Welcome to our weekly mailbag edition of The Bleeding Edge. This is typically where we answer the questions you ask throughout the week. But today, we’re going to do something a bit different.
On Wednesday, I hosted the Early Stage Investing Summit. It was a town hall meeting where I discussed four bleeding-edge technologies that are poised to change our world.
There was a question and answer section at the end of the presentation. There were more than 850 attendees with questions, so we just couldn’t get to everybody… as much as I would have liked to.
So today, I’m going to tackle a few more of those questions…
And remember, if you have a question you’d like answered next week, be sure you submit it right here.
The technology that will replace your iPhone…
I devoted part of my presentation to discussing augmented reality (AR) and how the technology will likely replace your smartphone. For our first question, a reader is curious about a leading-edge AR company…
Jeff, you mentioned AR technology in your presentation. What do you think of investing in Magic Leap when it IPOs?
Thanks for the question and for attending Wednesday’s event.
Magic Leap is certainly one of the most exciting companies in the augmented and mixed reality space. It’s a company that I’ve been actively tracking since 2014. And it is doing some of the most interesting consumer-focused applications in the world of AR.
The company is still in the very early stages of commercialization. Last year, it released a developers’ version of its eyewear, and this year, it released a consumer version that can be seen at a select number of AT&T stores around the U.S.
I wouldn’t be surprised a bit if Magic Leap were acquired before it goes public. But if it does go public, I’d be looking closely at the valuation of the company. When evaluating any investment, valuation is always a consideration. In a hot market, popular IPOs price way too high, run up quickly, and then collapse.
Often, the smarter approach is to wait for the hype to die down, look for a strong pullback in price, and establish a position at a reasonable valuation. Magic Leap was last valued in 2018 at $6.4 billion… with basically no revenue. It would most certainly be worth even more as it nears a major launch later this year.
This is definitely a company I’ll be following closely, and my readers will be the first to know when it is the right time to invest.
5G networks will span coast to coast…
Next up is a question about the rollout of America’s 5G wireless networks…
Jeff, do you expect 5G services to extend to rural communities in the Midwest like Wisconsin, Minnesota, or Upper Michigan?
A great question. And the answer is certainly… yes. Perhaps an even simpler way to think about this question is this: Wherever we have 4G network coverage today, we can expect 5G coverage sometime in the future.
Already, 5G wireless networks have rolled out to nearly 30 U.S. markets.
And Verizon is set to bring coverage to 20 more cities this year. Here’s a list of those cities (in addition to Chicago and Minneapolis, where the network is already live): Atlanta, Boston, Charlotte, Cincinnati, Cleveland, Columbus, Dallas, Des Moines, Denver, Detroit, Houston, Indianapolis, Kansas City, Little Rock, Memphis, Phoenix, Providence, San Diego, Salt Lake City, and Washington, D.C.
What stands out about this list is that these cities span the map of the U.S. 5G is rapidly expanding to every part of the country.
President Trump actually mentioned this when he spoke about the rollout of 5G networks back in April:
As we are making great progress with 5G, we’re also focused on rural communities that do not have access to broadband at all.
But I have to say, I’ve been talking about broadband for the – for rural America – the farmers and others. They have really been – they just haven’t been treated properly. And now, what we’re doing is we’re making it a priority.
Of course, network coverage won’t be perfect at first. The large wireless operators always focus on building the networks in the most population-dense areas of the country first and then eventually migrate to the more rural areas. They do this because they need to start generating revenue off the 5G networks as soon as possible to help fund the rest of the infrastructure build-out.
The energy that will power the cities of tomorrow…
Our last question is about the fuel used in nuclear fusion…
You mentioned that nuclear fusion would likely power cities in the future. But where will we get all the fuel to power nuclear fusion?
A great question. As I said on Wednesday, nuclear fusion, in the simplest terms, is the energy that powers the Sun.
I predict nuclear fusion will provide the world with an abundant supply of clean energy. And I expect we will see the first net energy production from nuclear fusion in the next five years.
As to the question of fuel for nuclear fusion…
A common form of nuclear fusion takes place by combining deuterium (a stable hydrogen isotope) and tritium (a radioactive hydrogen isotope). Under the right conditions of heat and pressure, the reactor creates helium along with neutrons and a lot of energy.
What’s important to understand is that deuterium – one of the key ingredients – occurs naturally. You can find it in a glass of water. Tritium requires a bit more work, but it can be derived from lithium. Lithium, therefore, is the most limiting resource in these reactions.
But according to the U.S. Geological Survey, there are about 30 million tons of potentially extractable lithium deposits on earth. That is enough to sustain the world’s current rate of energy consumption for the next 10,000 years.
At an individual consumer’s level, a few tablespoons of water and the amount of lithium in an average smartphone contain enough deuterium and lithium to provide enough energy for 10 years. That’s how powerful nuclear fusion is as an energy source.
One of the most incredible things about nuclear fusion is that the fuel is abundant and cheap. Almost all of the fuel comes from hydrogen, the most abundant element in the universe. Better yet, in addition to being carbon-free, there is absolutely no long-term radioactive waste produced from a nuclear fusion reaction (which is completely different than nuclear fission).
And in some forms of nuclear fusion using hydrogen-boron fuel, there are zero radioactive emissions. It’s hard to beat that.
That will do it for this week’s mailbag. Remember, if you have a question you’d like answered, then address it to me right here. I’ll do my best to get to it next week.
Editor, The Bleeding Edge
P.S. There is one more question that kept coming up again and again: Will there be a replay of Wednesday’s presentation? The answer is yes. I asked my publisher to keep the video up for a limited time. But it’ll only be up for a few more days. So go right here if you’d like to view the presentation.