Three Founders Publishing released a presentation in which Doug Hill interviews George Gilder to talk about a new investment opportunity that they suggested could be more lucrative than Bitcoin.
The header reads:
“Don’t kick yourself for missing out on bitcoin… what’s coming NEXT could be even more lucrative.”
Mr. Gilder is known for his audacious predictions, especially concerning how the technology sector is going to pan out, and in this one, he believes that there is a big change that will rock the sector. He wants you to invest in it.
In this article, I walk you through the presentation to give you a feel of what the discussion was all about.
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What is George Gilder The Cryptocosm? (The Pitch)
George Gilder thinks that although Bitcoin has been eye-catching over the past few months, it is just the beginning of a much bigger change to the tech world that will disrupt the status quo.
Doug says, and I quote:
“In the next few minutes, he’ll reveal how the rise of bitcoin is actually just the first phase of a much bigger step-change in the tech world…
…one that will soon disrupt – and potentially even destroy – the business models that have made firms like Google, Amazon, Apple, and Microsoft so powerful…
…and in the process, create America’s next wave of trillion-dollar tech stocks.
Today, he wants to give you the chance to claim an early stake in those companies BEFORE that happens.”
He refers to this big step-change that he expects to revolutionize the tech world as “The Cryptocosm.”
And Gilder says that it will make people a lot of money, more than Bitcoin has over the past couple of years:
“Well bitcoin is like the part ABOVE the water – the part everyone can see and try and understand.
Meanwhile the bulk of the iceberg – 90% – is below the water.
Today, I want to take people below the water. Because believe me, there’s a MUCH bigger opportunity than bitcoin here.
We tech enthusiasts call it by a lot of different names. But I call it “the cryptocosm”. And I think it’s going to make people a lot of money…hopefully the people watching at home today!”
As it disrupts the status quo, George Gilder says that “the cryptocosm” will lead to the emergence of a new crop of tech giants that will take over once the tech giants of today are disintegrated:
“George, you’ve actually gone on record on several occasions to make some pretty eye-catching predictions about what the cryptocosm could one day do…
In your last book you said that,
‘Disintegrated will be all the Google, Apple, Facebook [and] Amazon Conglomerates’
But I wonder… when you say “disaggregated”… what exactly do you mean?
GEORGE: Destroyed.
At least, the business models they rely on will be. They’ll all have to adapt or die. As we all do, if we want to survive. My guess is not all of them will make it.
DOUG: And in their place…?
GEORGE: A new kind of company – the businesses at the heart of the cryptocosm. I think some of these firms will be the technology giants of tomorrow.”
One doesn’t just come out and say that the biggest corporations in the market today are going to disappear without explaining. Because, at this point, those giant companies show no signs of ever relinquishing their dominance.
So, why is George confident that they are going to be phased out?
He mentions that since all of them rely on the “wide-open” internet, they will be disadvantaged because the internet is based on a faulty model and the financial model they rely on is also faulty, thus explaining the emergence of Bitcoin (according to Gilder’s viewpoint):
“The internet ITSELF is inherently insecure and porous. It’s a huge design flaw, brought about by the centralization of power and data by Silicon Valley giants and other tech firms.
It’s pretty much the biggest problem in the tech world today.
And it’s part of the reason bitcoin has become so valuable. But only a part. See, in my view bitcoin has risen to prominence because it solves not one but TWO huge problems the world faces.
The first is the wide-open internet that can be hacked, attacked, and distorted at will.
The second is we have a money system that bears almost no relation to the real economy, to real businesses. This much is self-evident. For instance, roughly $6.6 trillion of currency trades take place EVERY DAY. That’s roughly thirty times more than the value of world daily GDP.
Thirty times! There’s all this money whizzing about every day, generating nothing but commissions for insiders. And all this trading doesn’t even result in a stable currency!
So, according to him, the financial system is flawed because it is not based on economic reality and the internet is faulty because it is centralized and insecure (hence susceptible to hacking).
With all that back-drop, what technological step-change is Gilder talking about? He is talking about the Blockchain.
Blockchain is a favored subject among many investment analysts. They see it as an investment opportunity that goes beyond Bitcoin and altcoins (the other cryptocurrencies).
