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6 Investment Megatrends for Explosive Profits Part 3 of 3

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6 Investment Megatrends for Explosive Profits Part 3 of 3

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930 segments

0:00

So, in this video series, I'm looking at

0:02

what are the six most powerful

0:03

investment mega trends that are poised

0:06

to deliver double-digit gains in the

0:08

next 5, 10, 15 years. And this is where

0:11

we want to focus our portfolio in order

0:13

to beat the market. Or at least that's

0:16

what I'm doing. So, if you have not

0:17

watched part one and part two, do watch

0:19

it first. And then we're going to look

0:21

at part three to continue. So, in the

0:23

first two parts, I talked about the

0:25

first three investment mega trends.

0:27

Number one, AI and robotics. Number two,

0:30

AI energy and infrastructure. And number

0:33

three, healthcare and the longevity mega

0:36

trend. And in each of these mega trends,

0:38

I talked about what are the stocks which

0:40

I think have the strongest economic

0:42

modes, highest return on capital and

0:45

strongest growth potential as well as

0:47

potential ETFs that one can look at to

0:50

ride these mega trends. If you think

0:52

that the stock market feels choppy and

0:55

unpredictable this year, you are not

0:56

alone. Many people are very concerned

0:58

about the stock market potential

0:59

overvaluation

1:01

about Trump's policy uncertainty about

1:04

Greenland about a thousand other things.

1:07

So come and join me live at Outlook 2026

1:10

the online edition this coming weekend

1:13

and I'll share with you how I intend to

1:15

position my portfolio and take advantage

1:17

of the volatility this year. It's

1:21

completely free and spots are limited.

1:23

So reserve your spot with the link below

1:26

right now. So let's now focus in this

1:28

video on the last three investment mega

1:31

trends.

1:42

The fourth investment mega trend is in

1:45

digital payments and financial

1:47

infrastructure. So what are the drivers?

1:49

Very simple. Ask yourself this question.

1:51

How often do you now pay in cash? Well,

1:54

hardly. In fact, uh you know, recently

1:56

I've been taking trips to Malaysia from

1:58

Singapore and I've been carrying a lot

2:00

of my uh Malaysian ringit notes and

2:03

increasingly I can't use the notes

2:04

because they say we don't take notes

2:06

anymore. All right? They just want you

2:07

to swipe your card or your or your your

2:11

smartphone, right? So, everywhere in the

2:13

world, whether Singapore, Malaysia, the

2:14

US, in China especially, I don't think

2:16

in China you can get around with cash

2:19

anymore. The drivers of this mega trend

2:21

will be number one increasing cashless

2:23

adoption all around the world. Number

2:25

two is embedded finance where almost

2:28

well a lot of the apps that you use have

2:30

got embedded financial features whether

2:31

is it Apple pay or grab pay or Google

2:34

pay and of course the third thing is

2:36

instant payments. People want to send

2:37

money all around the world instantly.

2:40

And why is this a mega trend? Because

2:42

money movement again is becoming

2:44

digital, is becoming global and is 24/7

2:48

and payments grow with nominal GDP. So

2:51

over time as countries increase their

2:54

nominal GDP, financial payments grow and

2:58

companies that are in this industry will

3:01

grow as a result of it. So what can we

3:04

invest in? What companies will write

3:06

this mega trend? There are three main

3:09

areas and the first area is where I'm

3:11

personally invested in for already quite

3:13

some time. It would be card networks.

3:16

These are what we call the toll roads.

3:18

It's like every time you drive on the

3:20

highway, you have to cross a toll. You

3:22

have to pay to cross the highway. In the

3:24

global digital payment highway, it's a

3:27

duopoly controlled by two companies,

3:29

Visa and Mastercard. So, both of them

3:32

have the strongest economic modes. And

3:34

as you guys know, I only like to invest

3:36

in companies that are monopolistic that

3:38

have got little little or no

3:40

competition. In this case, these are the

3:42

two companies. Now, a lot of people have

3:44

this misconception that Visa and

3:46

Mastercard are credit card companies.

3:48

No, they are not. They are payment

3:50

technology providers.

3:53

American Express is a credit card

3:55

company, but not Visa and Mastercard.

3:58

So, understand that when you get a

4:00

credit card, who issues you the credit

4:02

card? not Visa and Master. It is the

4:04

bank that [clears throat] issues you the

4:06

credit card. Who do you pay interest to?

4:09

The bank, not Visa Mastercard. Visa

4:12

Mastercard only uh provides the payment

4:15

technology that ensures the transaction

4:17

between the merchant bank and the

4:19

consumer's bank goes on smoothly with

4:22

the highest standards of trust and

4:24

security. So recently as you know uh

4:27

President Trump he said he wants to cap

4:30

credit card interest at 10%. Visa and

4:33

Mastercard are not directly affected.

