Grab Your Share of This $231.9 Billion Industry with These Coronavirus Scam Defense Plays

You are likely unfamiliar with the plight of Frank Krasovec - it got very little traction.

He is hardly a household name. Frank Krasovec serves as the chair of Dash Brands Ltd. The privately held firm owns Domino's Pizza franchises in China.

Krasovec was the victim of financial fraud, costing him nearly half a million dollars. According to a recent report in The Wall Street Journal, he was the perfect victim.

The short version: Krasovec took on a $1 million personal line of credit from a local bank in 2018. He went on a business trip a few months later.

When he got back, he was stunned to learn that $450,000 of his money had vanished. Hackers had used his e-mail address to get an unsuspecting employee to send them that amount by wire transfer.

I'm bringing this up now because often in times of crisis, hackers get to work. We may see them coming at us with phishing e-mails seeking donations to help those stricken with the virus when, in reality, they want to rob us blind.

The privately held cybersecurity company, Agari, issued a warning in late 2018 about California wildfire e-mail scams. The e-mails purported to come from corporate executives asking employees to make donations, which were actually intended to fatten the bank accounts of hackers.

In other words - you should also be extra cautious about your online presence, especially your e-mails and credit card accounts.

There's also an incredible opportunity here for cybersecurity. This marks a moment for the sector to become even more vital to our existence now that millions have shifted their lives online.

For investors... there's a way to cover the entire waterfront of this sector with one single investment, set to outperform the market for years to come...[mmpazkzone name="in-story" network="9794" site="307044" id="137008" type="4"]

A Modern Threat

I can really sympathize with Krasovec's plight. My wife and I have had our bank accounts hacked several times.

I recently had to replace my Visa card after cyber thieves grabbed the number from a gas pump where I filled up on the way back from a ski trip.

All of our accounts were considered breached back in the infamous Equifax Inc. (NYSE: EFX) network intrusion that broke in the fall of 2017.

You may recall that e-mail addresses and sensitive financial data for as many as 147 million were breached in that hack, including those for my wife and me.

This is one of the reasons why we have since frozen our credit. That way, no one can run a credit check on us or seek to get funds without our express approval.

I'm thinking maybe Frank Krasovec should have done the same thing. The problem is, like so many of us, he traded convenience and access to money for an increased risk of theft.

If this were an isolated case study, I wouldn't be spending so much time on it. But the fact remains that cyber thieves continue to be very creative in how they go about stealing your hard-earned money.

These days, they use new-school hacks for e-mail addresses. They then combine that with access to decades-old wire transfer tech.

It's a cybersecurity trend that's really on the rise. The FBI says the amount of money stolen in this manner jumped 38.5% last year.

The 2019 reported damages came in at $1.8 billion. That compares with $1.3 billion the year before.

On a global basis, the figure is stunning. Between June 2016 and July 2019, the total damages come in at $26 billion.

According to a March 20 CNBC article, "More than one-third (36%) of executives on the CNBC Technology Executive Council say that cyberthreats have increased as a majority of their employees work from home, according to a CNBC flash survey conducted this week that included responses from 33 out of 157 members of the Council, who serve in senior technology positions at large companies, as well as at government and nonprofit organizations. One respondent said their organization has seen phishing and other cyber scams rise 40%. Some experts say the level of cyber risks is likely even higher than the survey indicates."

And as the FBI data makes clear, these scammers will use any pretext to gain access to your accounts, often by using fraudulent e-mail addresses.

The coronavirus challenge is not short-term. It's part of a larger trend that is expected to continue for years to come. Ditto for the overall world of hacks and cyber intrusions.

Cybersecurity Ventures predicts that cybercrime damages will hit $6 trillion annually by 2021. That's double the figure from 2016.

And MarketsandMarkets says that sales for the cybersecurity sector in 2018 were worth roughly $137.8 billion. By 2022, that figure will hit $231.9 billion, for a compound annual growth rate of 111%.

On the Front Lines

Now you know why I continue to recommend the ETFMG Prime Cyber Security ETF (HACK). It holds more than 50 stocks that cover the entire field. Debuting in November 2014, HACK was the first true cybersecurity-focused ETF and is poised for a strong 2020.

