7investing Team Podcast: The Hidden Gems Not Making the Headlines | 7investing
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7investing Team Podcast: The Hidden Gems Not Making the Headlines

January 28, 2021 – By Simon Erickson

There are a lot of headlines flying around in the media right now.

There are opinions about Joe Biden’s performance in his first week as the incoming American president. There are others about what you should think about Bitcoin’s recent price surge. Twitter’s top news story this morning alerted me that Arnold Schwarzenegger has now received his COVID vaccine. And I hope you’ve gotten a chance to see the memes of Bernie Sanders at the inauguration.

While these headlines may give us a chuckle, they don’t offer a lot of substantial material for investors. Important investing stories often just don’t provide enough of a dopamine rush to warrant including on the front page.

But as 7investing advisors, part of our mission is to find and call attention to those important stories. And then explain the impact they will have for long-term, buy-and-hold investors.

In our January 7investing Team Podcast, our advisors discuss underappreciated stories that aren’t making the headlines, but that long-term investors should be paying more attention to. We also discuss the companies who could be the most likely winners from these developing trends.

As an added bonus, this episode includes a rare collection of Dad jokes and bad banking puns (please send any complaints to info@7investing.com).

Publicly-traded companies mentioned in this podcast include AMD, Five Below, Guardant Health, HDFC Bank, iRobot, and New Providence Acquisition Corp. 7investing’s advisors may have positions in the companies that were mentioned. 

Timestamps:

00:00 – Introduction: The quest for hidden, long-term investing trends

00:56 – Simon: Semiconductor M&A

03:46 – Maxx: The bigger-picture impact of genomics

09:12 – Austin: Cellular connectivity gaps

13:28 – Dan: Bricks & mortar retail

19:42 – Matt: Financial inclusion

23:53 – Steve: Smart Homes and the IOT

32:08 – Group discussion, Dad jokes, and banking puns.

Complete Transcript

Simon Erickson  0:00

Hello and welcome to this edition of our 7investing podcast. I’m 7investing founder and CEO Simon Erickson.

There are a lot of emotionally-charged headlines out there right now. We’ve seen that Biden has been sworn in as the newest American president. We’ve seen a surge of activity in SPACs. We’ve seen Bitcoin hitting all-time highs, and we’ve even seen Arnold Schwarzenegger now getting his COVID vaccine. These are all attention-grabbing headlines, but they might not mean the most for us as long-term investors. And so our question, our perspective, for our team this month, is “what is one underappreciated story that’s not making headlines, but that long term investors should be paying attention to?” And also, “what is one company that might actually benefit from this underappreciated story?”So we’re really doubling down on trying to find the actual signal and filtering out the noise for investors this month.

I’m going to put myself first on the list for this one day. And my story is I think that semiconductor M&A is underappreciated in the market right now. And before your eyes glaze over, you turn this podcast off, because that’s just too boring of a topic. We’ve seen some really big acquisitions taking place, we’ve seen Nvidia spend $40 billion to acquire ARM Holdings. We’ve seen AMD spend $35 billion to acquire Xilinx. We’ve seen a host of other companies that aren’t even known like maximum integrated products being acquired for $21 billion. The list goes on and on. This was actually the semiconductor industry’s second-largest year on record for M&A.

And I think that this has some incredible consequences for investors, because these customized chips are not just going into our own personal electronic devices and our smartphones like this, but they’re increasingly powering the internet, you know, software is now hosted in data centers that are in the cloud. And these are using highly customized chips that are powering all of these sites, you know, just kind of getting more and more design is more and more important for these companies. And when you’re looking at something at the scale of like Google, or Amazon Web Services, or any of these cloud providers, even just a 1% reduction in cost savings, of powering those servers, and powering those data centers is a huge, financially, a huge savings.

And so I think that we’re starting to see the semiconductor industry, it’s not just all about cost. But as we’re getting more and more focused on AI as the demands for software and of data centers, and whatever these chips are empowering, are increasing. We’re seeing more and more of an interest in a lot of these chip makers, branching out of CPUs, trying new different designs, GPUs, FPGAs, whatever it might be looking at some new different architectures, like 3D architectures, and really kind of creativity is reentering the semiconductor space. And one company that I think that’s really going to benefit from this is AMD. AMD has always been second fiddle, to Intel and CPUs. It’s always been second fiddle to Nvidia and GPUs. We saw them acquire Xilinx, which are highly configurable and programmable chips — they’re FPGAs is what they’re called. But I think that this is really gonna bring them in to kind of a renaissance for AMD, which is always kind of just been these discrete chipmaker. I think they’re going to start offering more and more options for developers who really want to use customized hardware.

