What's Behind the Current Wave of Layoffs
Lately, I've been completely captivated by Kards, a game that's a brilliant fusion of traditional collectible card gameplay and the intense themes of World War II. The game, for me, feels like a mix of blackjack's unpredictability and chess's strategic thinking, all wrapped up in the vintage aesthetic of 1940s military art. Initially, I played with an aggressive strategy, deploying all my units early to gain quick dominance over my opponent. However, this often left me exposed, without reserves for the critical later stages of the match. I learned my lesson, licked my wounds, and now, I've shifted to a more calculated approach, deploying only a few units at a time and reserving my most powerful cards for pivotal moments.
This approach to gaming mirrors the strategy I employ in managing my investment portfolio. In today's tumultuous market landscape, I lean towards caution, holding my financial firepower in reserve, ready to deploy but only in measured, deliberate doses. And speaking of tumultuous markets, one trend that's impossible to ignore is the continuous stream of layoffs sweeping through the corporate world. Recently, IBM has joined a growing list that includes Amazon, Microsoft, Expedia, Alphabet and Wayfair. Yet, amidst this turmoil, there's a palpable shift towards Artificial Intelligence, with investments in AI technologies ramping up even as layoffs persist. This pivot has me wondering: are we on the brink of a significant shift from human labor to an AI-dominated landscape?
Every issue of Something To Consider has underscored my commitment to spotting sectors ripe for growth and high returns. Drawing from the strategic patience and resource deployment I've mastered in Kards, I mirror these tactics in my investment decisions. At the moment, my sights are set on sectors like cryptocurrencies, artificial intelligence, defense, and precious metals.
In this edition, I'm executing a swift 'blitz,' spotlighting four strategic additions to the portfolio. Each selection represents a key piece in my investment strategy, chosen for their potential to navigate the expected market and geopolitical storms ahead.
Decentralized skies.
Netflix, Airbnb, Lyft, Nordstrom, and Spotify have something crucial in common: their reliance on Amazon Web Services (AWS) for server space. AWS, an Amazon division, revolutionized the tech landscape by allowing companies to forego the expense of maintaining physical servers in favor of renting digital space. This innovation laid the groundwork for what we know today as "cloud computing," turning AWS from a fledgling project into a cornerstone of modern tech infrastructure.
In this transformative tech landscape, I've set my sights on a company poised to parallel AWS's achievements, but within the realm of decentralized cloud computing. Enter InFlux Technologies Limited (FLUX), pioneering the decentralization of cloud services. Unlike traditional models offered by AWS, Microsoft Azure, and Google Cloud, Flux leverages a distributed network, ensuring services remain uncontrolled by any singular entity. Their flagship offering, Flux Cloud, is redefining data management with its emphasis on decentralization, scalability, and resistance to censorship. Recently, they've even launched a WordPress solution, further diversifying their suite of services.
Flux isn't just another name on the long list of blockchain ventures; it's a standout project that's capturing my investment attention. Its approach to decentralizing cloud computing positions it as a formidable rival to the tech giants. My investment in Flux tokens is a long-term play; I'm not here for short-term gains but to invest in a company that has the makings of a Web3 titan. Investing early in a venture like Flux offers the exhilarating potential of being part of a journey similar to those of Google, Amazon, or Microsoft in their nascent stages.
AI Agents at your Service.
Next on the list is Fetch.ai, a trailblazer in the realm of decentralized digital ecosystems, harnessing the power of artificial intelligence to usher in a new era where autonomous AI agents act on behalf of their owners. Envision a world where these agents, empowered by AI and blockchain technology, carry out tasks ranging from complex data analysis to completing transactions with unprecedented efficiency. Fetch.ai isn't just developing technology; it's crafting a future where machines communicate, learn, and independently make decisions, paving the way for a smarter, more interconnected digital existence. or earning crypto rewards from your holdings. This trend, once a niche within the vast crypto landscape, is attracting significant attention from big financial players, signaling a shift towards mainstream acceptance.
One of the most compelling demonstrations of Fetch.ai's capabilities can be seen through its integration with everyday communication tools like WhatsApp. Imagine initiating a straightforward conversation with a Fetch.ai agent about scheduling a carpet cleaning service for a specific date and time. With remarkable ease and without any need for human intervention, the agent navigates through options to secure the best service available. This scenario not only showcases the practical applications of Fetch.ai's technology but also highlights the platform's potential to revolutionize how we interact with and benefit from AI in our daily routines, moving us closer to a seamless, AI-assisted future.
From the moment Fetch.ai came onto my radar, its potential struck me as monumental, especially in our smartphone-centric society. It's not just me who's captivated by its capabilities; the market has responded enthusiastically, propelling the value of Fetch.ai tokens upward in recent months. I've already secured a modest stake and am eagerly awaiting an opportune moment for a significant buy-in. My plan? To hold onto these tokens for the long haul. I'm fascinated to see where Fetch.ai's journey leads, imagining a future where it becomes as ubiquitous as Siri or Alexa, but vastly more powerful. The prospect of legacy applications seamlessly integrating with Fetch.ai offers a glimpse into a future where our digital interactions are significantly more intelligent and intuitive.
BigBear.ai
This past month, I bought the dip and added shares of BigBear.ai (BBAI:NYSE) to the portfolio. At the forefront of AI and machine learning innovation, BigBear.ai is carving out a critical niche by transforming massive datasets into actionable insights, especially for decision-makers. Their prowess isn’t just in crunching numbers; it’s about giving 20 of the U.S. military and intelligence communities, including powerhouses like the U.S. Army and Cyber Command, the tools to navigate through complex challenges. Their suite of solutions, spanning from supply chain logistics to cybersecurity, is setting new benchmarks in operational efficiency through cutting-edge AI applications.