I have reviewed a couple of presentations by investment gurus and some that have elevated blockchain as the most important tech trend include The Global Race For $3.1 Trillion by Michael Robinson and Chris DeHaemer’s End Of Bitcoin Pitch.
Circling back to George Gilder’s version of things, why does he think Blockchain will lead to the demise of the big tech companies of today to be replaced by new ones?
According to him, the Blockchain solves the two problems the current systems have: Centralization and Insecurity.
Blockchain inherently decentralizes the system because every node (the participants of the network) keeps a record of what’s going on in the system. The network is not controlled by a central power.
It also enhances security because the data is not stored in a central location (or a silo) where it can be hacked into and stolen. The data is immutable; this means that the data entered is irreversible and the transactions are permanently recorded and viewable to anyone.
Bitcoin is a good example of this and Gilder expects this to be the start of a new revolution in the tech industry.
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Three Stocks to invest in the Cryptocosm Trend
Since George Gilder’s main concern is to find a way to make money off of this, how does he want you to invest in the Blockchain?
He says that you don’t have to buy “a load of tiny cryptocurrencies.” Therefore, you don’t need to set up a wallet or get verified with an exchange. Instead, you are going to buy shares in small companies with a lot of potential that are driving the new changes.
He has identified three companies that he thinks you ought to consider investing in.
He doesn’t reveal the names of the three but he drops hints as to what they engage in to arouse enough curiosity that you’ll want to invest in them.
The first stock develops Radio-Frequency Identification (RFID) technology:
“One of the top stocks on my teams’ radar right now is effectively building a “blockchain of things”. It’s taking millions – billions – of items all over the globe and giving them a digital identity of their own. And it’s already got some pretty big customers for its technology.
To explain how it works I need to take a quick step back. You may have heard of a technology called radio-frequency identification, or RFID for short.”
“So this company is a world leader in RFID tech. For instance, it worked with a major East Coast airport to electronically tag and track baggage as it moves through security. If you’ve ever had an airline lose your baggage, that’ll be music to your ears!”
“Another quick example. The US Patent Office saved $1.1 million by using this company’s tracking technology to keep tabs on its inventory.”
“And this company isn’t just working with Amazon. It’s also in partnership with another tech giant – Cisco. It’s part of a big data management program Cisco is running.”
Those clues point to a company that has a couple of big clients. But it is not the only one on the list.
The company he is referring to here is Impinj Inc. (Nasdaq: PI). Impinj provided the RAIN RFID solution that was used by the US Patent and Trademark Office in 2016 to reduce manual labor and reallocate tasks more effectively. In doing so, the USPTO saved $1.1 million in asset management costs. Cisco also decided to use its solutions to manage its Data Center IT assets more effectively.
Moving on to the second company on the list, it is in the digital identity and payments industry:
“The second Cryptocosm stock I have for everyone is just as exciting. It’s in the digital identity and payments industry.
In fact, if you’ve ever made a mobile deposit, you’ve almost certainly used this company’s tech. It works with more than 6,400 banking institutions already.”
“So it’s a company with huge pedigree. And it’s growing rapidly, too. In fact in 2020 it breached the $100 million revenue mark for the first time.
One look at its revenue growth over the last decade shows you – this is a VERY fast growing company.”
It has a tech expert who helped develop the Face ID tech in the iPhone 10:
“See, one of the company’s key tech experts used to lead another company that was bought out by Apple in 2016. He actually then went on to build the Face ID for the iPhone 10.
But did he stay in the Apple family of companies? No. He left to join this much lesser known company.”
It has numerous customers already:
“Of course. And this really is RAPID growth. The company already has 7,500 customers. It’s enabled over 4 billion mobile check deposits, totalling $1.5 trillion.
And look. Online, secure payments, linked with a digital identification system – this is a great Cryptocosm stock. It’s a huge opportunity.
Oh, and you can buy shares for less than twenty bucks.”
The company he is referring to here is Mitek Systems (Nasdaq: MITK). Mitek is a market leader in digital identity verification and mobile capture that uses AI. Its technology allows people to deposit checks via their mobile phones and open bank accounts from mobile devices.