4:35

Who's affected? It is the banks that

4:38

affected not Visa and Mastercard.

4:39

American Express will be affected. So

4:42

the recent drop in Visa Mastercard in my

4:44

opinion is a great opportunity to add

4:46

more shares but I haven't added more

4:48

shares because I think it hasn't dropped

4:50

enough in a sense that is not that

4:53

undervalued. I I would love it to drop a

4:56

lot more to get more undervalued before

4:58

I add more Visa Mastercard because I

5:00

already have quite a big position.

5:03

So, Visa and Mastercard understand why

5:06

it wins even if wallets change the front

5:09

end. So, as you know at the front end

5:11

people may use Apple Pay, they may use

5:14

Grab Pay, they may use Google Pay, they

5:17

may use Stripe. There there are so many

5:20

uh options at the front end. Now,

5:22

whichever one you use, Grab Pay, Apple

5:25

Pay, Stripe, guess what? Visa and

5:27

Mastercard still wins because Visa

5:30

Mastercard, they often sit under the

5:32

hood as a payment rail no matter which

5:36

of these wallets that you use

5:37

ultimately. So, Visa, Mastercard to me

5:40

are the two strongest companies within

5:42

this mega trend. Now, again, do not

5:44

blindly just invest in a stock because

5:46

it's within a mega trend. You have to

5:48

ensure it's a high quality business with

5:51

solid fundamentals. So let's take a look

5:53

at Mastercard and Visa's fundamentals.

5:56

You look at Mastercard for example, you

5:57

can see what are the things I look at. I

5:59

look for very high return on equity

6:02

ideally above 12 to 15%. That's high.

6:05

You can see their return on equity is

6:07

185%. That's insane. And then return on

6:11

invested capital ROIC. I also want it to

6:14

be above 12 to 15%. And it's 54%. That

6:18

is insane. All right. And take a look at

6:21

the consistency of their revenue,

6:25

profits, and cash flow. And you can see

6:28

how consistent it is. You can see over

6:30

the years, their revenue growing very

6:32

consistently in blue. Their operating

6:35

income and net income also increasing

6:37

consistently. We want to see that. So a

6:40

good business is one where over the

6:42

years whether you've got trade war,

6:45

you've got COVID pandemic, you've got

6:48

recession, no matter what happens, their

6:51

revenues keep growing, their profits

6:52

keep growing. That's a great business.

6:55

That's a resilient, predictable

6:56

business. And look at the cash flow. You

6:59

can see that the operating cash flow

7:00

increasing consistently and the free

7:02

cash flow also increasing very

7:04

consistently. And that's why this

7:06

company rates very high on

7:08

predictability, rates very high on

7:11

profitability, on growth. It's not a

7:13

super high growth company, but it's got

7:15

moderate growth, which is good enough

7:17

for me. You can see the projected growth

7:19

rate in the next 3 to 5 years is 15%.

7:22

Pretty good above the S&P 500. And

7:25

longer term beyond that, 18% growth

7:28

rate. And you can see that it's got a

7:30

very strong economic mode, wide economic

7:33

mode as well as very strong balance

7:36

sheet. And in terms of valuation, like I

7:38

said, it is not that cheap, but it's

7:41

also not that expensive right now. You

7:43

can see that the intrinsic value is

7:45

about 531 and the share price is now at

7:49

531. So, it is fairly priced and I mean,

7:53

it's not a sin to buy it now. You won't

7:55

die if you buy it now. But for me as a

7:57

value investor, I like to buy if it's,

7:59

you know, more undervalued. Then I got a

8:01

bigger margin of safety. Same thing with

8:03

Visa. Now between the two, Mastercard

8:06

has slightly higher growth rate, but

8:07

Visa is also pretty strong. You can see

8:10

that Visa's projected growth rate in the

8:13

next 3 to 5 years is 10.69%

8:16

and longterm is 12.36%.

8:19

So still not bad, but not growing as

8:21

fast as Mastercard. Intrinsic value is

8:24

324. and share price 325. Same thing,

8:28

fairly priced, not a big discount right

8:31

now, but again very highly predictable

8:34

company, very profitable, moderate

8:36

growth, strong mode. You can see one

8:39

economic mode, strong financials, and

8:42

what more could you ask for? Now, within

8:44

digital payments and financial

8:45

infrastructure, some people may look at

8:47

two other areas of investments. The

8:49

other one would be to invest in issuer

8:52

core processing. Now, who are issuers?

