6 Investment Megatrends for Explosive Profits Part 3 of 3
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So, in this video series, I'm looking at
what are the six most powerful
investment mega trends that are poised
to deliver double-digit gains in the
next 5, 10, 15 years. And this is where
we want to focus our portfolio in order
to beat the market. Or at least that's
what I'm doing. So, if you have not
watched part one and part two, do watch
it first. And then we're going to look
at part three to continue. So, in the
first two parts, I talked about the
first three investment mega trends.
Number one, AI and robotics. Number two,
AI energy and infrastructure. And number
three, healthcare and the longevity mega
trend. And in each of these mega trends,
I talked about what are the stocks which
I think have the strongest economic
modes, highest return on capital and
strongest growth potential as well as
potential ETFs that one can look at to
ride these mega trends. If you think
that the stock market feels choppy and
unpredictable this year, you are not
alone. Many people are very concerned
about the stock market potential
overvaluation
about Trump's policy uncertainty about
Greenland about a thousand other things.
So come and join me live at Outlook 2026
the online edition this coming weekend
and I'll share with you how I intend to
position my portfolio and take advantage
of the volatility this year. It's
completely free and spots are limited.
So reserve your spot with the link below
right now. So let's now focus in this
video on the last three investment mega
trends.
The fourth investment mega trend is in
digital payments and financial
infrastructure. So what are the drivers?
Very simple. Ask yourself this question.
How often do you now pay in cash? Well,
hardly. In fact, uh you know, recently
I've been taking trips to Malaysia from
Singapore and I've been carrying a lot
of my uh Malaysian ringit notes and
increasingly I can't use the notes
because they say we don't take notes
anymore. All right? They just want you
to swipe your card or your or your your
smartphone, right? So, everywhere in the
world, whether Singapore, Malaysia, the
US, in China especially, I don't think
in China you can get around with cash
anymore. The drivers of this mega trend
will be number one increasing cashless
adoption all around the world. Number
two is embedded finance where almost
well a lot of the apps that you use have
got embedded financial features whether
is it Apple pay or grab pay or Google
pay and of course the third thing is
instant payments. People want to send
money all around the world instantly.
And why is this a mega trend? Because
money movement again is becoming
digital, is becoming global and is 24/7
and payments grow with nominal GDP. So
over time as countries increase their
nominal GDP, financial payments grow and
companies that are in this industry will
grow as a result of it. So what can we
invest in? What companies will write
this mega trend? There are three main
areas and the first area is where I'm
personally invested in for already quite
some time. It would be card networks.
These are what we call the toll roads.
It's like every time you drive on the
highway, you have to cross a toll. You
have to pay to cross the highway. In the
global digital payment highway, it's a
duopoly controlled by two companies,
Visa and Mastercard. So, both of them
have the strongest economic modes. And
as you guys know, I only like to invest
in companies that are monopolistic that
have got little little or no
competition. In this case, these are the
two companies. Now, a lot of people have
this misconception that Visa and
Mastercard are credit card companies.
No, they are not. They are payment
technology providers.
American Express is a credit card
company, but not Visa and Mastercard.
So, understand that when you get a
credit card, who issues you the credit
card? not Visa and Master. It is the
bank that [clears throat] issues you the
credit card. Who do you pay interest to?
The bank, not Visa Mastercard. Visa
Mastercard only uh provides the payment
technology that ensures the transaction
between the merchant bank and the
consumer's bank goes on smoothly with
the highest standards of trust and
security. So recently as you know uh
President Trump he said he wants to cap
credit card interest at 10%. Visa and
Mastercard are not directly affected.
Who's affected? It is the banks that
affected not Visa and Mastercard.
American Express will be affected. So
the recent drop in Visa Mastercard in my
opinion is a great opportunity to add
more shares but I haven't added more
shares because I think it hasn't dropped
enough in a sense that is not that
undervalued. I I would love it to drop a
lot more to get more undervalued before
I add more Visa Mastercard because I
already have quite a big position.