This March, BigBear.ai announced a significant leap forward: the acquisition of Pangiam Intermediate Holdings, LLC. Pangiam, known for its Vision AI technology in global trade and travel, marks a pivotal expansion for BigBear.ai into national security, supply chain management, and digital identity realms. This union heralds the birth of an unparalleled Vision AI portfolio, melding facial recognition and image-based anomaly detection with BigBear.ai's predictive analytics prowess. Through this strategic acquisition, BigBear.ai is not just expanding its footprint; it's redefining the landscape of AI-driven decision intelligence, poised to navigate the future's complexities with unprecedented clarity.
It's no revelation that my enthusiasm for Artificial Intelligence runs deep, and adding BigBear.ai to the portfolio further cements my position in this rapidly evolving field. The aspect of BigBear.ai that particularly excites me is its significant role within the defense sector. Given the current height of global tensions, gaining exposure to this critical area feels not just prudent but essential. For fiscal year 2024, BigBear.ai is projecting revenue in the ballpark of $195M to $215M. Marking a milestone, the company celebrated its first cash flow positive quarter since its public debut in 2021. In the first quarter of 2024, BigBear.ai fortified its financial standing through two pivotal warrant exercise agreements with an existing accredited investor. These agreements led to the exercise of approximately 8.9 million and 13.9 million warrants, injecting an additional $54 million in gross proceeds into the company's coffers, thereby bolstering its balance sheet significantly. As of December 31, 2023, the company's share count stood at 156 million outstanding shares compared to 127 million in December 2022.
The Crime Epidemic
As we navigate through our present reality, it's becoming increasingly apparent that the surge in crime isn't confined to fiction. Major urban centers across North America and Europe, from Toronto to New York and Chicago, are experiencing a distressing uptick in unlawful activities, drawing parallels to the notorious Gotham City. For those unfamiliar, Gotham City serves as the dark, crime-ridden backdrop in the Batman comic series, a place where lawlessness pervades and the night is a playground for villains.
In response to this wave of criminal activity, I've strategically added a company to our portfolio that produces a remarkable piece of technology, colloquially dubbed the "Batman weapon." The product in question is the BolaWrap, a handheld device that propels a Kevlar cord intended to ensnare a person's limbs, effectively restraining them from a safe distance. Its innovative approach and utility draw a direct line to the kind of gadgets employed by the fictional vigilante Batman, earning it its superhero-inspired moniker. This addition aligns with my strategy of investing in solutions for pressing societal issues.
In our September 2023 edition, I spotlighted WRAP Technologies, the innovators behind BolaWrap, and placed them on my watchlist. Fast forward to today, with the crime rate not showing any signs of slowing down, I've decided to take the plunge with an initial investment. March brought encouraging news from WRAP Technologies, announcing a 20-unit order expansion from the Detroit Police Department, building on a successful initial partial implementation last year. Earlier, in February, the Fairfax County Police Department in Virginia committed to a full-scale BolaWrap deployment for its officers. A pivotal moment came in December 2023, when WRAP announced a landmark $4.9 million BolaWrap order for the fourth quarter—the largest in the company's history. This order is not just a win for WRAP but marks the beginning of what's expected to be a significant global rollout of WRAP’s solutions in 2024, setting the stage for potentially transformative growth.
Trendpost Takeaway
As we approach the end of the first quarter of 2024, the landscape seems more daunting than ever. The relentless rise in crime across North America and Europe, coupled with a surge in job losses and government spending sketches a somber picture of our societal fabric. The cloud of commercial real estate instability also hangs heavily, as evidenced by the stark decline of NY Community Bank's shares, which have tumbled 66% since the start of the year, hitting their lowest point in 27 years after weak results and a dividend cut. Moreover, despite widespread speculation, the anticipated rate cuts have not yet come to pass, and we've seen US mortgage rates creep alarmingly close to the 7% threshold, adding another layer of uncertainty as this quarter draws to a close.
In response to these precarious conditions, my portfolio strategy remains steadfastly conservative. I'm prioritizing liquidity and safety, maintaining a substantial portion of my assets in cash and equivalents. This cautious approach provides the flexibility to respond swiftly to market shifts and opportunities. Given the volatile landscape, I've cautiously invested small sums into WRAP Technologies and BigBear.ai. WRAP Technologies is poised to benefit as the crime wave shows no signs of abating, especially as we edge closer to the critical 2024 US elections. Meanwhile, BigBear.ai gives me a valuable foothold in the defense sector, allowing me to capitalize on escalating geopolitical tensions and the corresponding surge in defense spending.
Looking ahead, my resolve is to maintain this defensive posture, hedging against further economic turbulence while remaining vigilant for opportunities that such conditions invariably present. The overarching goal is to preserve capital and position for growth in a post-crisis landscape. With this strategy, I aim to navigate through the dark skies, ready to seize the clear moments when they emerge.
Below, you'll find a detailed table outlining the portfolio's composition as of March 2024. Cash and GICs continue to make up the bulk of the portfolio, offering a solid foundation and ensuring that the portfolio remains robust amidst uncertainty.
Portfolio Composition
| As of March 2024 | |
|---|---|
| Category | Portfolio Weight |
| Cash and GICs | 91.78% |
| Trailblazers | 1.35% |
| Defensive Picks | 5.35% |
| Crypto | 1.52% |
| TOTAL | 100% |
Remember that the content of this newsletter is neither a stock recommendation nor investment advice. This is just something to consider. You can access my watchlist and portfolio through the link below. By clicking the link below you accept all responsibility for any potential losses that might result from buying any of the stocks mentioned in this newsletter.