8:54

Issuers are basically banks. Banks that

8:56

issue cards and they need software at

8:59

the back end that helps them to run

9:01

their internal payments engine to uh

9:04

manage their accounts and balances. So

9:06

two companies that focus on this are

9:08

Feerfol FISV where the share price

9:11

recently dropped significantly after

9:13

they lowered their uh projected growth

9:16

guidance and they found that they

9:18

underinvested in infrastructure for

9:20

quite a number of years and their main

9:22

competitor Fidelity National Information

9:24

Services FIS. You also have got

9:26

companies that do merchant acquiring

9:28

which are basically [clears throat] they

9:29

go out there and they acquire merchants

9:32

or shops to use their hardware as well

9:35

as they offer payment processing

9:36

services. For example, yen t symbol ad

9:40

Y. You got global payments symbol GPN.

9:43

You got Flyw Wire Cop and of course the

9:45

very famous PayPal ticker symbol PPL

9:48

which I never invested in and I'll never

9:50

invest in no matter how cheap it looks

9:51

because personally I do not like PayPal

9:54

as a merchant myself. In fact, my

9:56

company, we used to use PayPal, but

9:58

because a lot a lot of the problems that

10:00

we have with PayPal that I won't mention

10:01

here, we have chosen to use Stripe

10:04

instead. But that goes to show you that,

10:06

you know, among all these companies, I

10:08

don't think that any of them have a very

10:10

strong economic mode that I'll be

10:12

interested to invest in um as a company.

10:16

So, neither of these companies I'm

10:18

actually interested to invest in

10:20

personally. Again, this is not financial

10:21

advice. You could of course invest in

10:23

them if you think they're great. But

10:24

personally for me in this entire mega

10:27

trend, I'm happy with just Visa and

10:30

Mastercard. And so as a result, I don't

10:32

see any need to invest in any ETFs

10:34

because as long as I can find companies

10:37

that are monopolistic, I rather invest

10:39

in individual companies. But within an

10:41

industry, if I find that there's no

10:43

company that's monopolistic or

10:45

duopolistic, then I may look at an ETF

10:48

to capture the growth of the entire

10:50

industry.

10:51

Let's move on to the fifth investment

10:53

mega trend and this is a very big one

10:55

and it is cyber security and data

10:58

protection. Again, you don't have to be

11:00

a genius to figure out that this is a

11:03

big business and you only grow. Why? As

11:06

everything goes online, everything is

11:08

digital, everything is um on the web,

11:11

you're going to get more and more

11:13

hacking, you're going to get more and

11:15

more cyber scams. So, every company will

11:19

need cyber security.

11:21

So the rising cyber threats and cloud

11:24

migration of companies moving to the

11:26

cloud is a huge growth uh uh driver for

11:31

this mega trend. So you find that for

11:33

corporations security demand grows

11:36

faster than IT budgets due to risk

11:39

profiles. You have to protect your uh

11:42

IT. So there are three areas uh you can

11:46

look at. Number one is platform security

11:48

which is the all-in-one security

11:50

operating system. So these are platform

11:53

vendors that bundle firewall plus cloud

11:56

plus endpoint security plus security

11:59

operation center SOC into one contract.

12:03

So very high switching cost for these

12:04

companies and strong upsell potential.

12:07

And the two companies with the strongest

12:09

modes in this area would be Paulo Auto

12:13

Networks which I've owned for many many

12:15

years. Let's take a symbol P A N W. In

12:17

fact, I think this is um kind of like

12:20

the Rolls-Royce and a Ferrari of this

12:23

industry because Palo Alto has the

12:26

broadest enterprise platform play. They

12:28

do network cloud and SOC. And in second

12:32

place, very close behind is Foret,

12:34

ticker symbol FDNT, which I also own for

12:36

many years. Products include hardware

12:37

and software. They've got a huge

12:39

installed base and strong unit economics

12:41

for network edge. So my analogy is like

12:44

Palo Alto is like the Ferrari, the

12:46

Rolls-Royce and for is kind of like the

12:48

Toyota right which is u not as premium

12:52

uh but it's it's very popular as well.