So, Visa and Mastercard understand why
it wins even if wallets change the front
end. So, as you know at the front end
people may use Apple Pay, they may use
Grab Pay, they may use Google Pay, they
may use Stripe. There there are so many
uh options at the front end. Now,
whichever one you use, Grab Pay, Apple
Pay, Stripe, guess what? Visa and
Mastercard still wins because Visa
Mastercard, they often sit under the
hood as a payment rail no matter which
of these wallets that you use
ultimately. So, Visa, Mastercard to me
are the two strongest companies within
this mega trend. Now, again, do not
blindly just invest in a stock because
it's within a mega trend. You have to
ensure it's a high quality business with
solid fundamentals. So let's take a look
at Mastercard and Visa's fundamentals.
You look at Mastercard for example, you
can see what are the things I look at. I
look for very high return on equity
ideally above 12 to 15%. That's high.
You can see their return on equity is
185%. That's insane. And then return on
invested capital ROIC. I also want it to
be above 12 to 15%. And it's 54%. That
is insane. All right. And take a look at
the consistency of their revenue,
profits, and cash flow. And you can see
how consistent it is. You can see over
the years, their revenue growing very
consistently in blue. Their operating
income and net income also increasing
consistently. We want to see that. So a
good business is one where over the
years whether you've got trade war,
you've got COVID pandemic, you've got
recession, no matter what happens, their
revenues keep growing, their profits
keep growing. That's a great business.
That's a resilient, predictable
business. And look at the cash flow. You
can see that the operating cash flow
increasing consistently and the free
cash flow also increasing very
consistently. And that's why this
company rates very high on
predictability, rates very high on
profitability, on growth. It's not a
super high growth company, but it's got
moderate growth, which is good enough
for me. You can see the projected growth
rate in the next 3 to 5 years is 15%.
Pretty good above the S&P 500. And
longer term beyond that, 18% growth
rate. And you can see that it's got a
very strong economic mode, wide economic
mode as well as very strong balance
sheet. And in terms of valuation, like I
said, it is not that cheap, but it's
also not that expensive right now. You
can see that the intrinsic value is
about 531 and the share price is now at
531. So, it is fairly priced and I mean,
it's not a sin to buy it now. You won't
die if you buy it now. But for me as a
value investor, I like to buy if it's,
you know, more undervalued. Then I got a
bigger margin of safety. Same thing with
Visa. Now between the two, Mastercard
has slightly higher growth rate, but
Visa is also pretty strong. You can see
that Visa's projected growth rate in the
next 3 to 5 years is 10.69%
and longterm is 12.36%.
So still not bad, but not growing as
fast as Mastercard. Intrinsic value is
324. and share price 325. Same thing,
fairly priced, not a big discount right
now, but again very highly predictable
company, very profitable, moderate
growth, strong mode. You can see one
economic mode, strong financials, and
what more could you ask for? Now, within
digital payments and financial
infrastructure, some people may look at
two other areas of investments. The
other one would be to invest in issuer
core processing. Now, who are issuers?
Issuers are basically banks. Banks that
issue cards and they need software at
the back end that helps them to run
their internal payments engine to uh
manage their accounts and balances. So
two companies that focus on this are
Feerfol FISV where the share price
recently dropped significantly after
they lowered their uh projected growth
guidance and they found that they
underinvested in infrastructure for
quite a number of years and their main
competitor Fidelity National Information
Services FIS. You also have got
companies that do merchant acquiring
which are basically [clears throat] they
go out there and they acquire merchants
or shops to use their hardware as well
as they offer payment processing
services. For example, yen t symbol ad
Y. You got global payments symbol GPN.
You got Flyw Wire Cop and of course the
very famous PayPal ticker symbol PPL
which I never invested in and I'll never
invest in no matter how cheap it looks
because personally I do not like PayPal
as a merchant myself. In fact, my
company, we used to use PayPal, but
because a lot a lot of the problems that
we have with PayPal that I won't mention
here, we have chosen to use Stripe
instead. But that goes to show you that,
you know, among all these companies, I
don't think that any of them have a very
strong economic mode that I'll be
interested to invest in um as a company.
So, neither of these companies I'm
actually interested to invest in
personally. Again, this is not financial
advice. You could of course invest in
them if you think they're great. But
personally for me in this entire mega
trend, I'm happy with just Visa and
Mastercard. And so as a result, I don't
see any need to invest in any ETFs
because as long as I can find companies
that are monopolistic, I rather invest
in individual companies. But within an
industry, if I find that there's no
company that's monopolistic or
duopolistic, then I may look at an ETF
to capture the growth of the entire
industry.