So Maxx Chatsko, I’m gonna go to you next, you know, what is your underappreciated story? And maybe a company that might benefit from that?

Maxx Chatsko  3:46

All right, well, thanks. I mean, if you didn’t fall asleep from Simon’s talk, mine will surely do the trick here. So my story is that, you know, genomics isn’t the only omics out there. And that matters a lot to investors. We hear a lot about, these marketing terms that kind of have come up in the last year, “the genomic revolution”, or we see it a lot in the questions we get for our live show 7investing Now, or in messages I get on Twitter or emails I get directly, you know, “oh, this genomic stock”, “this genomic biotech stock”. We see the word “genomics” again and again.

And to me, as a scientist, as an engineer, I’ve seen this happen a lot with technical terms in the past, and now it’s happened to the word “genomics”, right? It gets applied to everything. And that means it means nothing at the same time, right? We hear people talk about “well, genomics”, and they apply that to CRISPR gene editing. We hear about genomics, and they apply that to liquid biopsies. We’re about genomics, and they apply that to DNA sequencing, and on and on. And really, this term doesn’t really apply to all of these things. We’re just kind of lazily and sloppily applying it to mean everything at the same time. And the problem here for investors is that this is very surface level information most of the time. So it kind of, you know, if you’re not looking deeper into the nuance and the context of some of these companies that you want to own or researching, or the technology platforms that they’re developing, you’re gonna miss some big opportunities, because you’re only focusing on genomics.

I focused on the specific examples of the liquid biopsy market. Genomics plays an important role there. We need to understand– let’s back up for a second. Omics, any omics, is understanding how systems of a specific entity in biology are affecting the function of a living thing. So genomics is the understanding of how systems of genes affect biologic function. Obviously, it’s an important omics to know about and it plays a huge role in liquid biopsies. We’re trying to detect these small signals of something called cell free DNA that’s circulating in a patient’s blood. And we’re trying to detect their cancer, right now, as well as more invasive biopsy approaches. The goal, of course, is to be able to take a simple blood test and find cancers that are in earlier stages of development, even when they’re not showing symptoms in the patient. So they’ll be easier to treat, less invasive to treat, maybe even we can put it in remission for good. So it has a tremendous value.

But in order to do that, it’s a very difficult data problem. We’re gonna need to find other types of omics in order to achieve that Holy Grail of liquid biopsies. And, again, if you’re only focusing on genomics, you’re gonna miss some of these recent moves. The companies in the liquid biopsy space have been making to position themselves for the future. There’s something called epigenomics. That’s understanding how genomes or systems of genes affect biologic function when the genes are turned on or off. So we saw Guarant Health in 2019, make the acquisition of Bellwether Bio. That was just a simple press release, it was kind of a small company at the time, but that’s a very important technology platform that Guardant Health now has to leverage for this problem.

We see proteomics, so that’s understanding how systems of proteins affect biologic function. And this is exactly the reason that Exact Sciences acquired Thrive Early Detection — it just closed earlier this year, it was announced in late 2020. So that’s an important technology to add to its stack for understanding these problems.

And then there’s other things like transcriptomics, that’s understanding how systems of RNA affect biologic function. We’re probably going to need that in addition to the proteomics. So again, if you’re not following these companies and understanding more of the nuance and context of other omics that come into play and are only focusing on genomics, you’re going to miss all the nuance of what these companies are doing, how they’re positioning themselves for the future. By understanding this, this is my closing thought, I would argue that the ranking as of right now, would be Exact Sciences, and then Guardant Health, and then Grail, and then the rest of the field. But I think, you know, if you’re only following genomics, you might rank that as like Grail being the first or the best, because that’s kind of it’s more marketed. It’s kind of more hyped up. But I wouldn’t put it in the first two leadership positions in my current rankings. And that’s because you need to understand some of the other advances that are going on in the field.

Simon Erickson  8:33

Yeah, great points, Maxx. And like you said, genomics is kind of a catch-all phrase out there, but the science behind what that’s actually impacting, really something important for us to understand as long term investors, of course.

