- One reader wants to be the next Six Million Dollar Man
- I worked for this company for years. Here’s why I don’t recommend its stock…
- Bitcoin vs. the U.S. Dollar. Which side are you on?
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.
But before we get to our questions, we have to discuss something else first…
They are coming back, and apparently, they are coming back quickly.
The U.S. jobless rate fell to 13.3% in May. This came as a surprise to most, including me. Given the slow rate of economic opening around the country, I didn’t expect to see these kinds of numbers until the third quarter.
This is fantastic news for everyone.
It is also great news for the stock market and investors. As I write this, the S&P 500 is only down 5.5% from its all-time highs back in February. Incredible.
And we have more positive news to look forward to. By the fourth week of June, pretty much the entire U.S. economy will have opened up. Yes, restrictions will be in place, and many of us will still be working remotely, but we’ll be back to business.
I’m even more optimistic about the second half of the year than I was before.
I’ll continue to update readers as things develop. But for now, let’s turn to our mailbag…
Readers are ready for bionic body parts…
On Monday, I wrote about researchers who had developed a bionic eye using bleeding-edge technology. This bionic eye could one day be used as a replacement for an eye that was damaged from injury or disease.
Even more amazing, this bionic body part can have better resolution, depth, and light sensitivity than our human eyes. It can even see in the dark.
I was curious about what readers thought of this development. Would any of us consider “upgrading” to a bionic eye? I received a flood of responses from readers…
Once tested, I’d use one eye with a bionic system. I’m getting cataract surgery soon. Why wouldn’t I like something that would last and provide better short- and long-distance vision?
– Patrick H.
The bionic eye is fascinating because, finally, engineers have the capability to collect visual data on at least the resolution of the retina vs. the humbling 100×100 chips previously used that only produced blotchy light representations of what was being looked at. My question, and I think perhaps the most difficult part, is how will these visuals be interfaced/mapped with the organic brain?
– James B.
Hi, Jeff – thanks for your superb research and insights. After having six surgeries on my left eye due to an “unfortunate” original surgery for a simple detached retina, my resulting vision is debilitating. Spacial acuity, depth perception, and balance are a constant issue. I would sign up today for a new eye, believe me! Once they have some experience, I’ll be first in line!
– Elaine B.
Thanks for this incredible information. Vision is such an important part of our daily functional enjoyment. Without it, we would not be able to enjoy the magnificent varieties of what nature (God’s creation) has to offer. If the bionic eyes can offer such enhanced vision, I would gladly volunteer to replace my current visual instrument.
– Ray P.
Very intriguing. My interest would be regarding macular degeneration, as eight out of nine of my mother’s siblings had it. Mom was almost blind due to it being in both eyes. I guarantee she would have done it, and if I was at that point, I would too.
– Dennis S.
Not only normal sight but bionic!!! WOW! Will NOT be even in our organization’s “budget,” but several organizations… in the FUTURE!! Awesome!
– Jeanne L.
Hi Jeff, I am a pretty new subscriber. And I love reading everything you write. I think I’ve learned more about the tech world and, of course, biotech since I’ve been a member than in my entire life. And I’m 60 years old.
I was reading your article about The Six Million Dollar Man and his bionic eye; I never missed an episode. I was born with poor eyesight in general but also legally blind in my left eye. I have wondered what it would be like to have peripheral vision and, of course, vision in general in my left eye and much better vision in my right.
The answer to your question, would I have the new bionic eye replace my blind eye? Not yes. But hell yes. I would do it first thing in the morning. Thank you for everything,
– Gerald D.
I’ll take one bionic eye, a bionic heart, liver, kidneys, knees, ankles, biceps, wrists, ears, and feet, please. I am happy to take the cognitive brain enhancement as well. Let’s do this.
– Devin S.
Thanks to everybody who wrote in. I really got a kick out of all of the responses, and these are just some of them.
It’s great to see so many readers engaged with the bleeding-edge technology we cover. It sounds like several readers are game for a bionic eye. Devin, sounds like you want to be the next Six Million Dollar Man.
In all seriousness, the desire to enhance ourselves with technology, whether out of necessity or the desire to improve our capabilities, is more prevalent than ever before. We’ve covered many different aspects of it extensively in these pages: from synthetic blood… to bionic limbs… and even brain-computer interfaces.