Let's move on to the fifth investment
mega trend and this is a very big one
and it is cyber security and data
protection. Again, you don't have to be
a genius to figure out that this is a
big business and you only grow. Why? As
everything goes online, everything is
digital, everything is um on the web,
you're going to get more and more
hacking, you're going to get more and
more cyber scams. So, every company will
need cyber security.
So the rising cyber threats and cloud
migration of companies moving to the
cloud is a huge growth uh uh driver for
this mega trend. So you find that for
corporations security demand grows
faster than IT budgets due to risk
profiles. You have to protect your uh
IT. So there are three areas uh you can
look at. Number one is platform security
which is the all-in-one security
operating system. So these are platform
vendors that bundle firewall plus cloud
plus endpoint security plus security
operation center SOC into one contract.
So very high switching cost for these
companies and strong upsell potential.
And the two companies with the strongest
modes in this area would be Paulo Auto
Networks which I've owned for many many
years. Let's take a symbol P A N W. In
fact, I think this is um kind of like
the Rolls-Royce and a Ferrari of this
industry because Palo Alto has the
broadest enterprise platform play. They
do network cloud and SOC. And in second
place, very close behind is Foret,
ticker symbol FDNT, which I also own for
many years. Products include hardware
and software. They've got a huge
installed base and strong unit economics
for network edge. So my analogy is like
Palo Alto is like the Ferrari, the
Rolls-Royce and for is kind of like the
Toyota right which is u not as premium
uh but it's it's very popular as well.
They both have solid fundamentals. If
you take a look at Palo Alto you can see
it ranks very high on predictability,
very high in profitability, very high
growth, very strong economic mode,
medium financial strength and you can
see ROIC at 14.6% 6% and ROE at 15.33%
which is relatively strong. Uh intrinsic
value right now is 195 and you can see
it's selling at 184. So it is slightly
undervalued. Now for cloud security and
cloudnative application protection
platform segment you can see that again
Palo Alto is one of the leaders in that
this segment under their Prisma cloud uh
platform. And then you've got
Crowdstrike, which I also own. But Crowd
Strike, if you look at the fundamentals,
um you can see that it's more of a
speculative growth company where growth
is very high, but it doesn't yet have
consistent profits and cash flow, which
is fine for a speculative growth
company. Uh but I would normally take a
smaller position given that it's more
speculative and is also a bit more uh
overvalued at this point of time, but I
would love to add more if it gets more
undervalued. The next segment will be
SSC, security service age and SASSE,
securing users everywhere. So as work
moves hybrid and apps move to the cloud,
companies shifted from castle walls to
securing access everywhere. Um, so the
strongest modes in this area will be
Zcaler ticker symbol ZS and once again
Paulo Auto. You can see that Crowdstrike
like I mentioned is a great company,
very high growth company growing at 17%
for the next 3 to 5 years and longerterm
growing at 22%. But it's not yet
consistently profitable. If you take a
look, revenue growing like crazy, but it
is still losing money. It is still
unprofitable, but you can see it is
already cash flow positive. net
operating cash flow increasing and
currently uh still overvalued even
though you can see it retraced
uh it retraced a bit over there. All
right, it's you can see if you look at
the charts over here uh wave up, wave
down, wave up, wave down, wave up, wave
down, wave up, wave down, but it is uh
slightly above its intrinsic value. Um
now I do have a position in crowd
strike. I've been holding it for quite a
number of years and I would love to buy
more crowd strike but again I would like
it to get undervalued before I add more
and when it comes to these more
speculative growth stocks where the
profits are not yet consistent I'm a bit
more uh cautious so I take a much
smaller position as compared to a
company like Palo Alto where they've got
very consistent uh profitability where I
dare to take a larger position now we
come to the last investment mega trend
now I must say that this investment
vector trend is really exciting and I
think that it's going to be really big
in the next you know 20 30 years but as
of now it's still quite speculative.
Most of the companies in this investment
mega trend don't yet make money but they
could make a lot of money in the future.
