic assumptions about life and the world that we live in. And it clearly raises a painful question about our purpose in life. If it isn’t real, what is it all for?
I have to say that I lean heavily toward Bostrom and Musk. Their theory is highly probable and based on sound logic. And I am also confident that our race will be able to program consciousness within the next decade, which also argues to Kipping’s position.
But whether this is a simulation or not, this is the life we have to live. So we might as well make the most of it.
And if there is some kind of cosmic justice, I’m going to do my best to be on the right side of whatever future outcome the universe has in store for us.
Regards,
Jeff Brown
Editor, The Bleeding Edge
Like what you’re reading? Send your thoughts to feedback@brownstoneresearch.com.
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.