It fits the description because it hired Stephen Ritter in 2016 as its Chief Technology Officer. Ritter was SVP Engineering and Research for Emotient, which was acquired by Apple in 2016 (the company Gilder refers to in the presentation). It was also trading at $17 right as I write this hence it is below the $20 mark as well.
Last but not least, we have the third company that works in the transport industry:
“It’s another company that could find itself at the heart of the Cryptocosm before too long. Though from the outside you’d probably never realize that.
See, the company LOOKS like a pure logistics firm. A transport and logistics company.
But recently, it did something a little unusual. It took a seat on the executive board of the Blockchain in Transport Association.”
Those are the only clues he shares about the third stock.
Although those clues are not definitive, the company that he could be referring to here is Transplace Inc. The Dallas-based transport and logistics company joined the board of the Blockchain in Transport Alliance in 2018.
He wrote a report called The Cryptocosm Profit Blueprint: How To Profit From Life After Bitcoin that has the names and details of those three stocks.
To recap, the three companies are:
- Impinj Inc.
- Mitek Systems
- Transplace Inc.
To get a free copy of this report, you have to subscribe to a newsletter called Gilder’s Moonshots.
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Who is George Gilder?
George Gilder is an investment guru who has been actively engaged in the financial services industry for over 50 years.
He has worked closely with two US presidents and is a founding partner in Peter Thiel’s 1517 fund, which supported the creation of Ethereum through its Fellowship program.
He has been referred to as “America’s Foremost Tech Prophet” by The Economist and been lauded by Steve Forbes and Bill Gates for his technology insights. His work has appeared in some well-known publications, including The Wall Street Journal, The Harvard Business Review, just to mention a few.
His modus operandi throughout his career has been making bold predictions about the economic landscape and recommending companies riding those trends. Most of his work – newsletters and books – targets the technology sector and he has made a few predictions that have come to pass.
He now edits newsletters that are published by an independent boutique research firm called Three Founders Publishing. His main newsletter is The George Gilder Report.
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What is Gilder’s Moonshots? (The Newsletter)
Gilder’s Moonshot is one of the investment advisory services published by Three Founders Publishing. It is overseen by George Gilder.
Most of the recommendations are small, high-potential companies that Gilder admits come with increased risk.
By signing up to become a member of Gilder’s Moonshots, they say that you get the full benefit of his experience, his leverage of contacts in the finance industry, and research from his team of financial analysts.
That being said, here is what you get when you become a subscriber:
- Monthly issues of the Gilder’s Moonshots newsletter. These issues come with stock recommendations that could deliver big gains.
- A free copy of the report, The Cryptocosm Profit Blueprint: How To Profit From Life After Bitcoin.
- Access to the Moonshots model portfolio.
- A second free report, Undiscovered AI. This report is about a company based in San Jose, California that has a market cap of $70+ million. It develops voice-driven sensors for hands-free devices and has already secured contracts with military contractors, smartphone makers, the DoD, and Alibaba.
- The chance to attend the next “COSM event” with $500 taken off your entry price.
- Access to the quarterly segment by the veteran analyst called Ask Me Anything with George Gilder.
How much do you pay to join Gilder’s Moonshots?
If you join the newsletter through the link provided at the end of the presentation, you get to pay $2,500 for a one-year subscription instead of the usual $5,000.
Does Gilder’s Moonshots have a Refund Policy?
No, the subscription fee is non-refundable.
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Closing Remarks on George Gilder The Cryptocosm
George Gilder’s presentation about “The Cryptocosm” centers on investing in the Blockchain for those that missed out on the Bitcoin rally. According to him, you can achieve this by investing in companies that are actively bringing the Blockchain to the mainstream.
“The Cryptocosm” is a term Gilder uses to refer to the Blockchain.
He joins a wave of investment gurus who have been calling for people to invest in companies that will benefit from the widespread use of the Blockchain.
The three companies he teases in the presentation are:
- Impinj Inc.
- Mitek Systems
- Transplace Inc.
Many people associate it with cryptocurrencies, and rightly so. However, there are other ways of getting involved and as it becomes a bigger part of people’s daily lives, these investments could pay off. We can’t determine whether Gilder’s stock picks will be profitable but there is a good chance they may.
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