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Bank of America Identifies Tech Moonshots


Parsad
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https://www.wsj.com/articles/low-interest-rate-dow-35000-joby-aviation-carvana-coinbase-beyond-meat-investing-11631464939

 

"Joby Aviation, which plans to begin an electric air taxi service in 2024, is worth more than Lufthansa, EasyJet or JetBlue. Does that seem right? In this market, why not? Heck, earlier this year, Tesla was worth more than the next nine car manufacturers combined, though now only the next six. Beyond Meat, made with pea protein, is worth more than the entire market for peas eaten globally—like the bumper sticker says: Imagine whirled peas. Do fundamentals even matter? I can go on. Used-car sales platform Carvana is worth more than Volvo, Honda, Ford or Hyundai. Airbnb is worth more than Marriott and Hilton combined. Crypto-exchange Coinbase is worth more than the Nasdaq. I live at the intersection of innovation and disruption, but when companies are worth more than any possible reality, watch out. How about those meme stocks still getting hyped on Reddit’s WallStreetBets? Those who bid GameStop shares into the stratosphere waved at Virgin Galactic Holdings as they soared by. A year ago, the stock was $6 and it is now $190—some dupes paid $483, game over. Short sellers Melvin Capital, Point 72 and D1 Capital focused on fundamentals and got their assets handed to them. Shorts lost more than $9 billion between January and June. New Chairman Ryan Cohen, who is driving change at GameStop, may be a retail genius for turning around Chewy, but Redditors may want to put in a call to hedge-fund manager Eddie Lampert, who bought Kmart and merged it with Sears in 2005, as a highly touted “integrated retail” play, combining stores and online sales, eerily similar to the argument for investing in GameStop today. The stock peaked at $135 in 2007. It is now at $0.30 as the company languishes in bankruptcy. A 1970s Sears Johnny Miller leisure suit is worth more. Venture capital is cuckoo. After investing $120 billion in the 2000 dot-com frenzy, and just $16 billion in 2002, U.S. venture capital invested $130 billion in 2020 and then $140 billion in the first half of 2021. Startups these days raise money as “the Uber of gardening” or “Space as a Service.” Oh wait, the latter was WeWork’s pitch, whose founder Adam Neumann declared in 2017, “our valuation and size today are much more based on our energy and spirituality than it is on a multiple of revenue.” Is “spirituality” the S in SPAC? And check this out: In June, an Italian artist auctioned an invisible statue for $18,000—in reality it was an empty box the artist claimed was a “space full of energy.” WeWork energy? Yeah, maybe fundamentals are a quaint relic of a bygone era."

 

https://stratechery.com/2020/the-end-of-the-beginning/

 

"The implication of this view should at this point be obvious, even if it feels a tad bit heretical: there may not be a significant paradigm shift on the horizon, nor the associated generational change that goes with it. And, to the extent there are evolutions, it really does seem like the incumbents have insurmountable advantages: the hyperscalers in the cloud are best placed to handle the torrent of data from the Internet of Things, while new I/O devices like augmented reality, wearables, or voice are natural extensions of the phone. In other words, today’s cloud and mobile companies — Amazon, Microsoft, Apple, and Google — may very well be the GM, Ford, and Chrysler of the 21st century. The beginning era of technology, where new challengers were started every year, has come to an end; however, that does not mean the impact of technology is somehow diminished: it in fact means the impact is only getting started. Indeed, this is exactly what we see in consumer startups in particular: few companies are pure “tech” companies seeking to disrupt the dominant cloud and mobile players; rather, they take their presence as an assumption, and seek to transform society in ways that were previously impossible when computing was a destination, not a given. That is exactly what happened with the automobile: its existence stopped being interesting in its own right, while the implications of its existence changed everything."

 

 

Edited by UK
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I think its a great idea for people to keep an eye on stuff like this. Finding a new and disruptive theme in the early innings, with a great long term story is one of the easiest ways to make a ridiculous amount of money in a low risk fashion. 

 

As for the BAC list....I think some of those things have already peaked in terms of investment opportunity. Others haven't gotten enough traction. 