Austin Lieberman, I come to you next here. You were pointing out that Chex Mix is probably getting more attention than genomics right now. What’s one other underappreciated story that is on your radar as an investor?

Austin Lieberman  8:56

Yeah, Simon, I think that Chex Mix things is mostly just because I’m constantly thinking about what my kids are going to eat next. And they, they seem to always, or I try to go for the easy breakfast cereal. But I’ll try to teach him about genomics now that now that Maxx just just taught me more about it.

Yeah, so mine’s a little bit simpler. And it was something that my brain could comprehend. And I think there’s an interesting opportunity out there in cellular connectivity. And when I think about that industry, I think about coverage providers like Verizon or AT&T or even T Mobile. And out of companies like that, as an investor, I’m really not interested in those companies, because they’re all very large. And those stocks have done pretty well and they, I think, a couple of them pay dividends. I just don’t see them as long term companies that I want to own just because of how large those companies already are.

But as access to high speed internet and cellular connectivity has spread to many parts of the globe, it’s easy to feel like the entire world has access to those services. But even in the United States, there’s many coverage gaps for wireless networks. And so more than 5 billion mobile phones move in and out of coverage, and still even today, roughly 50% of the global population is without mobile broadband access. So over the next several years, I think we’re gonna see investors start to pay a lot more attention to the growth opportunities in kind of covering those gaps in the cellular connectivity market.

And one company that I think is going to benefit from that over the next decade is New Providence Acquisition Corp, NPA is the ticker. It’s a special acquisition company, so a SPAC that everyone’s talking about these days, which makes me a little hesitant about it. But I think there’s some great SPACs out there. And I think this is one with potential, a lot of upside, definitely not an official 7investing recommendation, but one that I think has a lot of opportunity.

It brought AST Space Mobile to the public market, that’s the company that changed into NPA, and AST Space Mobile owns the first and only space-based cellular broadband network that provides coverage everywhere, or at least that’s the plan over time as they invest and grow their network. And it’s compatible with all 5 billion existing mobile phones. There are some networks out there that have provided this type of coverage, but generally, you’ve had to own a certain type of device that gives you that connectivity. This in the model for them is they’re trying to partner with some of the largest cellular providers in the world, and just offer their coverage almost as like gap coverage for when their customers go out of their cellular network. They get a little notification on their phone that says you’re extending beyond your normal network, “do you want to activate AST Space Mobile?”, they hit “yes”, and then they have much better coverage.

And so this is great, on the sea, out in the desert, and all different kinds of places in the world. The company has more than 750 patent claims. And it’s building a network of satellites to provide coverage anywhere in the world. Still a risky company, but they’re expecting to own $181 million, or earn $181 million in revenue by 2023. And then just give you the idea of the growth potential, that was $181 million, and then $9.6 billion by 2027. So quite a growth curve if they’re able to achieve that. So that’s what I like that no one’s really talking about that, that industry, or that opportunity. And then I haven’t seen a lot of people talking about this company either.

Simon Erickson  12:40

Great, thanks very much Austin. NPA like you were mentioning, addressing the secular gaps right now in our infrastructure. Dan Kline, let’s come to you next. But first of all, any thoughts about the telecom industry as we transitioned into your underappreciated space right after that?

Dan Kline  12:54

Yeah, I’m actually pretty bullish on T Mobile, I think, you know, I don’t know that their television product is going to work. But it’s an interesting play. But I do think being the, the mobile phone company that customers actually like is an inherent advantage. The reason I don’t own it is the second you finish 5G, you have to build 6G, and then it’s an endless capital structure. So it’s a really well run company. That being said, I just think the structure of their industry pretty much always makes it like my fourth or fifth pick in a month never like my top pick, but it’s made my list pretty much every month.

So I’m going to talk about something many of you probably haven’t heard of, that’s a store’s brick and mortar retail. No, I’m kidding. I tend to deal in the, the sort of more, more real stuff. So you’ve all heard it, the “Retail Apocalypse”, “the internet”, “Amazon is coming and it’s crushing…”. It’s a lie. It’s not true. Brick and mortar retail remains a major opportunity. So let’s look at the numbers. In 2019, — Simon, you’ve probably heard me quote this number like 6,000 times — in 2019, 13.4% of all sales were done on the internet. So that meant that roughly 96% of all sales, or 86% of all sales were done in stores.

