Investing For The Next Decade Where are the Opportunities? - PDF document

3/31/2016 Investing For The Next Decade Where are the Opportunities? Disclosures • The data and analysis contained herein are provided “as is” and without any warranty of any kind, either expressed or implied. Past performance may not be indicative of future results. Therefore, no person should assume that the future performance of any specific investment will be profitable. • All investment strategies have the potential for profit or loss. Changes in investment strategies, contributions or withdrawals may materially alter the performance, strategy and results of your portfolio. Economic factors, market conditions, and investment strategies will affect the performance of any portfolio and there are no assurances that it will match or outperform any benchmark. “ A ship is safe anchored in harbor, but that's not what ships are for ” - John Templeton 1

3/31/2016 Objectives Show where the “best” investment opportunities are for the next 10 years Finding Opportunities • Online Search Engines – Wade through thousands of “hits” • Industry Journals – Which ones do you read? • Industry Trade Shows – Vendors selling something • Evaluate Credibility of Your Source – How do they know? 2

3/31/2016 Artificial Intelligence Artificial Intelligence (AI) • The Science of Making Intelligent Machines – Visual perception – Speech recognition – Decision-making – Translation between languages • Alternate Definition – Anything your computer can’t do today AI Investment Opportunities • Apple, Inc. (AAPL) – Perceptio • Makes image-recognition technology for smart phones – VocalIQ • A UK-based startup developing technology to help computers understand human speech • Apple acquired both companies last October 3

3/31/2016 AI Investment Opportunities • International Business Machines (IBM) – Watson • Medical diagnostician – SIGNIFICANTLY reduced error rates in clinical diagnosis • Chess champion • Jeopardy champion • Over 500 patents related to artificial intelligence AI Investment Opportunities • Companies With Heavy AI Investments – Microsoft (MSFT) – Intel (INTC) – Alphabet (GOOGL) – Nippon Electric Company (NEC) – Facebook (FB) – Netflix (NFLX) – Tesla (TSLA) – General Electric (GE) – Walmart (WMT) Robotics 4

3/31/2016 Robotics • Technology to Design, Build, & Operate Robots • The word “Robot” was coined by the Czech playwright, novelist and journalist Karel Čapek , who introduced it in his 1920 play, R.U.R., or Rossum's Universal Robots – Derivative of the Old Czech Slavonic word, rabota, which means servitude of forced labor Robotic Companies • iRobot (IRBT) – Defense Department – Security Operation – Home Robots • Northrop Grumman (NOC) – X-47B Robot Plane • Can land or avoid landing on aircraft carriers Robotic Companies • Alphabet (GOOGL) – Boston Dynamics • Makes robots that walk, run and jump – Mobility over different physical environments – Schaft • Makes servos for humanoid automatons – Nest • Makes smart appliances • Internet of Things (IOT) • http://nest.com 5

3/31/2016 Are These The Droids You’re Looking For? • Intuitive Surgical (ISRG) – Da Vinci Surgical System • Robotic Surgery • Accuray (ARAY) – CyberKnife M6 • Robot laser surgery to remove cancer tumors • Faro Technology (FARO) – Leader in advanced scanning technology (2D & 3D) • Rockwell Automation (ROK) – Industrial automation • ABB Ltd (ABB) – Power Grids • Has 300,000 robotic devices installed worldwide Companies Entering Robotics • Toyota (TM) – Acquired Jaybridge Robotics • Industrial Vehicle Automation • Raytheon (RTN) – Drones, exoskeletons, vision systems • Ekso Bionics Holdings (EKSO) – Exoskeletal products for medical rehab • Amazon.com (AMZN) – Amazon Echo & Echo Dot • Screen-less, voice controlled household computer Synthetic Biology 6

3/31/2016 Synthetic Biology • Synthetic Biology is branch of biology, combining – Biotechnology – Evolutionary biology – Molecular biology – Systems biology – Biophysics – Computer engineering – Genetic engineering. Synthetic Biology Companies • Autodesk (ADSK) – Project Cyborg • Developing bioCAD tools for synthetic biology applications • Designs virtual organisms to fine-tune understanding of complex biological systems http://www.fool.com/investing/general/2015/01/07/3-tech-giants- quietly-investing-in-synthetic-biolo.aspx Synthetic Biology Companies • Intel (INTC) – The Aquarium Project • The company is testing a system that tracks laboratory activity with – Cameras – Smart sensors – Machine learning protocols » Won’t make the same mistakes over and over Ultimate Purpose : Make biological research more replicable 7

