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I'm asked frequently about the tech giants we talk about all the time – Amazon, Alphabet, Alibaba and Facebook – because investors finally understand the implications of digitizing everything.
…and that's the one company I want to talk about today.
In a Gold Rush, Sell Both Picks AND Shovels
Most investors are at least passingly familiar with technology investing at this stage of the game, if for no other reason than the numbers around it are so daunting:
… 205 billion emails a day, or 74 trillion emails a year, and 2.4 million a second
… 4 million Google searches conducted worldwide every minute of every day.
… 2.5 million posts "liked" every minute on Instagram.
… 350,000 tweets sent out every minute.
… 6 billion Facebook posts "liked" every day.
More than 2.5 quintillion bytes of data get created every day, according to IBM. To put this into context, that's a 1 followed by 18 zeros and enough data to fill 57.5 billion 32GB iPads.
Only trouble is, that's not the end game. These aren't the heady days of 1999, when you could pick an internet company by throwing a dart across the room and make money.
You've got to be very selective and back up a few steps.
The situation reminds me of the California Gold Rush of 1849 in that very few miners actually hit it rich. That fell to people like Sam Brannan who had a lock on almost every shovel and pick sold to miners lured by the promise of easy money. Millions… back in the day.
Now, it's billions on the line.
Technology is growing so fast companies cannot keep up.
Consider this list of gizmos advertised in 1991 by Radio Shack:
- All weather personal stereo: $11.88
- AM/FM clock radio $13.88
- In-Ear Stereo Phones: $7.88
- Microthin calculator: $4.88
- Tandy 1000 TL/3: $1599
- VHS Camcorder: $799
- Mobile Cellular Telephone: $199
- Mobile CB: $49.95
- 20-Memory Speed-Dial phone: $29.95
- Deluxe Portable CD Player: $159.95
- 10-Channel Desktop Scanner: $99.55
- Easiest-to-Use Phone Answerer: $49.95
- Handheld Cassette Tape Recorder: $29.95
Combined, they'd set you back more than $3,000 – or $5,000 in today's money. Now, you can do all of that with a single smart phone that'll set you back a few hundred dollars at most.
Don't get me wrong, though.
That's not to say companies aren't trying, especially when it comes to high growth, high change industries that require exceptional accuracy and speed to market like medicine, defense, and even financial services… which we'll return to in a moment.
According to McKinsey, just 18% of global enterprises have moved substantially into the digital world and they cannot hire people fast enough to get the job done despite the fact that there are an estimated 18-25 million software developers worldwide and the field is growing by 40% or more a year.
Obviously cloud co…
About the Author
Keith Fitz-Gerald has been the Chief Investment Strategist for the Money Morning team since 2007. He's a seasoned market analyst with decades of experience, and a highly accurate track record. Keith regularly travels the world in search of investment opportunities others don't yet see or understand. In addition to heading The Money Map Report, Keith runs High Velocity Profits, which aims to get in, target gains, and get out clean. In his weekly Total Wealth, Keith has broken down his 30-plus years of success into three parts: Trends, Risk Assessment, and Tactics – meaning the exact techniques for making money. Sign up is free at totalwealthresearch.com.