Lots of stores are closing. But let’s look at those stores. Why did, say, Sears close? Why did JC Penney close? Go to a Sears, go to a JC Penney and you’ll know why. Bad mixes of merchandise, really dumb decisions. I mean, you can go back to the Ron Johnson era at JC Penney when they angered all their customers. What retailers are struggling, they tend to be the retailers that don’t have a plan that didn’t adjust for changing customer habits.

So what happened during the pandemic? Wow, during the pandemic, we did all our shopping online, right? All of it. No, at the height of the pandemic 20% of our shopping was online. And very likely two years from now, that’s going to be about the mix: 80% / 20%. So what’s the opportunity there? The opportunity is to run really good experiential retail, meaning stores that it’s fun to walk around. So I’ll give a couple examples. Marshalls, which is a TJX company, and all the TGX companies use this particular strategy. My mother doesn’t go to Marshalls because she needs a sweater. My mother goes to Marshalls to see what they might have. And she might come out with a shirt for me, some socks for herself, who knows what, it’s fun to go there. Well, you’re not going to want that experience online. It’s not going to be the same even, you know, I use Amazon’s Woot!, which is a treasure hunt kind of thing. But it’s not as fun as walking into a Best Buy and seeing what’s on the clearance table.

So who are the big winners going to be in this space? It’s retail that serves very specific niches. So Dollar General, Dollar General tends to serve underserved communities, it tends to serve people who maybe they can’t afford a 30 pack of toilet paper all at once, and they’re just going to, you know, buy it. I know that sounds bad. But that is their market. When they open a store, they know exactly when it’s going to get to profitability, exactly what its ceiling is going to be. And then they open 1,000 more stores every year. And now they’re spinning into different retail concepts. They have like sort of a home furnishings, not furnishings as much as home stuff, let’s call it, concept that they’re rolling out.

The one I think is going to be the biggest winner though, and I wish it, I wish I had bought this sooner but I do own some personally, is Five Below. So Five Below the concept is everything in the store is below $5, except some of their stores have an Above section now that sells things like video games, and maybe higher end puzzles, but for the most part, you walk in, and there’s some things you’re always going to get. There’s always going to be headphones, there’s always going to be, you know, movie theater size candy, but a lot of the merchandise changes. So you go to Five Below and you go with your kid, you’re like, Alright, we’re gonna spend $10 today, and we’re all going to leave with like three things we find enjoyable. So I am a big fan of this idea that shopping is entertainment, it’s not expensive.

So you know, most of us have kids here, you’re always looking for things you can do with your kids, that you can placate them, they feel like they got a lot and “oh, it’s gonna cost me $1 80”. My son bought a Japanese soda at Five Below and we looked around for 45 minutes, obviously, looking around now is going to be a little more truncated than looking around when not in a pandemic. But there’s plenty of opportunity in brick and mortar retail. Costco isn’t going anywhere. Target, which does a wonderful job online and with curbside pickup, it’s still a great experience to go to a Target, especially the new ones with the Disney stores and the really well done liquor stores that sell local beer. So anybody who tells you brick and mortar is over, these are the same people that told you that all reading was going to move to the Kindle, when the answer is about half did. It’s not going to be half with retail, it might someday get to 25%, 30%. But even then there’s going to be plenty of room for brick and mortar retailers.

Simon Erickson  17:59

Great points, Dan. Five Below, definitely a lot of these brick and mortar retailers finding reasons for you to go back and experience the shopping. Rather than just buying things online. Matt Cochrane, I’ll come to you next. Before we get into your under appreciated sector and company, any thoughts about the retail industry like Dan was just mentioning?

Matt Cochrane  18:15

Yeah, as far as the the physical sales mix in the online sales mix? Like that line is just getting increasingly blurred right? I mean, like what does it count as e-commerce if you pay for it on an app and then go to the store to pick it up? Or like if it’s sitting in a locker for you to pick up or if you pay for it at the store but then later is delivered to your house? Like it’s just, that line, I think it’s just basically commerce, right? Like I think at some point, that line is gonna get so blurred it’s gonna be really hard to distinguish between the two.