So what mega trend am I talking about?
I'm talking about the space economy. So
why the sudden buzz in the space
economy? Why is it that more and more
people are talking about it? In fact, a
lot of the shares of the companies have
started running up in anticipation of
future earnings potential. A few
reasons, a few drivers. Number one, of
course, would be uh the sudden IPO of
Space X uh this year that is targeted to
be a $ 1.5 trillion IPO. And of course,
that has created a lot of excitement
around other space related companies.
But that's that's just one thing. But
the main reason why now it's gaining
more and more um traction in terms of
the space economy is because there's
been recently a 90%
[clears throat] commercial launch cost
collapse. What does this mean? In the
past, it cost a lot of money to send a
rocket into space. In fact, it cost
something like $18,000 to send every 1
kilogram of a rocket into space. But
because Space X as well as Rocket Labs,
they have innovated reusable rockets,
you can now send uh a kilogram into
space uh at as low as $1,000 and the
cost is dropping rapidly. So now that
it's so much cheaper to send things into
space, a lot of things are now becoming
commercially viable, which they never
were in the past. For example,
space-based data centers. And this
doesn't sound now initially may sound a
bit crazy but it's not because now
you've got the CEO of Google um Sudai
Picha or Alphabet saying that they're
going to create uh space data centers
very soon. They're investing in space
data centers. By the way, they own 8% of
Space X. Uh you've got um Amazon CEO
saying the same thing. So many of these
mega cap companies they are now drawing
plans to build data centers into space.
And now because again commercial launch
cost is collapsing is becoming more and
more feasible. So why build data centers
into space and and not just on earth?
Well the the the the challenge with
building data centers on earth of course
number one is you need a lot of land.
Number two you need a lot of power which
has a shortage of power as I've been
talking about in the previous slides.
The great thing about space uh based
data centers is that you've got
unlimited
solar power and as you know data centers
create a lot of heat and in space
there's a natural cooling from the
vacuum in space. So space is a perfect
place to put all the data centers
required
uh to run the AI factories to generate
all the robotics and and all the stuff
that we need in the future. So that's a
really really big business. So that's
number three. The fourth thing is that
as you know the US and its allies are
now investing more and more money,
hundreds of billions into missile
defense shields. And of course the US
has got this golden dome that now now
it's going to start deploying around
above Greenland as part of Trump's deal.
The fifth thing is also a very big deal
and it is low earth orbit connectivity
or LEO connectivity. So what is this
Starink? Think of Starink. So Starink
has been providing uh LEO connectivity
now all around the world especially in
areas which have got dead zones and so
on so forth. Now, so LEO connectivity is
basically providing internet, voice, and
data centers in using satellites in low
earth orbits. And so, you know, in the
past, you use use a satellite phone, you
need a special phone, and it's not that
clear. But now with low earth orbit
connectivity, you can use a normal
smartphone to access the internet and
voice and data via these low orbiting
constellation of satellites. So what
does this mean? That means in the future
you do not need any more of these uh
territorial or landbased cell towers.
And so with this, you're going to get
global broadband anywhere, even in dead
zones, even in countries where they want
to block the internet. And again,
existing smartphones will be able to
connect directly to satellites. Our
iPhones can connect directly to a
satellite. And these companies that
provide this service like Starling for
example, and another company, which is
uh as I'll talk about in a while, they
will charge monthly subscriptions just
like your telco companies. Now could
this be a big mass market disruption to
kill many of the existing legacy telos
maybe right? So that could be something
really really big. So these are the five
main things that are now driving
excitement around space related
companies and the space economy is
projected to grow from currently $630
billion to $1.8 trillion by 2035. So
what are the leading companies in the
space economy? Well, first let's take a
look at the different segments of this
economy. Number one would be the
infrastructure leaders. Uh the upcoming
one of course is SpaceX. That's the
granddaddy of them all. But currently
they are not listed. They are still a
private company. But of course once they
get listed then that should draw a lot
of investor attention. Actually be very
interested to buy Space X shares. But
their targeted IPO price of 1.5 trillion
seems a bit expensive. And of course,
that's what companies do when they first
sell to the public. They want to price
themselves as high as possible. Well,
the good news is that if you take a look
at some great companies in the past that
listed, whether is it Visa that listed
many years ago, which I bought them by
the way, not at listing a couple of uh
months down the road, and of course,
when Facebook listed, what happened?
