Colin’s note: Happy New Year, everyone. As we enter 2024, my team and I are feeling optimistic about the opportunities that lie ahead…
Which is why we’re wrapping up our “best of The Bleeding Edge” series with this issue we published back in late October.
Thanks to innovations in technology, the American Dream is in reach for many once again.
In the wake of the pandemic, there came an awareness that America’s over-reliance on goods from outside our borders is a weakness… And the move to re-shore manufacturing has become critical.
Fortunately, tech innovations like artificial intelligence, virtual and augmented reality, and blockchain are paving the way to bring U.S. manufacturing back home…
And that means plenty of opportunities to profit ahead…
The American Dream is a simple idea…
We can improve our standard of living through hard work and ingenuity.
For decades, people across the globe were drawn to that dream.
America was the land of opportunity… a place of abundance. A nation where dreams of a better life came true.
But starting in the 1980s, U.S. corporate bosses started whittling away at that dream.
In the pursuit of higher profits, they shifted manufacturing to lower-cost locations around the world. In the process, they shipped hundreds of thousands of jobs offshore.
The reward?
Cheap, foreign-produced goods.
But the Covid-19 pandemic brutally exposed the risks of offshoring.
Vital components for smartphones, consumer electronics, cars, trucks, and industrial manufacturing lines were suddenly unavailable.
A company’s entire product line could be delayed if just a single component was held up in a foreign manufacturing facility or port.
This was the wake-up call America needed. Now manufacturing capacity is coming back to the U.S. And it’s happening thanks to a raft of breakthrough technologies – some of which should be at the top of our list as tech investors.
And don’t just take my word for it. That’s the message of the recent survey by Forbes and veteran pollster John Zogby.
It’s called the American Manufacturing Resilience survey. And it takes the pulse of 150 leading U.S. manufacturing companies every quarter.
The most recent survey shows that 76% of the companies are reshoring some or all of their overseas facilities or are in the process of doing so.
That’s up from 48% of companies that said they were in the process of reshoring in the third quarter… and just 35% of CEOs who were reshoring in the second quarter.
And this “reshoring” is happening thanks to advanced manufacturing technologies that include artificial intelligence (AI), virtual and augmented reality, and blockchain. It’s the digital ledger technology behind Bitcoin and other cryptocurrencies.
By driving down costs, these technologies are allowing manufacturers in the U.S. to finally compete with the cheaper labor of their overseas rivals.
We’ll further explore how these technologies are bringing manufacturing home in future dispatches. Today, I want to focus on another technology making the reshoring trend possible – 3D printing.
3D printing allows companies to make complex components with minimal waste.
Instead of injection molding or other common manufacturing techniques, 3D printers build objects layer by layer. This allows for intricate designs that would be difficult or impossible to produce otherwise.
3D printing also allows for rapid prototyping and on-demand production.
And companies don’t need to fork out money on specialist tools and molds. All they need to do is create a digital rendering of the product they want and the 3D printer does the rest.
But that hasn’t translated into profits for investors.
As regular readers know, I believe it’s more important to be right about an investing trend than early.
Many fascinating new technologies cross my desk every week. But just because they’re interesting, doesn’t mean they make good investments.
In fact, being too early can have devastating effects on your wealth.
The performance of the 3D Printing ETF (PRNT) is a case in point. It holds a basket of 54 leading stocks involved in the 3D printing industry.
But despite the promise of this new technology, the performance of this exchange-traded fund (ETF) has been dismal.
Over the past five years, it’s down 7%. That compares to a 65% gain for the blue-chip S&P 500 over the same time.
It’s no wonder why investors are turned off by 3D printing stocks.
But that’s why the convergence of manufacturing in the U.S. combined with new technology is so exciting.
Investors burned by being too early to the 3D printing craze will steer clear of the sector. This allows more patient investors to profit as 3D printing matures and finally takes off.
You see, the high cost of manufacturing large quantities of items using 3D printing has held the industry back.
It’s simply not cost-effective, or fast enough, for most use cases.
But one startup that I’ve had my eye on is closing this gap. And the world’s most sought-after chipmaker, Nvidia, has just invested.
Nvidia is best known for making chips that go into AI systems, high-performance computers, and gaming consoles.
What’s less well-known is that the company also has a venture capital arm, NVenture.
It invests in startup tech companies with an eye on building long-term partnerships with them.
And it just led a round of investment that values a 3D metal printing company, Seurat Technologies, at about $350 million.
And it’s a direct play on the reshoring trend.
Seurat is bringing costs down to mass-produce products made out of metal using a unique 3D printing technique. Here’s a clip of it at work…
Seurat printing parts from metal
Source: Seurat Technologies
The company claims it’s on track to cut the cost of making metal items such as knives and forks to below what it costs to make them overseas.
Already the company says its technology is 10 times faster than other 3D metal printing methods. And it aims to be 100 times faster than the competition in 2025.
Seurat will “go public” and list its shares on a stock exchange as soon as 12-18 months from now.
That tells me 3D printing is set for a new surge in investment interest as it goes from a fad investment to a key role in the reshoring trend playing out in the U.S.
And thanks to the drastic underperformance of 3D printing stocks lately, it won’t be the only opportunity to profit. This technology helps make U.S. manufacturing competitive again.
You can’t invest in Seurat Technologies yet. It’s still in private hands. But you can get broad exposure to this trend through the 3D Printing ETF (PRNT).
Its top holdings include Materialise NV, Protolabs, and Nano Dimension.
Materialise makes software and 3D printers that are used in healthcare and manufacturing. Protolabs is an on-demand prototype and production 3D printer. And Nano Dimension builds 3D printers to make electronics.
Just remember that PRNT will contain losers as well as winners in the 3D printing sector. And it charges an annual fee of 0.66%.
If you’re a Brownstone Research subscriber, look out for more from the team and me on this trend. We’re researching the best 3D printing stocks to invest in. And we’re focusing on companies leading the way with 3D printing to bring manufacturing back to the U.S.
But whether you invest in this trend or not, you must understand the big picture here.
With rising inflation, broken politics, and haywire financial markets, it may seem like the American Dream is dead.
But just like the boom of the Reagan years followed the inflation-ridden bust of the Carter years, it’s about to come roaring back to life.
This isn’t the American Dream of your grandparents.
It’s a new dream for a new age. It’s rooted in the same values of hard work and optimism, but it will happen thanks to breakthroughs in modern technology.
One thing I am certain of as we move into this new age… It’s a dream worth investing in.
Regards,
Colin Tedards
Editor, The Bleeding Edge
The Bleeding Edge is the only free newsletter that delivers daily insights and information from the high-tech world as well as topics and trends relevant to investments.
The Bleeding Edge is the only free newsletter that delivers daily insights and information from the high-tech world as well as topics and trends relevant to investments.