Dan Kline  18:43

Yeah, let me jump in Matt. So I bought a new TV recently. And I bought it at Walmart and I physically went to look at it in a Walmart and then I ordered it on walmart.com. It’s a 65 inch television, gigantic. Now I might not have purchased it — because it was very inexpensive was like $349 before Christmas — if I hadn’t been able to physically see it. I might not have purchased it. So is that an online sale? Or is it really a brick and mortar sale? Because I did go to the store, I just didn’t, I don’t have the ability to drive a 65 inch television home. I would have had to carry it home. So I do think you’re right that this is going to get very, very squishy going forward.

Austin Lieberman  19:22

Yeah, and that uh that expensive section of Five Below they should call it High Five.

Dan Kline  19:30

Next time I’m talking to the CEO of Five Below I will suggest that.

Steve Symington  19:36

Dad joke for the win, Austin.

Matt Cochrane  19:38

Way to go out.

One headline you won’t see anytime soon, but which I think is an undeniable trend is that financial inclusion, defined as people with an account and access to basic financial services, is higher than at any other time in history and is only going to rise from here.

In 2018, the World Bank reported that 69% of the world’s population, that’s about 3.8 billion people, now had an account with a financial institution or a mobile money provider. In 2011, that figure was only 51%, which means that between 2011 and 2018, 1.2 billion people opened an account. Financial inclusion has exploded from global smartphone penetration and mobile technology, which has effectively put a bank and digital payment capabilities in everyone’s pocket around the world. This is important because basic financial services make it easier for people to save money, manage financial emergencies, and invest. And those without these financial services have to rely on cash, which is unsafe and can be really difficult to use for a lot of those things like investing.

Even access to a simple mobile money service can make a big difference according to the World Bank. This is a quick excerpt from one of their reports. “A study in Kenya found that access to mobile money services delivered big benefits, especially for women, and enabled women headed households to increase their savings by more than one fifth, it allowed 185,000 women to leave farming and develop business or retail activities. And it helped reduce extreme poverty among woman-headed households by 22%.” So this matters. This is an important thing.

As far as a company that can benefit from this trend. There’s many that are undoubtedly going to benefit, but one that comes to mind is HDFC Bank. It’s India’s largest bank. India is home to the world’s second-largest unbanked population, second only to China, where in 2018, 190 million people did not have financial accounts. HDFC Bank has 5,400 bank branches scattered across India with a pretty even mix between rural areas and urban areas. And it’s well positioned to grow its customer base of 56 million in the coming years. Despite its large physical presence, that doesn’t mean HDFC is ignoring digital and mobile channels. In 2020, 95% of its customer transactions were initiated via its digital channels, which was up from just 35% in 2010. So they’re they’re investing in a lot of apps and unique digital channels for everything from mobile payments to saving to investing to shopping and insurance. And it’s pursuing this omni channel strategy to reach India’s 190 million unbanked people.

Simon Erickson  22:36

That’s fantastic. HDFC Bank. Matt, one that you and I have talked about quite a bit over the years for sure, too. Steve, any thoughts on banking, on mobile devices, and financial inclusion internationally before we jump into your underappreciated story?

Steve Symington  22:49

No, I Matt always sums that sector up a heck of a lot better than I can. So I’m always happy to learn from him in that realm. So fantastic take on that.

Simon Erickson  23:03

Do you have any bad puns or jokes like Austin followed up with the High Five? At least give me something to work with…

Steve Symington  23:08

I’ve got, I’ve got a lot of bad puns, but none related to the financial, mobile banking sector.

Simon Erickson  23:15

Okay, fair enough.

Maxx Chatsko  23:18

We have to put up with this on Slack, don’t subject all of our subscribers to it, too.

Simon Erickson  23:21

That’s right. We’re a fan of dad jokes and bad jokes. Steve has got tons of them that he throws on the Slack channel. But, maybe we’ll come up with something as an outtake later on.

Matt Cochrane  23:30

I have a bank joke. Can I have a bank joke?

Simon Erickson  23:31

Oh, please go ahead. Thank you.

Matt Cochrane  23:33

What did– What did the football coach say when he went to the bank?

Simon Erickson  23:37

What’s that? I don’t know.

Matt Cochrane  23:38

Can I have my quarterback?

Simon Erickson  23:43

Oh-ho!

Austin Lieberman  23:43

Touchdown, Matt. That was a touchdown.

Simon Erickson  23:50

And our subscribership hits a new low. Steve, what’s your underappreciated story?