Many times, the share price would drop
at least 50%
before eventually going to the moon. All
right, pun intended in this case. So,
same thing for SpaceX. Once SpaceX
lives, I'll be watching it. If it drops
like 50% or more, I'll be interested to
pick up some shares because I think that
in this space economy, SpaceX will
definitely be the one with the strongest
economic mode and SpaceX is already
profitable and it is already cash flow
positive. All right. Now, so besides
SpaceX, what else is there? Uh you've
got the other infrastructure
infrastructure leaders. Uh Rocket Lab is
listed and they are the closest
competitor to Space X. In fact, they are
known as the second Space X. They are
the only other private company that's
consistently launching rockets and they
also have reusable rockets. Their space
systems division which makes satellite
parts now accounts for a huge portion of
their revenue making them a diversified
picks and shovels play as well. Besides
being an infrastructure play, the other
infrastructure leader is Red Wire,
ticker symbol RDW.
Uh this company's a leader in space
infrastructure and orbital
manufacturing. They provide the solar
arrays and robotics needed for the new
orbital data center trend.
So that's the first segment. Second
segment would be the data and
connectivity plays of which you have got
two main ones. Of course, there are many
more. These are the two leading
companies. uh as space mobile which I
mentioned earlier on or as so they are
building the first space-based cellular
broadband network to connect directly to
standalone smartphones where all our
smartphones can connect connect directly
to the satellite and anywhere in the
world we have got internet we got voice
we got data and of course they compete
directly with Starlink uh that is owned
by Space X that's under Elon Mus and
then there's planet labs so planet Labs
or PL ticker symbol
They are known as the Google maps of
space. They operate the largest fleet of
Earth imaging satellites. And as AI gets
better at analyzing satellite imagery
for agriculture, defense, and climate,
their data will become more and more
valuable. Yeah. By the way, fun fact,
Alphabet, which I have a big position
in, and I think a lot of you also own
Alphabet, which owns Google and YouTube,
they own 8% of um SpaceX. So indirectly
if you own Alphabet you already have
exposure to this space economy.
The third segment of the space economy
would be the lunar and exploration
specialist. Uh this part I'm not that
keen about. I don't think the total
addressable market is as big as the
first two but I'll just mention it.
Leading company in this area will be
intuitive machines sticker symbol Lun R.
So they're the leading provider of lunar
landers and moonto-earth communication
services. They are the primary
beneficiary of NASA's move to outsource
lunar logistics. Again, bear in mind
that all these companies I mentioned are
most of them are not profitable. They
are still losing a lot of money, but
their share price has already started
running because people are anticipating
that in the future they're going to make
a lot of money. Yeah. And as always, uh,
I don't like to chase them after they've
run, okay? So, I wouldn't buy them right
now. You know, I'll wait for a pullback.
I'll wait for retracement. And I'll look
for lowrisk entries uh to get in. And
there's no rush. Like I said, this thing
is going to go on. This investment trend
is going to go on for the next 10, 20,
30, 40 years. Uh, it's not a sprint.
It's it's a long-term marit marathon,
right? And unless I can get in at a
attractive level or attractive price, uh
I won't for more to get in. So like I
said, most of these stocks are very
speculative. They're not profitable yet.
Uh and some of them are subjected to
binary events. Like if the rocket fails
to launch, then the share price could
collapse a lot, right? If the rocket
launches and it goes up. So it's it's
very high risk at this stage. Now again,
if we take a look at these these
individual companies that I mentioned,
you notice that most of them don't make
money. And even if they do make money,
it is not consistently profitable yet.