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1 hour ago, Spekulatius said:

"Joby Aviation, which plans to begin an electric air taxi service in 2024, is worth more than Lufthansa, EasyJet or JetBlue. Does that seem right? In this market, why not?

 

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What's Buffett's quote about airlines, something about an investor doing everyone a favor by shooting the Wright brothers down due to all the capital lost investing in airlines over the years.

 

Would be interesting to see how a basket short on the companies mentioned in the article performs over the next 3 years vs. SPY.

 

Singling out Joby aviation, they're certainly not the only company working on autonomous electric aircraft, that they're the only(?) "pure play" that's public has lavished a disproportionate amount of capital upon them. If a half dozen other electric aviation startups went public too, and Boeing/Airbus spun out their divisions working on similar projects into companies, would Joby have the same valuation? Probably not - investors are hunting for sector exposure because they think, often correctly, that those sectors will be worth a ton in the next decade. Some companies are in the right place at the right time.

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Perhaps it would be a good idea to start a thread discussing potential innovative ideas and related companies.

 

Greg and CRISPR comes to mind

 

Isochoric freezing is something I just read about

https://www.ift.org/news-and-publications/food-technology-magazine/issues/2019/november/columns/isochoric-freezing

https://escholarship.org/uc/item/6nw3q238

https://www.sciencedirect.com/science/article/abs/pii/S0963996921001277

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Tech trends I can see:

1) World wide dropship service. I believe it was Alibaba that announced a world wide (with caveats) drop ship service for chinese commercial customers (don't have the link handy). This could revolutionize commerce over time.

 

2) AI - we only scratched the surface so far and there is no telling how far this will go. Will probably a trajectory for new software.

 

3) Quantum computing - a must because the feature size is now only a few nm for semi's at the leading edge and once the dimensions are only a couple of atoms, quantum effects are inevitable and drive the behavior of the device. Since we will need to keep Moors law going somehow, quantum computing will become inevitable although it may not be with the current architectures.

 

4) Additive manufacturing. This was a boom and bust (in the stock market) a few years ago, but the tech is here to stay and get's constantly improved - cheaper, more precise, more materials and easier to use. it's a slow motion revolution that is going to migrate and change a lot of lower volume manufacturing over time.

 

5) Synthetic biology - same than 4). probably will boom and bust in the stock market, but the tech is here to stay. Will be used to produce a lot of complex organic substances.

 

6) Energy - carbon capture, Nuclear power 3.0 (mini reactors), Fusion. Will take time. Political issues.

 

7) Metaverse / augmented reality / virtual reality - many commercial ,and entertainment application. 

 

8 ) Slow or even Defeat aging. A  really hard problem but will be a huge market at some point.

 

9) Artificial body parts - maybe related to 8). Our current tech is crude (Artificial heart and don't work well). At some point we are going to grow artificial biological organs I think. Maybe we become Cyborgs over time?

 

10) Artificial Food. Current version are crude (Beyond meat) but at some point, we will have artificial meats etc that are comparable to a steak for example, maybe related to synthetic biology.

 

11) Space economy - the cheaper launch costs will enable new business that use the space as a new dimension.

 

12) Communication - 6+ G. if we have always on high speed communication for virtually any device that could be a gamechanger. I have no idea what we will do with this, but i think we will find out in a decade or so.

 

13) Blockchain  - will have a use case for transactions. Currency is just one use case, but I think the main application will be to facilitate commerce without having to trust any single institution.

 

14 ) Superhumans. Probably controversial, but i think it will be inevitable that we will create superhumans over time using gene tech. Smarter, stronger, healthier. if a nation decides they don't want to do it for ethical reason, evaluation will take care of them. Inevitable. I am certain China will do it. Ethics will have to adapt.

 

15) Autonomous driving - it will come, but take longer than people think. it's probably still a decade out. It is not just a software problem, but also a hardware problem - we need cheap sensors covering many different ways to get info about what's going on around the vehicle - LIDAR, radar, IR cameras etc and they all need to be reasonably cheap and reasonably small. Not a simple problem.