Steve Symington  23:55

Like, grimace GIF right now is what’s going on. I, okay, so…

One of the things that investors read a lot about right now, is investing opportunities tied to the Internet of Things. And for those of you unfamiliar, or if you you’ve ever wondered what the Internet of Things is, that’s a trend for adding internet connectivity, your sensors, connectivity software, to increasing numbers of everyday things to improve our lives. Of course, this is a massive opportunity, there’s hundreds of possible stocks to capitalize on the trend. We’re talking wireless chip manufacturers and companies that analyze the data coming from these devices and the makers of the things themselves, you can think of Amazon with its Echo devices. And there’s a lot of ways to capitalize, but there’s one trend within the Internet of Things that I think is widely underappreciated right now, and that’s the rise of smart homes.

This is something that’s sort of it’s gradually happening and it’s gaining steam. There’s several research reports that were released in recent weeks talking about the size of the global smart home market, and most of them anticipated, roughly doubling, or nearly tripling over the next several years. And this should be a multiple hundreds of billions of dollars market, enabled by the Internet of Things and largely spurred by adoption of devices, like video, doorbells, voice assisted technology, smart speakers, home surveillance. And of course, all those things help make our home smarter. But all too often, these various products come from different manufacturers with different visions for how they think smart homes should operate.

So one company I think, could benefit should benefit and is poised to benefit from the smart home market is iRobot. And maybe that’ll come as no surprise to some people who’ve followed my work before. I had a nice conversation with iRobot Co-founder and CEO Colin Angle back in November, where he talked about the recent launch of their Genius Home Intelligence platform. They’re not just the Roomba company, you know, they’re looking at taking their robots and using them as sort of a central unifying intelligence for smart homes to be able to kind of tie all these pieces together and allow all the devices to work together in a cohesive way. So I really am impressed with their long term vision for the way smart homes should play out. And I think as this market only continues to increase in size, relatively small companies like that might be the best way to play it rather than buying huge chip makers or big companies like Apple or Google, rather Alphabet, in order to capitalize on the Internet of Things and smart home specifically.

Simon Erickson  26:49

Yeah, great point, Steve. And I know that from watching your interview with Colin, there’s so much of this is the ecosystem and the interrelations between those devices in the home. Not just that it’s a hardware device. It’s cleaning your floors, but something that’s interacting, really interesting to see how far all of that has come.

So to recap, the six themes that we discussed here on– or all of the things that we discussed here on this show, we talked about:

1) Semiconductor M&A and how that’s going to impact cloud computing and devices and just a whole bunch of things. And I offered AMD is one stock pick from that: ticker on that is also AMD.

2) We went to Maxx next who talked about genomics and how that is influencing other parts of science, too, such as liquid biopsies. He mentioned Guardant Health, ticker GH on that, as one company that could benefit.

3) Austin then talked about the gaps in our cellular connectivity even in the United States here and said New Providence Acquisition Corporation, ticker NPA, was one to keep an eye on.

4) Went to Dan next who said bricks and mortar retail is not yet dead, no matter what you might think and what you might hear out there. He said Five Below with the ticker FIVE was his company.

5) Matt then talked about financial inclusion and money services that are being offered for developing markets. You mentioned in India, there was HDFC Bank, ticker on that HDB, is one company to keep an eye on.

6) And then Steve brought it home with with smart homes and the Internet of Things with iRobot, ticker IRBT, as a company keep an eye on you.

We’ve got a couple minutes here before we end up the podcast. Maxx, maybe I’ll bring it back to you. You know, we talked about genomics in your section. Any other comments about any one of these themes? Or companies mentioned, that’s intriguing to you?

Maxx Chatsko  28:33

Yeah, I mean, for Austin, you know, do you think it’s reasonable that definitely in our lifetimes, let’s say like, if I’m hiking deep in the backcountry, is our planet just going to be blanketed in great reception? Like in 10 or 20 years? Like, will I be able to get a cell reception out on the top of a mountain somewhere?

Austin Lieberman  28:50

I know what you’re just trying to do, Maxx. You’re trying to figure out when you win that bet with Simon, if you’ll have a service where he can he can deliver it to you?

Simon Erickson 29:07

And deliver $200. That’s right.