12:54

They both have solid fundamentals. If

12:56

you take a look at Palo Alto you can see

12:59

it ranks very high on predictability,

13:01

very high in profitability, very high

13:04

growth, very strong economic mode,

13:06

medium financial strength and you can

13:08

see ROIC at 14.6% 6% and ROE at 15.33%

13:14

which is relatively strong. Uh intrinsic

13:16

value right now is 195 and you can see

13:18

it's selling at 184. So it is slightly

13:21

undervalued. Now for cloud security and

13:24

cloudnative application protection

13:26

platform segment you can see that again

13:28

Palo Alto is one of the leaders in that

13:31

this segment under their Prisma cloud uh

13:34

platform. And then you've got

13:35

Crowdstrike, which I also own. But Crowd

13:38

Strike, if you look at the fundamentals,

13:40

um you can see that it's more of a

13:42

speculative growth company where growth

13:44

is very high, but it doesn't yet have

13:46

consistent profits and cash flow, which

13:49

is fine for a speculative growth

13:51

company. Uh but I would normally take a

13:54

smaller position given that it's more

13:56

speculative and is also a bit more uh

13:59

overvalued at this point of time, but I

14:01

would love to add more if it gets more

14:03

undervalued. The next segment will be

14:06

SSC, security service age and SASSE,

14:09

securing users everywhere. So as work

14:12

moves hybrid and apps move to the cloud,

14:15

companies shifted from castle walls to

14:18

securing access everywhere. Um, so the

14:22

strongest modes in this area will be

14:24

Zcaler ticker symbol ZS and once again

14:27

Paulo Auto. You can see that Crowdstrike

14:29

like I mentioned is a great company,

14:32

very high growth company growing at 17%

14:35

for the next 3 to 5 years and longerterm

14:38

growing at 22%. But it's not yet

14:40

consistently profitable. If you take a

14:42

look, revenue growing like crazy, but it

14:45

is still losing money. It is still

14:47

unprofitable, but you can see it is

14:49

already cash flow positive. net

14:51

operating cash flow increasing and

14:53

currently uh still overvalued even

14:56

though you can see it retraced

14:59

uh it retraced a bit over there. All

15:01

right, it's you can see if you look at

15:02

the charts over here uh wave up, wave

15:05

down, wave up, wave down, wave up, wave

15:07

down, wave up, wave down, but it is uh

15:10

slightly above its intrinsic value. Um

15:13

now I do have a position in crowd

15:15

strike. I've been holding it for quite a

15:17

number of years and I would love to buy

15:18

more crowd strike but again I would like

15:21

it to get undervalued before I add more

15:24

and when it comes to these more

15:25

speculative growth stocks where the

15:27

profits are not yet consistent I'm a bit

15:30

more uh cautious so I take a much

15:32

smaller position as compared to a

15:34

company like Palo Alto where they've got

15:36

very consistent uh profitability where I

15:39

dare to take a larger position now we

15:42

come to the last investment mega trend

15:44

now I must say that this investment

15:46

vector trend is really exciting and I

15:49

think that it's going to be really big

15:51

in the next you know 20 30 years but as

15:55

of now it's still quite speculative.

15:57

Most of the companies in this investment

15:59

mega trend don't yet make money but they

16:01

could make a lot of money in the future.

16:04

So what mega trend am I talking about?

16:06

I'm talking about the space economy. So

16:09

why the sudden buzz in the space

16:11

economy? Why is it that more and more

16:13

people are talking about it? In fact, a

16:14

lot of the shares of the companies have

16:16

started running up in anticipation of

16:19

future earnings potential. A few

16:21

reasons, a few drivers. Number one, of

16:24

course, would be uh the sudden IPO of

16:28

Space X uh this year that is targeted to

16:31

be a $ 1.5 trillion IPO. And of course,

16:34

that has created a lot of excitement

16:35

around other space related companies.

16:39

But that's that's just one thing. But

16:41

the main reason why now it's gaining

16:44

more and more um traction in terms of

16:47

the space economy is because there's

16:49

been recently a 90%

16:52

[clears throat] commercial launch cost

16:54

collapse. What does this mean? In the

16:57

past, it cost a lot of money to send a

16:59

rocket into space. In fact, it cost

17:02

something like $18,000 to send every 1

17:05

kilogram of a rocket into space. But

17:09

because Space X as well as Rocket Labs,

17:11

they have innovated reusable rockets,

17:14

you can now send uh a kilogram into

17:17

space uh at as low as $1,000 and the

17:20

cost is dropping rapidly. So now that

17:23

it's so much cheaper to send things into

17:26

space, a lot of things are now becoming

17:29

commercially viable, which they never

17:31

were in the past. For example,

17:34

space-based data centers. And this

17:36

doesn't sound now initially may sound a

17:38

bit crazy but it's not because now

17:41

you've got the CEO of Google um Sudai

17:45

Picha or Alphabet saying that they're

17:47

going to create uh space data centers

17:49

very soon. They're investing in space

17:51

data centers. By the way, they own 8% of

17:53

Space X. Uh you've got um Amazon CEO

17:57

saying the same thing. So many of these

17:58

mega cap companies they are now drawing

18:00

plans to build data centers into space.

18:04

And now because again commercial launch

18:07

cost is collapsing is becoming more and

18:10

more feasible. So why build data centers

18:13

into space and and not just on earth?

18:16

Well the the the the challenge with

18:18

building data centers on earth of course

18:20

number one is you need a lot of land.

18:21

Number two you need a lot of power which

18:23

has a shortage of power as I've been

18:25

talking about in the previous slides.