And so, as a result, it's very hard to
value these companies because they could
be worth so much or this much or this
much. It's very hard because there's no
solid historical track record. All
right? So, that is what makes them more
risky. So, does it mean that we don't
invest in them? We could still invest in
them, but again for speculative
investments, I'll take a much smaller
position. Uh, and some of them I may not
invest in them as in um close mines and
just buy, but I may enter them as more
uh trades where I'll have like a
stop-loss in place so that if it if it
really doesn't work out, at least I get
out and I minimize my losses. So, um I
do invest in speculative stocks from
time to time and I do trade them from
time to time, but again much smaller
positions because they're a lot more uh
unpredictable if you will. But the ones
that are very predictable, yeah, I'll
invest really big and I'll close my eyes
and I just take the ride. So, so it's a
different form of investing. So, let's
let's look at a few of them. So, Rocket
Lab, which I mentioned, is the second
Space X. Uh they've got a narrow
economic mode. Uh and again you can see
if you look at the financials over here
um click on bar chart that's easy to
read. So you can see yeah revenue is
growing very fast but again they are
still unprofitable. In fact their losses
are getting bigger and bigger and
there's nothing wrong with that
especially if it's a new company that's
what usually happens but eventually um
if things work out then they'll become
very profitable. So a lot of people are
now paying up and buying the shares
already pricing in the future
profitability before it it has happened.
Hence it's very speculative. If you look
at free cash flow, free cash flow is
still negative. So they're still burning
cash. Um
and so when a company doesn't make money
right now, it's really hard to value
because a lot of the valuation is based
on, you know, what you think it could be
in the future. you're you're paying for
a castle that has not been built yet and
that that's always the challenge. So if
we look at for example intrinsic value
over here usually for companies that
don't make money uh the way we value
them is we look at the price to sales
ratio or we use a price to sales growth
ratio or we use the rule of 40.
Uh so in terms of uh mean price to sales
ratio if you use that one then it could
be worth $64. Right now it's selling at
87. All right. So even if you use the
mean price of sales
uh which values it at $64
at 87 it's still overpriced. All right.
And if you use price to sales growth
ratio method then it's only worth $7.
Right? So you can see that there are
many ways to value it. We can't value it
using discounted cash flow because
there's no cash flow. We can't value
using discounted net income. There's no
net income. We can only value it using
you know price to sales or price to book
which doesn't make sense or price to
sales growth. Again uh Oracle value
tends to be more conservative. It kind
of takes an average and adjust a lot of
the numbers. So the Oracle value is $13.
So you could take that as the most
conservative valuation. But if you want
to be more optimistic and say okay based
on mean price of sales it's worth $64.
You can also do that. Yeah. But either
case, even if you take the higher
valuation, uh the share price is still a
bit overvalued right now. So that's
Rocket Lab for example. If you take a
look at uh as Space Mobile, currently it
doesn't yet have a strong economic mode.
I think it will in the future, but not
yet. And that's what makes it more
speculative. And again, it's not making
money as well. You can look at
financials
and you can see that uh still losing
money revenue growing but still losing
money and is burning a lot of cash free
cash flow very negative burning a lot of
cash. So how do you how do you value
something like that? It it's really
difficult. Again, if you look at
intrinsic value, again,
you can't use discounted cash flow.
There's no cash flow. There's no income.
So, how do you value it? Again, the only
way is look at a mean price to sales
ratio, and that would value it at about
$51.
If you look at a price to sales growth
ratio, that values it at at $3. So,
there's a wide range of what it could
be. If you take oracle value, which
again is more conservative, then it's
worth like $33.
Now, there are some analysts that are
valuing it at $100. You may say, "How do
they get $100 valuation?" Well, it's
because this company as
uh they recently said that they their
target is to hit $1.12 billion in free
cash flow by 2030. That that's their
target. So if you believe that's going
to happen and you do a discounted free
cash flow valuation method based on that
then the shares are worth $100
about $102 if you will. And if you value
it at $102 then at a current share price
of uh uh $103 that is fairly priced.