FWIW, I think Tesla will hit a wall because they solely rely on camera's (so far). That is likely not enough.

 

 

On another note, I don't really think one needs to be first with these trends to be successful. Most of the trends above will evolve over decades (like e-commerce did) and many first movers will fail or wither and there will be setbacks. Some of these don't have network effects the same way that software or ecommerce does, so many winners are possible.

Edited by Spekulatius
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I’ll add healthcare, in the vein of what Hemant Taneja is working on at General Catalyst. 
 

Then a subset of that is mental health. 
 

And a part of that is psychedelics for therapeutic use. I’m on the West coast and innovators in the therapeutic scene are pivoting towards integrating psychedelic therapeutics. Anyone own CMPS? 

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6 hours ago, Spekulatius said:

"Joby Aviation, which plans to begin an electric air taxi service in 2024, is worth more than Lufthansa, EasyJet or JetBlue. Does that seem right? In this market, why not?

 

Trigger GIFs - Get the best GIF on GIPHY

 

Spekulatius...are you and I the only die-hard South Park fans on here?  Cheers!

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2 hours ago, Parsad said:

 

Spekulatius...are you and I the only die-hard South Park fans on here?  Cheers!

I don’t know if I am die hard, but there is an episode or setup for every conceivable situation in life in one of the South Park episodes. Same with “The Office” show.

 

So much wisdom just can’t be ignored.

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8 hours ago, bathtime said:

And a part of that is psychedelics for therapeutic use. I’m on the West coast and innovators in the therapeutic scene are pivoting towards integrating psychedelic therapeutics. Anyone own CMPS? 

 

It is interesting, do not own it, but I follow them to see how everything plays out. However I am not sure what kind of business eventually (and advantages over others) they whould have, even if beeing right/aprooved/accepted soon?

Edited by UK
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6 hours ago, UK said:

 

It is interesting, do not own it, but I follow them to see how everything plays out. However I am not sure what kind of business eventually (and advantages over others) they whould have, even if beeing right/aprooved/accepted soon?


I think the plan is a combo of first to market w/FDA approval, anticipated patent on a specific formulation, and patents on specific indications for use. 

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1 hour ago, bathtime said:


I think the plan is a combo of first to market w/FDA approval, anticipated patent on a specific formulation, and patents on specific indications for use. 

Whatever comes out of it, I don’t think it is going to be a mega trend sort of business. Maybe Cannabis will be. I could see Cannabis competing with Alcohol as the go to social drug of choice in a few decades.

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On 9/16/2021 at 1:43 PM, Spekulatius said:

Tech trends I can see:

1) World wide dropship service. I believe it was Alibaba that announced a world wide (with caveats) drop ship service for chinese commercial customers (don't have the link handy). This could revolutionize commerce over time.

 

2) AI - we only scratched the surface so far and there is no telling how far this will go. Will probably a trajectory for new software.

 

3) Quantum computing - a must because the feature size is now only a few nm for semi's at the leading edge and once the dimensions are only a couple of atoms, quantum effects are inevitable and drive the behavior of the device. Since we will need to keep Moors law going somehow, quantum computing will become inevitable although it may not be with the current architectures.

 

4) Additive manufacturing. This was a boom and bust (in the stock market) a few years ago, but the tech is here to stay and get's constantly improved - cheaper, more precise, more materials and easier to use. it's a slow motion revolution that is going to migrate and change a lot of lower volume manufacturing over time.

 

5) Synthetic biology - same than 4). probably will boom and bust in the stock market, but the tech is here to stay. Will be used to produce a lot of complex organic substances.

 

6) Energy - carbon capture, Nuclear power 3.0 (mini reactors), Fusion. Will take time. Political issues.

 

7) Metaverse / augmented reality / virtual reality - many commercial ,and entertainment application. 

 

8 ) Slow or even Defeat aging. A  really hard problem but will be a huge market at some point.

 

9) Artificial body parts - maybe related to 8). Our current tech is crude (Artificial heart and don't work well). At some point we are going to grow artificial biological organs I think. Maybe we become Cyborgs over time?