3/31/2016 Synthetic Biology Companies • Microsoft (MSFT) – Genetic Engineering of Cells Simulator (GEC) • Researchers can digitally construct biological organisms – New fuel sources – Tires that won’t go flat – Crops resistant to pests – The GEC program tells researchers the DNA sequence needed to construct the result Synthetic Biology Companies • Amgen - (AMGN) • Biogen Inc - (BIIB) • Pfizer – (PFE) • Alexion Pharmaceuticals – (ALXN) • Intrexon Corporation (XON) 3-D Printing 8

3/31/2016 What Is 3-D Printing? • The process of making three dimensional solid objects from a digital file • Also known as additive printing because an object is created by laying down successive layers of material until the entire object is printed 3-D Printing • The first 3-D printer was created in 1984 by Charles Deckard Hull of 3-D Systems Corp. • He named the process Stereo Lithography 3-D Companies • Hewlett Packard Enterprises - (HPE) – Will release 3-D products in 2016 – Developing 3-D technologies • Alphabet – (GOOGL) – $100 million investment into Carbon3D Inc • 3D Systems Corp - (DDD), Stratasys (SSYS) – Great products, lousy stocks • Stock may rebound this year Faro Technologies – (FARO) – Handheld 3-D laser scanner – 3-D measuring equipment • Quality control tools 9

3/31/2016 3-D Companies • Nike (NKE) – Developing ability to allow customers to design their own shoe online and have it printed at a local store • General Electric (GE) – Print complex fuel nozzles for jet engines – Investing $3.5 billion in 3-D technology • Boeing (BA) – Print specialized parts, not possible with standard technology – Less reliance on third party manufacturers Sensor Technology Sensor Technology • A sensor is an object whose purpose is to detect events or changes in its environment, and then provide feedback of some kind – Temperature – Humidity – Distance – Speed – Texture – Biometric Sensors – Light – Blood Pressure – Pulse Rate – Bone Marrow Density 10

3/31/2016 Sensor Technology – Internet of Things • Sensor (IOT) Applications – Track movement and location of casino chips & golf balls – Control pool pumps with smart phone apps – Manage energy usage of household appliances – Smart phones as medical monitors – Track movement of pets or migratory animals Sensor Technology In Autos • GPS Data With Onboard Sensors – Tells you it’s time to change the oil, rotate tires, etc. – Location of the nearest dealer • Onboard Cameras & Computers – Prevent unsafe lane changes – Assist in emergency braking – Help with parking – Automobile black box – Videos from the cameras can be stored and downloaded for accident investigation • Provide information to make safer cars 11

3/31/2016 Sensor Technology Companies • TSLA, GOOGL, et. al. – Self driving cars • iRobot – (IRBT) – Drones – Autonomous Devices • Any Company Involved With : – Artificial Intelligence, Robotics, 3D-Printing, Synthetic Biology or Sensor Technology Of Money Managers And Gurus • “Wall Street is the only place in the world where people arrive in a Rolls Royce to get investment advice from those who get there on the subway.” – Warren Buffett It’s “ONLY” 1% http://www.moneychimp.com/calculator/compound_interest_calculator.htm 12

3/31/2016 It’s “ONLY” 1% http://www.moneychimp.com/calculator/compound_interest_calculator.htm It’s “ONLY” 1% http://www.moneychimp.com/calculator/compound_interest_calculator.htm It’s “ONLY” 1% - Recap • Start with $10,000 – Add $100 monthly for 30 years • With 1% Management Fee – 7% Return – Amount = $197, 410.20 • With 0% Management Fee – 8% Return – Amount = $247,441.61 • Plus +1% Selling Options – 9% Return – Amount = $310,967.05 13

3/31/2016 Sarasota Investors Group • Who Are We? – We are a group of individual investors who manage our own portfolios • What Do We Do? – Our mission is to provide members with the expertise they need to succeed in the expanding world of trading and investing • How Do We Do It? – Growth Stocks – Capital Appreciation – Dividend Growth – Enhance Return On Capital – (ROC) – Selling Options – Enhance Return On Investment - (ROI) – Bonds – Provide Stability & Lower Portfolio Volitility Monthly Lunch • Date – Monday, April 11, 2016 • Time – 12:00 Noon to whenever • Place – Red Lobster – 6747 South Tamiami Trail – Just south of Gulf Gate Drive – (941) 924-1297 Next General Meeting • Date : – Wednesday, April 27, 2016 • Time : – 6:00 pm to 8:00 pm • Place : – The Pines of Sarasota • Cullers Hall • Topic : – Getting Started With Options 14