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Steve Harmon - Is There An End To Amazon? Crypto and Other Updates

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Quick trip thru tech
 

Steve Harmon

February 19 · Issue #28 · View online
Beyond the hype, inside the world of venture capital, tech, stocks and trends, from Silicon Valley to Shanghai, from veteran investor and entrepreneur Steve Harmon - followed by many leaders in finance and tech, see more: http://steveharmon.com

Quick trip thru tech

It is always with some amusement that I look at the tech landscape and see how gadgets and devices have invaded so many of our lives. Awhile back I wrote about Amazon.life and how the giant smiley box company was one of 3 tech behemoths trying to take over your living room, car and life.
Well, a couple of years later and here it is. In 2019 Amazon said it had more than 100 million Alexa devices sold. That’s just under half of all homes in the U.S.
In 1997 just before it’s IPO I recommended Amazon stock, saying it was the Wal-Mart of the Web. The thing is as this company grows I have to re-up the target and slogan: Amazon is now more like a constant digital buddy waiting for you to buy, beck or call on.
Buried in Amazon’s value is a Netflix-like company (Prime Video), a cloud company like Salesforce (AWS), a computing giant like IBM, a software operating system like Windows/Azure (Amazon Cloud and Kindle) and much more.
If it spun out any of these the value could be 50% more for any one of them.
The key factor is scale. It’s not something many grasp. We are in unprecedented waters here. The computing power alone is like having King Arthurs sword. Swing it at any target and it destroys the competition.
I don’t think Amazon will be defeated by any ONE company. Google is the closest but lacks commerce and therefore customer intimacy thru actual purchase data.
Corona Virus
And then there’s the coronavirus. I believe the stats aren’t reflective of the true impact yet. Why? it’s almost impossible to quantify a virus except by reported cases. That only counts those who check in, not those wandering around.
Medical supply companies suddenly got important. Mask makers, hand cleaners, disinfectant suppliers. For years now in Japan it has been a custom to wear a face mask if you have a cold. I believe that custom may become a new norm in many other countries following the corona virus outbreak. Why? people are getting smarter.
Here are the top mask makers for investment seekers:
3M
Honeywell
UVEX
Bei Bei Safety
Moldex-Metric
DACH Schutzbekleidung
I could easily see mask sales going up 500% to 1000% now annually.
Crypto
I believe we’re starting to see a sorting out in crypto after the greed rush of 2017/18 and all the hype. As I said back then application is the key. Who’s using it?
Where many of these guys have failed so far is application. Ripple (XRP), which I own, has made some strong inroads with banks and cross-border exchange. Real world application.
But I believe it has to do more, much more. Their thinking is still bound by the box of the past. I’m going to be in touch with them about some new ideas, especially in the area I am building a venture in: real estate.
I see some potential in Bitcoin, Ethereum and EOS also. But nothing that was me yet.
Market caps and limited thinking
A lot of the financial media focuses on market caps and who surpasses a $trillion or so. I believe that kind of thinking misleads the investor. Multiple of sales and income is much more valuable to watch.
The thing they don’t understand is scale. Digital scale is unlike anything in the history of investing. I wrote about it 20 years ago and some understood. Most didn’t.
The same applies in crypto. All of these guys are tracking market caps of currency or tokens as if that is the key indicator. It is almost meaningless to me. Yes, the float matters. But I think they’ve mislabeled the float as ‘market cap’ … it is not the market cap, it’s the float.
And when you see it as the float then the metric to observe is APPLICATION of the currency or token. Application will drive the multiple. Not the market cap. Can we now see that it’s actually the float?
Invest $10 million to go after a $90 billion market
It’s funny how an industry calling itself ‘venture’ capital acts more like a bank and loan company. A lot of venture capitalists – some of the world’s top ones, in fact – are my friends.
Yet from an objective viewpoint (outside the kool aid) I see an industry locked up in risk aversion. They are run like banks, not investors. In doing so they miss the moonshots. The mars shots too.
At this point I am considering raising up to $10 million to change the entire real estate industry, which in the U.S. generates annually $90 billion.
From our group of angel investors we have built the platform and mobile applications already. Now it’s time for launch and expansion.
The right people always get it. The others never did.
Best and regards,
steve
steveharmon@gmail.com
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