 

10) Artificial Food. Current version are crude (Beyond meat) but at some point, we will have artificial meats etc that are comparable to a steak for example, maybe related to synthetic biology.

 

11) Space economy - the cheaper launch costs will enable new business that use the space as a new dimension.

 

12) Communication - 6+ G. if we have always on high speed communication for virtually any device that could be a gamechanger. I have no idea what we will do with this, but i think we will find out in a decade or so.

 

13) Blockchain  - will have a use case for transactions. Currency is just one use case, but I think the main application will be to facilitate commerce without having to trust any single institution.

 

14 ) Superhumans. Probably controversial, but i think it will be inevitable that we will create superhumans over time using gene tech. Smarter, stronger, healthier. if a nation decides they don't want to do it for ethical reason, evaluation will take care of them. Inevitable. I am certain China will do it. Ethics will have to adapt.

 

15) Autonomous driving - it will come, but take longer than people think. it's probably still a decade out. It is not just a software problem, but also a hardware problem - we need cheap sensors covering many different ways to get info about what's going on around the vehicle - LIDAR, radar, IR cameras etc and they all need to be reasonably cheap and reasonably small. Not a simple problem.

FWIW, I think Tesla will hit a wall because they solely rely on camera's (so far). That is likely not enough.

 

 

On another note, I don't really think one needs to be first with these trends to be successful. Most of the trends above will evolve over decades (like e-commerce did) and many first movers will fail or wither and there will be setbacks. Some of these don't have network effects the same way that software or ecommerce does, so many winners are possible.

 

Great list.  I think 15 will be a short steppingstone to autonomous flying.   Roads are too limiting in places you can go and the volume of vehicles they can hold.  If you can control a autonomous vehicle then it is a short step to controlling a vertical takeoff & landing autonomous aircraft.  In the future roads will be used less and less for vehicle traffic.  Driveways will be used as landing areas for uber type drone services.

 

 

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I would be a bit concerned about getting mini-9/11 plane crashes in buildings every couple of days when we have flying taxis. There is also  bigger issues with engine failures. I think flying short haul mass transportation might eventually come, but it is a long way off.

The fifth element flying cars GIFs - Get the best gif on GIFER

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11 minutes ago, Spekulatius said:

I would be a bit concerned about getting mini-9/11 plane crashes in buildings every couple of days when we have flying taxis. There is also and bigger issues with engine failures. I think flying short haul mass transportation might eventually come, but it is a long way off.

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Not even into buildings, but just in general...what happens when there's failure? Just drop down on top of people in the streets? Even if theyre 2x as reliable as a real car, thats still too many incidents. Been wondering how they solve this since watching Minority Report like 20 years ago. 

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2 hours ago, Gregmal said:

Not even into buildings, but just in general...what happens when there's failure? Just drop down on top of people in the streets? Even if theyre 2x as reliable as a real car, thats still too many incidents. Been wondering how they solve this since watching Minority Report like 20 years ago. 

 

These will be small lightweight electrical aircraft, not 737 jetliners filled with fuel that can take out skyscrapers.  Also I don't envision many people owning these privately, and I really don't think there will be a way to manually fly these.  The software will not allow you to fly them into buildings intentionally.   Yes, they will be hacked, but over a million people die on the roads world wide every year, I can't see people hacking robo-taxis to murder people causing many deaths.   Also since they will be electric motor, not engine driven,  and maintained by large companies the maintenance should probably be much more like Americain Airlines and less like someone's hillbilly cousin Jimbo with his 1970s station wagon full of rust.  I don't think you will see these falling out of the sky very often.

 

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1 hour ago, rkbabang said:

 

I can't read this because I don't subscribe, but any current company is far too early.  We don't even have fully autonomous electric vehicles yet.   A human driven flying car is a non-starter.