18:27

The great thing about space uh based

18:29

data centers is that you've got

18:31

unlimited

18:32

solar power and as you know data centers

18:35

create a lot of heat and in space

18:39

there's a natural cooling from the

18:41

vacuum in space. So space is a perfect

18:44

place to put all the data centers

18:47

required

18:49

uh to run the AI factories to generate

18:52

all the robotics and and all the stuff

18:55

that we need in the future. So that's a

18:58

really really big business. So that's

19:00

number three. The fourth thing is that

19:02

as you know the US and its allies are

19:05

now investing more and more money,

19:07

hundreds of billions into missile

19:09

defense shields. And of course the US

19:12

has got this golden dome that now now

19:14

it's going to start deploying around

19:17

above Greenland as part of Trump's deal.

19:20

The fifth thing is also a very big deal

19:22

and it is low earth orbit connectivity

19:25

or LEO connectivity. So what is this

19:28

Starink? Think of Starink. So Starink

19:30

has been providing uh LEO connectivity

19:33

now all around the world especially in

19:36

areas which have got dead zones and so

19:38

on so forth. Now, so LEO connectivity is

19:41

basically providing internet, voice, and

19:43

data centers in using satellites in low

19:46

earth orbits. And so, you know, in the

19:49

past, you use use a satellite phone, you

19:51

need a special phone, and it's not that

19:54

clear. But now with low earth orbit

19:56

connectivity, you can use a normal

19:59

smartphone to access the internet and

20:03

voice and data via these low orbiting

20:07

constellation of satellites. So what

20:09

does this mean? That means in the future

20:11

you do not need any more of these uh

20:13

territorial or landbased cell towers.

20:18

And so with this, you're going to get

20:20

global broadband anywhere, even in dead

20:22

zones, even in countries where they want

20:25

to block the internet. And again,

20:26

existing smartphones will be able to

20:28

connect directly to satellites. Our

20:31

iPhones can connect directly to a

20:33

satellite. And these companies that

20:35

provide this service like Starling for

20:37

example, and another company, which is

20:39

uh as I'll talk about in a while, they

20:42

will charge monthly subscriptions just

20:44

like your telco companies. Now could

20:46

this be a big mass market disruption to

20:50

kill many of the existing legacy telos

20:53

maybe right? So that could be something

20:55

really really big. So these are the five

20:58

main things that are now driving

21:00

excitement around space related

21:03

companies and the space economy is

21:05

projected to grow from currently $630

21:08

billion to $1.8 trillion by 2035. So

21:13

what are the leading companies in the

21:14

space economy? Well, first let's take a

21:17

look at the different segments of this

21:19

economy. Number one would be the

21:21

infrastructure leaders. Uh the upcoming

21:23

one of course is SpaceX. That's the

21:25

granddaddy of them all. But currently

21:27

they are not listed. They are still a

21:28

private company. But of course once they

21:30

get listed then that should draw a lot

21:31

of investor attention. Actually be very

21:33

interested to buy Space X shares. But

21:35

their targeted IPO price of 1.5 trillion

21:38

seems a bit expensive. And of course,

21:40

that's what companies do when they first

21:42

sell to the public. They want to price

21:44

themselves as high as possible. Well,

21:46

the good news is that if you take a look

21:47

at some great companies in the past that

21:49

listed, whether is it Visa that listed

21:52

many years ago, which I bought them by

21:53

the way, not at listing a couple of uh

21:57

months down the road, and of course,

21:59

when Facebook listed, what happened?

22:00

Many times, the share price would drop

22:03

at least 50%

22:05

before eventually going to the moon. All

22:08

right, pun intended in this case. So,

22:11

same thing for SpaceX. Once SpaceX

22:13

lives, I'll be watching it. If it drops

22:15

like 50% or more, I'll be interested to

22:18

pick up some shares because I think that

22:19

in this space economy, SpaceX will

22:21

definitely be the one with the strongest

22:23

economic mode and SpaceX is already

22:26

profitable and it is already cash flow

22:29

positive. All right. Now, so besides

22:32

SpaceX, what else is there? Uh you've

22:34

got the other infrastructure

22:36

infrastructure leaders. Uh Rocket Lab is

22:39

listed and they are the closest

22:41

competitor to Space X. In fact, they are

22:43

known as the second Space X. They are

22:46

the only other private company that's

22:48

consistently launching rockets and they

22:51

also have reusable rockets. Their space

22:53

systems division which makes satellite

22:56

parts now accounts for a huge portion of

22:58

their revenue making them a diversified

23:01

picks and shovels play as well. Besides

23:04

being an infrastructure play, the other

23:06

infrastructure leader is Red Wire,

23:08

ticker symbol RDW.

23:11

Uh this company's a leader in space

23:12

infrastructure and orbital

23:14

manufacturing. They provide the solar

23:16

arrays and robotics needed for the new

23:19

orbital data center trend.