Yeah, so you know, I was, in my career prior to this in the military, we often spent a lot of time out in the middle of nowhere, and rely a lot on GPS connectivity with radios and things like that. That capability is out there with super expensive, not easy-to-use technology. So I don’t think it’s a stretch to think that that will make its way into consumer devices with the growth of networks like we talked about earlier. And then partnering with satellite cellular companies versus having to have a special device or something to do it. I think I think it’s realistic if we go to Mars, like, like we better have coverage on Earth, right?

Simon Erickson  29:43

Yeah, fair point, Austin. Any other– any one of these themes or any questions or follow ups you’d like to have or any of the other the other themes presented?

Dan Kline  29:50

Yeah, I’ll jump in. And Simon, I’ll just say and this has come up a lot today. So we did a 7investing Now earlier and we talked a lot about sort of misconceptions of like what people think was gonna happen as our government changed. What we’ve learned here is the conventional wisdom, the “what everybody thinks”, is often wrong. Like groupthink tends to be and I brought it up with with brick and mortar is dead. A lot of those statements you hear are just factually either not true, or they don’t really understand the investment angle. So like we talked about it earlier today with solar. Just because solar might be the thing of the future, doesn’t mean any individual company is investable. So you really need to understand the market, or at least listen to people who do understand the market before you sort of jump into things just because of like how the crowd thinks.

Simon Erickson  30:38

Yeah, great point, then the the headlines don’t always tell the whole story. Matt, Matt Cochrane, any final thoughts? Any any of these themes standing out to you?

Matt Cochrane  30:45

I actually have a question for Steve. Steve, it seems like with a lot of companies, not just smart home companies, but with a lot of companies, like technology and privacy are coming to a head. And I don’t know how that’s gonna end. But for like, specifically smart home technology? How do you see that playing out?

Steve Symington  31:08

It’s definitely a concern, and companies need to walk a line. With that, you know, there’s always concerns about “Okay, what is my Echo listening to? What’s my Roomba looking at when it maps the house?” And these are the sorts of things that companies need to be very careful about, and that’s definitely a risk to the industry overall.

And it’s something they’ve already started to navigate. There was an uproar over iRobot a couple of years ago, because people misconstrued some comments by management. When they said that they were, they said something about the prospect of selling data that they collect — and they don’t do that. But everybody thought they did. And, you know, there’s… Yeah, so there’s a lot of concerns about that. And that’s I guess, something too. Something to keep in mind. But yeah, it’s a risk.

Simon Erickson  32:01

Yeah. And how about it, Steve. Any of these themes or any of these companies or questions you have that you wanted to follow up on before we close this out?

Steve Symington  32:08

No, I’m just thinking of a bunch of dad jokes today. I would have to say no.

Simon Erickson  32:14

Follow up. Matt, you have one more — what was it? What you said one more?

Matt Cochrane  32:18

So, I actually used to work at a bank, but I only lasted one day. A woman —

Simon Erickson  32:22

Probably because of these jokes, right?

Matt Cochrane  32:24

A woman came in and asked me to check her balance, so I pushed her over.

Steve Symington  32:30

Oh, no.

Simon Erickson  32:31

We’ll be here all week. Everyone watching the show. This is the added benefit you get from 7investing.

Steve Symington  32:37

Simon, did you know why Teslas are so expensive?

Simon Erickson  32:40

I don’t know why is that?

Steve Symington  32:41

They charge a lot.

Maxx Chatsko  32:45

Austin, wherever you’re going, is it too late? Can I come?

Dan Kline  32:49

We’ll be coming out with the 7investing line of popsicle jokes like these. These are literally the level of joke they print on a popsicle stick.

Simon Erickson  32:56

We were doing so good guys, and then we just fell from from wherever we were. Well…

Once again, thanks for listening to this episode of the 7investing podcast. In addition to getting Matt’s bank jokes and Steve’s dad jokes and Austin’s Five Below jokes, we’ve given you six investable themes that really aren’t hitting the headlines. You know, there’s so much noise out there. We are long-term investors with 7investing. Our recommendations that we present, and we put on our scorecard, we’re buying and holding indefinitely. And so long-term stories are really things that are important to us. And we encourage investors to think long term in their own investing as well. So thanks for tuning in to this episode of our 7investing podcast. We’ll have more bad jokes next month. Until then, we’re empowering you to invest in your future. We are 7investing.

 

Related 7investing Content:

7investing Team Call: DocuSign vs Sea Limited

7investing Team Call: Under the Hood of Tesla

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