The fund holds several firms that cater to big corporations and government agencies. Think old guard members like Cisco Systems Inc. (NASDAQ: CSCO), the fund's largest holding, and NortonLifeLock Inc. (NASDAQ: NLOK), formerly known as Symantec Corp.

But HACK also holds some of the industry's lesser-known, more aggressive growth firms. Take a look.

CyberArk Software Ltd. (NASDAQ: CYBR) is a fast-moving firm focused on helping organizations prevent privileged account hacks and cybercrimes. Just as it sounds, privileged accounts give IT works access to critical computer systems. By hacking these accounts, intruders can steal and destroy data, launch malware, and install backdoors for future spying.

Palo Alto Networks Inc. (NYSE: PANW) delivers a broad suite of next-gen firewalls and a range of security features for enterprises that need to protect their IT systems and data. The company says it can protect hacks launched through mobile devices. And that is really valuable in today's landscape, where companies let their employees use their personal phones for work.

Zix Corp. (NASDAQ: ZIXI) offers one of the best ways to encrypt software applications, particularly including one of the most critical of all - e-mail.

This is an emerging sector that Allied Market Research says will grow by 14% a year through 2020, when it will be worth some $2.2 billion. The firm boasts 20,000 clients.

ProofPoint Inc. (NASDAQ: PFPT). Eric Hahn launched the firm in 2002 with little fanfare. But the former chief technology officer (CTO) of Netscape, a firm that pioneered the field of web browsers, was really on to something. Proofpoint first focused on e-mail threats and has been steadily branching out to cover a wide range of services.

While it's not immune to the big sell-off we've been going through, HACK has a history of beating the broader market.

To filter out the impact of the coronavirus slamming nearly all stocks, I compared HACK and the S&P 500 from the beginning of 2018 through Feb. 21 of this year.

During the period, the S&P 500 was up 18.2%. By contrast, HACK more than doubled that with gains of 39%.

Add it all up, and you can see that HACK is the kind of investment that targets a massive tech trend.

Even better, it offers savvy tech investors outsized gains for many years to come.

And in the meantime, be sure to check out this one opportunity that touches practically any industry you can think of.

You see, my colleague Tom Gentile has been tracking this little-known market for the last 22 months - and I've never seen anything like it.

There are hundreds of these opportunities being traded every day. And absolutely anyone can capitalize on them. So today, Tom's going to blow the lid off this thing - and show you how you can pocket gains like 473%, 631%, even 933%...

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About the Author

Michael A. Robinson is a 36-year Silicon Valley veteran and one of the top tech and biotech financial analysts working today. That's because, as a consultant, senior adviser, and board member for Silicon Valley venture capital firms, Michael enjoys privileged access to pioneering CEOs, scientists, and high-profile players. And he brings this entire world of Silicon Valley "insiders" right to you...

  • He was one of five people involved in early meetings for the $160 billion "cloud" computing phenomenon.
  • He was there as Lee Iacocca and Roger Smith, the CEOs of Chrysler and GM, led the robotics revolution that saved the U.S. automotive industry.
  • As cyber-security was becoming a focus of national security, Michael was with Dave DeWalt, the CEO of McAfee, right before Intel acquired his company for $7.8 billion.

This all means the entire world is constantly seeking Michael's insight.

In addition to being a regular guest and panelist on CNBC and Fox Business, he is also a Pulitzer Prize-nominated writer and reporter. His first book Overdrawn: The Bailout of American Savings warned people about the coming financial collapse - years before the word "bailout" became a household word.

Silicon Valley defense publications vie for his analysis. He's worked for Defense Media Network and Signal Magazine, as well as The New York Times, American Enterprise, and The Wall Street Journal.

And even with decades of experience, Michael believes there has never been a moment in time quite like this.

Right now, medical breakthroughs that once took years to develop are moving at a record speed. And that means we are going to see highly lucrative biotech investment opportunities come in fast and furious.

To help you navigate the historic opportunity in biotech, Michael launched the Bio-Tech Profit Alliance.

His other publications include: Strategic Tech Investor, The Nova-X Report, Bio-Technology Profit Alliance and Nexus-9 Network.

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