Could This Urgent Play Be as Big a Disruptor as Zoom?
In today’s Money Weekend…what if something else like that was about to happen?…they created businesses that leveraged this powerful new trend…look a little further ahead than everyone else…and more…
‘You never change things by fighting against the existing reality. To change something, build a new model that makes the old model obsolete.’
In December 2019, you could pick up a share in Zoom Video Communications [NASDAQ:ZM] for around US$60.
Less than a year later, it was trading for around US$560.
This is an example of exactly what the excellently-named Buckminster Fuller is talking about in the quote above.
A model that comes out of nowhere to make an old one obsolete.
And makes its earliest investors rich in the process.
What if something else like that was about to happen?
And there were several Zoom-like stocks sitting right under your nose, right now?
Read on because we believe we found some…
In investing, exponential trends usually come at the expense of an older business model.
If you have the foresight to play these trends correctly, early on, the reward can be extreme.
Consider this fact…
Two of the richest people of our time (Jeff Bezos and Mark Zuckerberg) both found a way to exploit a new protocol (the Internet) to change our world.
They didn’t invent the Internet.
But they had the smarts to understand it was a huge change to the world.
So they created businesses that leveraged this powerful new trend.
For example, Bezos said the following when he walked away from a lucrative investment banking job and started Amazon from his garage in 1994:
‘I knew that when I was 80, I was not going to regret having tried this. I was not going to regret trying to participate in this thing called the internet that I thought was going to be a really big deal. I knew that if I failed, I wouldn’t regret that.’
Bezos — now worth US$200 billion — had spotted early on that the Internet was exponential in nature.
Now Mark Zuckerberg is leveling…and going all in…with another exponential bet: the metaverse.
Is he right?
Is he deluded?
Or is the answer somewhere in between?
Believe it or not, the answer to this question could define your own investing returns for the next 20 years or more (depending on how old you are!).
We don’t profess to know everything. Frankly, no one on Earth knows what a fully formed metaverse will look like.
But we do have a good idea — based on a good track record of deconstructing early tech megatrends — of what kind of early investments tend to pay off in these murky start stages.
Hint: they’re not the most obvious ones.
If you want to see which ‘foundation builders’ we think are worth a punt, you need to read our brand new report ‘Metaverse Mania DECONSTRUCTED: A Sceptic’s Guide to Becoming an Early Stakeholder in Web 3.0’.
Picture the Zoom disruption-innovation…
…but times it by 1,000,000
In the pandemic, video conferencing became the textbook example of a disruptive technology.
It was already there pre-COVID…like early versions of the metaverse were…but the pandemic accelerated video conferencing’s acceptance and adoption.
By businesses. By governments. By everyone.
People are already filtering back to offices worldwide.
Our own office here at Fat Tail is doing a tentative call-out for our people to come back to the ‘hub’.
But the great global ‘Zoomification’ is going to produce lasting and seismic effects for decades.
Picture that kind of disruption…
But on a scale that is exponentially larger in every way.
What you’ll see is that most people are looking at the metaverse incorrectly.
It’s not so much a place.
But a time when this disruption reaches its tipping point.
Mark Zuckerberg tried to correct people on this point recently.
This from Business Insider:
‘Computer scientist and podcaster Lex Fridman sat down with the Facebook founder for a two-hour interview and asked him when a large number of people will start to live out the majority of their meaningful experiences in the metaverse.
‘Fridman referred to that point in time as a “singularity moment” for the metaverse, referring to the singularity theory in the world of artificial intelligence, or the time when AI becomes smarter than humans.
‘”A lot of people think that the metaverse is about a place, but one definition of this is it’s about a time when basically immersive digital worlds become the primary way that we live our lives and spend our time,” Zuckerberg told Fridman. “I think that’s a reasonable construct.”
‘He said many already live their lives in the digital world, just not yet in virtual reality.
‘And as far as when that’ll happen, he said that depends on how a lot of different use cases play out, including gaming and social experiences. But for many, it’ll be when the metaverse becomes more vital for people to get their work done and it’s much more widely adopted.’
This is what all the metaverse fuss is about.
On the surface, it’s easy to be cynical about or dismiss.
Certainly, many investors voted against Zuckerberg’s vision earlier this year by hitting the sell button.
But this remains an unstoppable megatrend in motion…
We have just entered a period of gigantic capital influx.
Where there is mania, for sure…but also huge opportunities to buy small stocks that go up very high, very fast. Even in a dicey wider market.
This is a period where the big guns stake their bets, but private capital seeks out startups which could be the big guns of tomorrow.
What you’re seeing today are the very crudest, earliest attempts at the metaverse.
Many of these are in the gaming sphere.
Picture these first metaverse hit outs as kind of like CompuServe, Netscape, and Prodigy in the earliest days of the Internet.
And you didn’t get spectacularly rich buying those primitive investments right at the beginning of the World Wide Web.
The same goes today…
It’s likely the biggest metaverse long-term returns will not come from the early, obvious first movers like Epic, Unity Software, Roblox, and Nvidia. And certainly not Meta (previously Facebook).
Sure, those are the current ‘easy sells’ Wall Street’s shilling using the metaverse tagline. That’s why they’re packaging all the obvious companies up in ETFs.
But our game here is to think a little harder, smarter, and more outside the box than that.
AND look a little further ahead than everyone else…
Editor, Money Weekend