 

This article includes very interesting part on historical transport inovations:

 

"Taxi companies using radical new technologies and promising to transform transportation have arisen before. In 1897, what became known as the Electric Vehicle Co. began operating battery-powered taxicabs in New York City. In the U.K., the London Electrical Cab Co. also began service that year. In 1899, the Compagnie Française des Voitures Électromobiles got underway in Paris. The electric taxis offered some great advantages over the horse-drawn cabs they sought to replace. They were clean and quiet and, because they were so innovative, they appealed to the wealthy and fashionable. In New York, the electric-taxi business boomed. In June 1898 alone, nearly 1,600 customers traveled a total of 4,400 miles, according to business historian and management professor David Kirsch of the University of Maryland. They paid 30 cents a mile, more than $9.75 in today’s money. (Horse-drawn cabs charged 50 cents a mile.). In 1899, the Electric Vehicle Co. had about 45 cabs in service, averaging 27 miles of trips per day, and a financing rush was on. A rival, the General Carriage Co., sought to raise $20 million in capital (about $650 million today). The New York Central railroad said it would launch a service with 100 electric taxis based at Grand Central Terminal. That year, estimates of demand for electric taxis quickly ratcheted up from 1,600 to 2,000 to 12,000. To shuttle passengers to New York’s booming Metropolitan Street Railway trolley system, which covered 232 miles in Manhattan, 1,500 battery-powered taxis would be needed. The Electric Vehicle Co.’s parent ordered as many as 850 “electromobiles” from its manufacturing affiliate in Hartford, Conn. In seven weeks that spring, the share price of the New York electric taxi company nearly tripled. Then the surge began to fade as overexpansion took its toll. Short battery life doomed the London and Paris firms in a year or two. In 1902, the General Carriage Co. collapsed after its stock shot from 87.5 cents to $20.50 and fell back again. Most of the electric-taxi services in smaller U.S. cities never got traction. Above all, Henry Ford supplanted the electric car by changing the idea of what automobiles were for.

 

Electric taxis were the natural offshoot of the 19th-century model of transportation, exemplified by steamboats and railroads: centralized services that charged fixed prices to serve fixed routes on fixed schedules. Consumers who accepted that as the status quo would rather pay others to drive them than to drive themselves. Instead, Ford got consumers to think of transportation not as a service someone else offered but as a product they could own and operate themselves. That enabled people to go anywhere they wanted whenever they wished. Transportation no longer had to be rigid; it could offer freedom. Traveling was usually still a necessity, but it could also fulfill an aspiration. Huge improvements in the power and range of gasoline engines helped, but Ford’s biggest weapon was low price: He introduced his Model T in 1908 at $850, roughly one-third of what electric cars cost at the time. Suddenly millions of people could own a product that gave them a sense of control over time and space.

 

Decades later, Sir Freddie Laker adopted a similar approach. Air travel had long been limited mainly to the wealthy and to business travelers when, in 1977, he launched his Skytrain, a bargain-priced, no-reservations and no-frills airline linking the U.K. to the U.S. People stood in line for hours, sometimes days, in what they called “Queue Gardens” to snag tickets at one-half to one-third of competitors’ fares. Laker’s innovation helped force governments to deregulate the airline industry, slashing airfares across the board just as the global economy was about to boom. In 1976, 137 million middle-class people world-wide had traveled by air. By 1981, that number hit 212 million; a decade later, it reached 583 million.

 

Technologies and industries often take leaps forward when products and services can be put to surprising new uses, enabling customers to fulfill needs—or aspirations—they didn’t even know they had. Radio, developed to assist navigation, became the indispensable musical accompaniment to people’s lives. The airplane, in its early decades, was used far more for delivering mail and shipping goods than for carrying passengers. The mobile phone, originally designed for people to talk with, has become the all-in-one wristwatch, camera, stereo, movie theater, road map and encyclopedia we all carry in our pockets and purses. Endless commutes in torturous traffic jams have made travel something millions of people dread. Perhaps—if all the technology works and every bureaucracy cooperates—air taxis can someday reinvest travel with the sense of novelty and freedom it once had. Success might depend on what the technology can deliver soon. It might depend even more on whether the technology can deliver what people don’t know they will want later."

 

 

Edited by UK
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