23:22

So that's the first segment. Second

23:24

segment would be the data and

23:26

connectivity plays of which you have got

23:28

two main ones. Of course, there are many

23:30

more. These are the two leading

23:31

companies. uh as space mobile which I

23:34

mentioned earlier on or as so they are

23:37

building the first space-based cellular

23:39

broadband network to connect directly to

23:42

standalone smartphones where all our

23:44

smartphones can connect connect directly

23:46

to the satellite and anywhere in the

23:47

world we have got internet we got voice

23:49

we got data and of course they compete

23:52

directly with Starlink uh that is owned

23:55

by Space X that's under Elon Mus and

23:58

then there's planet labs so planet Labs

24:00

or PL ticker symbol

24:02

They are known as the Google maps of

24:04

space. They operate the largest fleet of

24:07

Earth imaging satellites. And as AI gets

24:10

better at analyzing satellite imagery

24:13

for agriculture, defense, and climate,

24:16

their data will become more and more

24:18

valuable. Yeah. By the way, fun fact,

24:21

Alphabet, which I have a big position

24:23

in, and I think a lot of you also own

24:24

Alphabet, which owns Google and YouTube,

24:26

they own 8% of um SpaceX. So indirectly

24:32

if you own Alphabet you already have

24:34

exposure to this space economy.

24:39

The third segment of the space economy

24:41

would be the lunar and exploration

24:43

specialist. Uh this part I'm not that

24:46

keen about. I don't think the total

24:48

addressable market is as big as the

24:50

first two but I'll just mention it.

24:53

Leading company in this area will be

24:54

intuitive machines sticker symbol Lun R.

24:57

So they're the leading provider of lunar

24:59

landers and moonto-earth communication

25:01

services. They are the primary

25:03

beneficiary of NASA's move to outsource

25:05

lunar logistics. Again, bear in mind

25:08

that all these companies I mentioned are

25:11

most of them are not profitable. They

25:13

are still losing a lot of money, but

25:15

their share price has already started

25:17

running because people are anticipating

25:19

that in the future they're going to make

25:22

a lot of money. Yeah. And as always, uh,

25:25

I don't like to chase them after they've

25:27

run, okay? So, I wouldn't buy them right

25:29

now. You know, I'll wait for a pullback.

25:31

I'll wait for retracement. And I'll look

25:33

for lowrisk entries uh to get in. And

25:37

there's no rush. Like I said, this thing

25:39

is going to go on. This investment trend

25:41

is going to go on for the next 10, 20,

25:44

30, 40 years. Uh, it's not a sprint.

25:47

It's it's a long-term marit marathon,

25:49

right? And unless I can get in at a

25:51

attractive level or attractive price, uh

25:54

I won't for more to get in. So like I

25:57

said, most of these stocks are very

25:59

speculative. They're not profitable yet.

26:02

Uh and some of them are subjected to

26:04

binary events. Like if the rocket fails

26:07

to launch, then the share price could

26:08

collapse a lot, right? If the rocket

26:10

launches and it goes up. So it's it's

26:12

very high risk at this stage. Now again,

26:15

if we take a look at these these

26:17

individual companies that I mentioned,

26:18

you notice that most of them don't make

26:20

money. And even if they do make money,

26:22

it is not consistently profitable yet.

26:24

And so, as a result, it's very hard to

26:27

value these companies because they could

26:29

be worth so much or this much or this

26:31

much. It's very hard because there's no

26:35

solid historical track record. All

26:37

right? So, that is what makes them more

26:39

risky. So, does it mean that we don't

26:41

invest in them? We could still invest in

26:44

them, but again for speculative

26:46

investments, I'll take a much smaller

26:48

position. Uh, and some of them I may not

26:50

invest in them as in um close mines and

26:53

just buy, but I may enter them as more

26:56

uh trades where I'll have like a

26:58

stop-loss in place so that if it if it

27:01

really doesn't work out, at least I get

27:03

out and I minimize my losses. So, um I

27:06

do invest in speculative stocks from

27:08

time to time and I do trade them from

27:10

time to time, but again much smaller

27:13

positions because they're a lot more uh

27:16

unpredictable if you will. But the ones

27:18

that are very predictable, yeah, I'll

27:20

invest really big and I'll close my eyes

27:22

and I just take the ride. So, so it's a

27:24

different form of investing. So, let's

27:26

let's look at a few of them. So, Rocket

27:28

Lab, which I mentioned, is the second

27:30

Space X. Uh they've got a narrow

27:32

economic mode. Uh and again you can see

27:35

if you look at the financials over here

27:39

um click on bar chart that's easy to

27:42

read. So you can see yeah revenue is

27:44

growing very fast but again they are

27:47

still unprofitable. In fact their losses

27:49

are getting bigger and bigger and

27:52

there's nothing wrong with that

27:53

especially if it's a new company that's

27:54

what usually happens but eventually um

27:57

if things work out then they'll become

27:59

very profitable. So a lot of people are

28:01

now paying up and buying the shares

28:03

already pricing in the future

28:05

profitability before it it has happened.