Okay. So can we really value $100? Well
it depends right. So, if you really
think they're going to hit, you know,
1.12 billion 2030, then yes, it's worth
$100. But again, it's just a promise
they're making, you know, and and that's
always the tough part when you value a
company that has not made money yet,
that it's they're just shooting up in
the air, but uh if you believe it can
happen, it can happen. Um let's look at
the last one. Planet Labs again, you can
see, you know, um doesn't make money as
well. So, they're all very very
speculative. So, what do I do in this
case? So in this case, I may choose to
buy some of the individual companies,
but again, not as an investment because
it's too risky to invest. I'll put it in
more like a trade where I'll look for
lowrisk entry point, enter a lowrisisk
entry point, uh, put a stop-loss, and
then I'll have like a initial profit
targets where I'll take profit slowly as
the price runs. So let me give you an
example of how I would do that. So if
you look at rocket lab for example um I
I can look at weekly candles can look at
daily candles depending on your time
frame uh daily candles you tend to be
more volatile especially for for these
stocks. So if you look at uh weekly
candles you can see again watch the
price action pattern right? So you've
got a wave up you've got a wave down
you've got a wave up you've got a wave
down and now you can see it's waving up
here.
So ideally I would like so what's a
lowrisk entry point? The lower risk
entry point is you want to wait for a
future wave down to a support level. So
you can see that this has been a pretty
strong support which is roughly at the
40 EMA or 50 moving average. So it
retraces to a support here and I can see
a bullish candlestick pattern telling me
that it's going to continue the trend.
Then I could enter right there and place
a stop-loss uh right below that swing
low. So that could be a potential future
entry into rocket lapse. Again, more for
trade than a uh closed eyes kind of
investment. So the difference is trading
I I place a stop-loss. It's like trading
is like a one night stand. I got to use
protection. Whereas investment is like
marriage. I I don't need to use
protection because it is already a
proven business model that actually
makes money. So that's Rocket Lab. For
example, if you look at AS, let's look
at ASS.
Uh, again, look at the price action.
Same thing, right? You can see, you
know, you know, wave up, wave down, wave
up, wave down, wave up, wave down. Now,
it's waving up. So, when it's waving up,
I don't want to jump in and form more,
right? Wait for the wave up, wait for a
wave down to a support level, wait for a
bullish candlestick pattern. I could
enter and catch the next wave up. So,
that's one way to play it. The other way
to play it of course is to just uh look
at ETFs because ETFs are already
diversified so you don't have any
company specific risk. The two main
space economy ETFs in the market right
now would be the spider S&P Kensho final
frontiers ETF tick symbol RT. This ETF
is more concentrated in industrials and
defense and they invest in a lot of mid
to large cap companies. The other ETF is
the UFO procure space ETF tick symbol
UFO. This particular ETF it it weights
more towards satellite communications
and more towards smaller companies. So
the first one is so-called the safer
one. The second one is more of the
speculative one. Last one year UFO which
is the more speculative small cap one
has slightly outperformed ROTT.
Uh but you can see in the longer term
over the last five years ROT has uh way
outperformed UFO. Um either one you look
at you can see it's a bit parabolic
right now. So if I put in some of the
moving averages
and I'm looking at weekly candles. You
can always look at daily candles as
well. Uh you can see again right now it
is a bit overbought.
All right. So you can see wave up wave
down wave up wave down wave up wave down
wave up wave. A bigger retracement here.
Big retracement here. Wave up, wave
down, wave up, wave down. And right now,
it's kind of like a bit parabolic. It's
a bit overbought here. So, would I, you
know, jump in here? Of course not. I'll
definitely want to wait for it to
retrace. Uh, you know, ideally on the
daily candles, I only like to get in
when it is nearer the 50 moving average.
So, that tells me that it's near the
fair value for ETS, when it's near the
50 moving average on daily candles. If
I'm looking at uh weekly candles, then I
would want it to go to at least the red
line, which is the 20 EMA on the weekly
candles. So, you can see that this tends
to be a bit of a support level. So, at
least retrace somewhere there for a
better entry point again in a bigger
correction. Could it go back to the 50
moving average on weekly candles? Of
course, it could. So again, I would if I
want to be more conservative, I would
wait for a bigger retracement to the 50
moving average, but I could take an
initial position at the 20 EMA.
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Adam Khoo discusses the final three major investment mega trends: digital payments, cybersecurity, and the space economy. He highlights established leaders like Visa and Mastercard for their monopolistic moats and high profitability. In cybersecurity, he focuses on platform leaders such as Palo Alto Networks. Finally, he explores the emerging space economy, driven by collapsing launch costs and new possibilities in data centers and global connectivity, while advising caution and technical strategy for speculative space stocks.
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