And, of course, genetic editing technology can be used to literally change and improve our own genetic makeup. Some of the most interesting work is being done right now on mapping human DNA to our phenotype. Understanding exactly what segment of DNA is linked to cognitive ability would have profound implications.
To James’ question, the most likely way to connect the bionic eye to our brain is by implanting a multi-electrode array that is connected to the nanowires directly into our visual cortex.
Believe it or not, this has been done successfully in early 2018 in a study with blind mice. It won’t be long before this technology is implemented in a human brain.
Here’s my opinion on my old employer…
Next up is a question about one of my old employers and my thoughts on the company’s prospects…
Hi, Jeff, I would appreciate your opinion regarding Qualcomm, which reached $84 today. In your opinion, is there considerably more upside and how much would you think? I have held it for only a few months but already made over 30%! Thanks so much!
– Carl R.
Hi, Carl. Thanks for your question. As you likely know, I can’t give personalized investment advice. What you invest in is entirely your decision. But I can give all readers my opinion on Qualcomm and what I think of it as an investment.
I worked as an executive at Qualcomm for three years (2005 to 2008). I was the head of global strategy and development for a division of the company at the time.
It was stimulating work that had me traveling to every part of the world, working with the top wireless network companies… broadcasting and multichannel pay-TV companies… national broadcasters… and government regulators.
Back then, the world was struggling with the limitations of 3G wireless technology and getting ready to upgrade networks to 4G.
This reminds me a lot of what’s happening right now as the world is dealing with a similar challenge with 4G and migrating to 5G technology.
Qualcomm has fantastic wireless technology and produces great semiconductors, but that doesn’t necessarily mean that it’s a great investment. Here is what I don’t like.
During the last 10 years, Qualcomm has generally traded in a band between $50 and $80 a share. That’s it.
If investors timed it perfectly and bought Qualcomm at $48 in September 2011 and sold it today, they would be sitting on an 82% return on their investment… one that took nine years.
That’s just not an attractive return over that kind of timeframe for my subscribers. Many stocks that I have recommended across my investment research have gone up that much in nine months, nine weeks, and occasionally just nine days.
And take semiconductor company NVIDIA as a comparison. Back in 2011, the company was trading around $16. I recommended the company at $24 in early 2016. NVIDIA now trades at $357 today. That’s a 1,387% gain in roughly four years. Which of the two companies would we prefer to invest in?
Aside from the obvious lack of investment returns, other reasons give me pause about Qualcomm.
The company has failed for the last two decades to grow into new areas of the semiconductor industry… or any other industry, for that matter.
It has spent billions on acquisitions over the years and failed to integrate and capitalize in any meaningful way on the companies that it acquired.
We can see it in the numbers.
2019 revenues of $24.2 billion were below 2013 revenues. And this fiscal year’s revenue will likely be about the same as 2012. Ouch.
Yet the Qualcomm executive management team happily pays itself some of the highest salaries in high tech.
And one of the biggest weaknesses of the company is that its “power” to extract licensing revenues from the industry continues to decline. Again, we can see it in the numbers.
In 2015, Qualcomm’s licensing revenues from its CDMA (code-division multiple access) patents generated about $7.9 billion, comprising 31.4% of Qualcomm’s total revenues. In its 2019 fiscal year, that number had dropped to $4.6 billion, making up 23.5% of its revenues.
These numbers will continue to decline. With every successive generation of wireless technology, Qualcomm’s patent position weakens further.
And right now, Qualcomm is trading at the very high end of its valuation over the last 10 years.
I probably gave readers a bit more information than they were expecting, but I hope it’s useful.
Congratulations on your gains, Carl. But I won’t be recommending Qualcomm anytime soon.
I’m going to stay focused on investment opportunities that have triple-digit or quadruple-digit investment returns in all of my investment research publications.
The battle between bitcoin and the U.S. dollar is getting closer…
I know you don’t do a lot of coverage on cryptos or blockchain, but maybe you should. The question I have that you might be able to answer is about the reward structure of blockchain.
My understanding is that cryptos such as Bitcoin reward the keepers of the blockchain with coins that are “mined” by solving complex computational problems or by “proof of stake.”
Now I am hearing that companies and governments are looking to blockchain as well, to create their own digital currency versions or to facilitate business transactions. How are these institutions able to encourage enough people to keep their own versions of these government or company blockchains?