28:08

Hence it's very speculative. If you look

28:10

at free cash flow, free cash flow is

28:12

still negative. So they're still burning

28:13

cash. Um

28:16

and so when a company doesn't make money

28:18

right now, it's really hard to value

28:21

because a lot of the valuation is based

28:23

on, you know, what you think it could be

28:26

in the future. you're you're paying for

28:28

a castle that has not been built yet and

28:31

that that's always the challenge. So if

28:33

we look at for example intrinsic value

28:35

over here usually for companies that

28:37

don't make money uh the way we value

28:40

them is we look at the price to sales

28:42

ratio or we use a price to sales growth

28:44

ratio or we use the rule of 40.

28:48

Uh so in terms of uh mean price to sales

28:52

ratio if you use that one then it could

28:53

be worth $64. Right now it's selling at

28:56

87. All right. So even if you use the

28:59

mean price of sales

29:01

uh which values it at $64

29:05

at 87 it's still overpriced. All right.

29:08

And if you use price to sales growth

29:10

ratio method then it's only worth $7.

29:13

Right? So you can see that there are

29:14

many ways to value it. We can't value it

29:16

using discounted cash flow because

29:18

there's no cash flow. We can't value

29:20

using discounted net income. There's no

29:21

net income. We can only value it using

29:24

you know price to sales or price to book

29:27

which doesn't make sense or price to

29:29

sales growth. Again uh Oracle value

29:32

tends to be more conservative. It kind

29:34

of takes an average and adjust a lot of

29:37

the numbers. So the Oracle value is $13.

29:40

So you could take that as the most

29:42

conservative valuation. But if you want

29:43

to be more optimistic and say okay based

29:45

on mean price of sales it's worth $64.

29:48

You can also do that. Yeah. But either

29:51

case, even if you take the higher

29:52

valuation, uh the share price is still a

29:55

bit overvalued right now. So that's

29:57

Rocket Lab for example. If you take a

30:00

look at uh as Space Mobile, currently it

30:04

doesn't yet have a strong economic mode.

30:06

I think it will in the future, but not

30:09

yet. And that's what makes it more

30:11

speculative. And again, it's not making

30:14

money as well. You can look at

30:15

financials

30:17

and you can see that uh still losing

30:20

money revenue growing but still losing

30:22

money and is burning a lot of cash free

30:25

cash flow very negative burning a lot of

30:27

cash. So how do you how do you value

30:28

something like that? It it's really

30:30

difficult. Again, if you look at

30:32

intrinsic value, again,

30:34

you can't use discounted cash flow.

30:36

There's no cash flow. There's no income.

30:39

So, how do you value it? Again, the only

30:41

way is look at a mean price to sales

30:43

ratio, and that would value it at about

30:46

$51.

30:49

If you look at a price to sales growth

30:51

ratio, that values it at at $3. So,

30:53

there's a wide range of what it could

30:55

be. If you take oracle value, which

30:57

again is more conservative, then it's

30:59

worth like $33.

31:02

Now, there are some analysts that are

31:05

valuing it at $100. You may say, "How do

31:08

they get $100 valuation?" Well, it's

31:10

because this company as

31:13

uh they recently said that they their

31:16

target is to hit $1.12 billion in free

31:21

cash flow by 2030. That that's their

31:24

target. So if you believe that's going

31:27

to happen and you do a discounted free

31:29

cash flow valuation method based on that

31:32

then the shares are worth $100

31:36

about $102 if you will. And if you value

31:39

it at $102 then at a current share price

31:43

of uh uh $103 that is fairly priced.

31:47

Okay. So can we really value $100? Well

31:50

it depends right. So, if you really

31:51

think they're going to hit, you know,

31:53

1.12 billion 2030, then yes, it's worth

31:55

$100. But again, it's just a promise

31:58

they're making, you know, and and that's

32:00

always the tough part when you value a

32:02

company that has not made money yet,

32:04

that it's they're just shooting up in

32:06

the air, but uh if you believe it can

32:08

happen, it can happen. Um let's look at

32:10

the last one. Planet Labs again, you can

32:13

see, you know, um doesn't make money as

32:16

well. So, they're all very very

32:17

speculative. So, what do I do in this

32:19

case? So in this case, I may choose to

32:22

buy some of the individual companies,

32:24

but again, not as an investment because

32:26

it's too risky to invest. I'll put it in

32:29

more like a trade where I'll look for

32:32

lowrisk entry point, enter a lowrisisk

32:35

entry point, uh, put a stop-loss, and

32:37

then I'll have like a initial profit

32:40

targets where I'll take profit slowly as

32:42

the price runs. So let me give you an

32:44

example of how I would do that. So if

32:47

you look at rocket lab for example um I

32:49

I can look at weekly candles can look at

32:51

daily candles depending on your time

32:52

frame uh daily candles you tend to be

32:56

more volatile especially for for these

32:58

stocks. So if you look at uh weekly

33:01

candles you can see again watch the

33:03

price action pattern right? So you've

33:04

got a wave up you've got a wave down

33:06

you've got a wave up you've got a wave

33:08

down and now you can see it's waving up

33:10

here.

33:12

So ideally I would like so what's a

33:14

lowrisk entry point? The lower risk

33:16

entry point is you want to wait for a

33:18

future wave down to a support level. So

33:21

you can see that this has been a pretty

33:24

strong support which is roughly at the

33:26

40 EMA or 50 moving average. So it

33:28

retraces to a support here and I can see

33:32

a bullish candlestick pattern telling me

33:34

that it's going to continue the trend.

33:37

Then I could enter right there and place

33:39

a stop-loss uh right below that swing

33:41

low. So that could be a potential future

33:44

entry into rocket lapse. Again, more for

33:47

trade than a uh closed eyes kind of

33:51

investment. So the difference is trading

33:53

I I place a stop-loss. It's like trading

33:55

is like a one night stand. I got to use

33:56

protection. Whereas investment is like

33:58

marriage. I I don't need to use

34:00

protection because it is already a

34:02

proven business model that actually

34:04

makes money. So that's Rocket Lab. For

34:07

example, if you look at AS, let's look

34:09

at ASS.

34:11

Uh, again, look at the price action.

34:13

Same thing, right? You can see, you

34:14

know, you know, wave up, wave down, wave

34:16

up, wave down, wave up, wave down. Now,

34:18

it's waving up. So, when it's waving up,

34:20

I don't want to jump in and form more,

34:22

right? Wait for the wave up, wait for a

34:23

wave down to a support level, wait for a

34:26

bullish candlestick pattern. I could

34:28

enter and catch the next wave up. So,

34:31

that's one way to play it. The other way

34:33

to play it of course is to just uh look

34:35

at ETFs because ETFs are already

34:38

diversified so you don't have any

34:40

company specific risk. The two main

34:42

space economy ETFs in the market right

34:45

now would be the spider S&P Kensho final

34:48

frontiers ETF tick symbol RT. This ETF

34:52

is more concentrated in industrials and

34:54

defense and they invest in a lot of mid

34:56

to large cap companies. The other ETF is

35:00

the UFO procure space ETF tick symbol

35:03

UFO. This particular ETF it it weights

35:07

more towards satellite communications

35:09

and more towards smaller companies. So

35:12

the first one is so-called the safer

35:14

one. The second one is more of the

35:17

speculative one. Last one year UFO which

35:19

is the more speculative small cap one

35:21

has slightly outperformed ROTT.

35:24

Uh but you can see in the longer term

35:26

over the last five years ROT has uh way

35:30

outperformed UFO. Um either one you look

35:33

at you can see it's a bit parabolic

35:35

right now. So if I put in some of the

35:36

moving averages

35:39

and I'm looking at weekly candles. You

35:40

can always look at daily candles as

35:42

well. Uh you can see again right now it

35:45

is a bit overbought.

35:47

All right. So you can see wave up wave

35:49

down wave up wave down wave up wave down

35:51

wave up wave. A bigger retracement here.

35:53

Big retracement here. Wave up, wave

35:55

down, wave up, wave down. And right now,

35:56

it's kind of like a bit parabolic. It's

35:58

a bit overbought here. So, would I, you

36:00

know, jump in here? Of course not. I'll

36:02

definitely want to wait for it to

36:03

retrace. Uh, you know, ideally on the

36:06

daily candles, I only like to get in

36:08

when it is nearer the 50 moving average.

36:11

So, that tells me that it's near the

36:13

fair value for ETS, when it's near the

36:15

50 moving average on daily candles. If

36:18

I'm looking at uh weekly candles, then I

36:22

would want it to go to at least the red

36:25

line, which is the 20 EMA on the weekly

36:29

candles. So, you can see that this tends

36:31

to be a bit of a support level. So, at

36:34

least retrace somewhere there for a

36:38

better entry point again in a bigger

36:40

correction. Could it go back to the 50

36:42

moving average on weekly candles? Of

36:45

course, it could. So again, I would if I

36:48

want to be more conservative, I would

36:50

wait for a bigger retracement to the 50

36:51

moving average, but I could take an

36:53

initial position at the 20 EMA.

37:02

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37:32

Coup and may the markets be with

Interactive Summary

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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