What is in it for people, and what happens if the rewards are not great enough and the blockchain does not have enough nodes to guarantee a truly decentralized network? And is there opportunity for individuals to “rent out” computer power to corporations to maintain a part of their blockchain networks?
– David D.
Hi, David. Thanks for writing in. You’re right. I haven’t spent as much time recommending cryptocurrencies.
But I have focused on blockchain technology and the public companies that are benefiting from developments in the blockchain industry. I have quite a few companies in my portfolios that have been beneficiaries of this trend.
I’m also constantly publishing insights on these topics in The Bleeding Edge. On Wednesday, I published a story on Amazon’s plan to implement a blockchain to better monitor the supply chain for goods sold on its platform.
I’m also a member of the Chamber of Digital Commerce, an advocacy group for the blockchain industry. So I am involved in this space, and I regularly publish insights on interesting developments.
In fact, I warned my readers to avoid the cryptocurrency market back in late 2017, predicting that things were going to get bad – the digital asset market was clearly in bubble territory. It collapsed in the months after that.
And anyone who invested around that time lost at least 80% of their investment. Most lost more than 90%.
I saw a worsening regulatory environment for cryptocurrencies and declining capital formation through ICOs (initial coin offerings). That was the real warning sign. And there was fraud everywhere in the industry. The Securities and Exchange Commission is still pursuing blockchain projects left and right, working hard to clean up the industry.
When I see the market making a turn and the risk/reward profile makes sense, with enough great investment opportunities for my subscribers, then I’ll begin publishing more research in the space.
But as for your question…
Yes, it’s true that decentralized blockchains (like Bitcoin) reward “miners” for maintaining those blockchains.
At a very high level, transactions on these types of blockchains are “confirmed” and have to be “written” into the ledger by these miners. This method is called consensus. And once consensus is reached and a new block is written into a blockchain, it becomes immutable – it cannot be changed – unless one person or group of people control more than 50% of the network.
For their work, the miners are rewarded with a small amount of the cryptocurrency associated with that blockchain.
It’s also true that governments and large companies are planning to launch their own digital assets.
I’ve been following this trend for a long time.
At the end of 2019, I predicted that 2020 would be the year we saw state-issued digital currencies. In May of this year, I shared an update that showed Visa was preparing for a digital payment system with digital fiat currencies. So that prediction is panning out.
Also, back in 2019, I predicted Facebook would release the whitepaper for its digital currency, Libra on June 18. That’s precisely what happened. Much of the mainstream press had reported that Facebook wouldn’t release the whitepaper until 2020 and that the digital asset would be called “Global Coin.”
But there’s a key difference between a digital asset like bitcoin and a cryptocurrency issued by Facebook or the U.S. government.
Bitcoin is designed to be decentralized. No one entity has control over the blockchain.
But a digital version of a fiat currency that uses blockchain technology will not be decentralized. It will be a centralized, permissioned blockchain that will be completely controlled by only one party – most likely, the central bank of any given country.
There will be no mining, and there will be no rewards. The purpose of a blockchain like that is simply to act as a ledger of all transactions.
In the case of the U.S. digital dollar, this would allow the government to do some interesting things.
It could deposit COVID-19 stimulus checks directly into our digital wallets, for instance.
And removing paper money entirely from the system would “force” all consumers to transact on one single platform, using only a digital version of the U.S. dollar. This would allow the government to track and tax every single transaction. The IRS would have a heyday.
I’ll continue to cover blockchain technology in The Bleeding Edge and my other research. I haven’t given up at all. This space has incredible promise, as do digital currencies and digital securities.
In fact, I have been working on something really special for my subscribers along those lines. I can’t say anything right now, but I’ll have some exciting news in the coming weeks to share.
That’s all the questions we have time for today. If you’d like to ask a question for next week’s mailbag, write to me here. I’ll do my best to tackle it next week.
Editor, The Bleeding Edge
P.S. Blockchain technology will revolutionize our society the way the internet did more than 20 years ago. Smart investors stand to make a small fortune over the next few years.
But 99% of investors are so distracted with bitcoin and Facebook’s Libra that they are missing the bigger picture. You don’t have to be one of them.
I’ve uncovered a way to profit from the blockchain megatrend without ever downloading a digital wallet or logging onto a cryptocurrency exchange. Click here to see how.
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