It’s a script that has played out with numerous commodities including potash, graphite, cobalt, rare earths, vanadium, and even marijuana (though not strictly a commodity).

And it’s now playing out with helium, the second-most abundant element in the Universe behind only hydrogen, yet also one of the rarest elements on our planet.

Helium’s scarcity and value stems from the fact that it’s an inert gas that does readily react with other elements or much of it generated by earth’s natural processes. It’s also 7x lighter than air and readily leaks into space and eventually gets torn away by solar winds.

Each year, our planet generates about 3,000 tons of helium through radioactive decay deep in the bowels of the earth. Unfortunately, the vast majority leaks off into space, and the little that  is trapped in the atmosphere comes nowhere close to meeting our global demand of 32,000 tons of helium per year (about 6.2 billion cubic feet measured at 70°F and under earth’s normal atmosphere). 

Indeed, the majority of our helium reserves are found in ancient shale formations. Helium is, therefore, regarded as a finite, non-renewable resource.

Yet, many investors have been sleeping on an unraveling helium boom, thanks to

explosive growth in the semiconductor and healthcare industries as well as space and quantum computing.

This rare gas is endowed with unique qualities that make it indispensable in many key applications including space exploration, rocketry, high-level scientific applications, in the medical industry for MRI scanners, fiber optics, electronics, telecommunications, superconductivity, underwater breathing, welding, cryogenic shielding, leak detection, and in lifting balloons. 

At a melting point of -261.1°C (-429°F), helium has the lowest melting point of any element, meaning there’s no substitute for the gas where ultra-low temperatures are required such as superconductors. For instance, the fastest train ever built, the SC MagLev, capable of speeds of more than 600 km per hour, uses liquid helium to cool the superconducting material, niobium‐titanium alloy, to 452 degrees Fahrenheit below zero.

According to ResearchAndMarkets, the global helium market is projected to reach US$18.2B in 2025, growing at a CAGR of 11.2% during the period 2021 to 2025 mainly driven by robust medical and consumer electronics demand. About 30% of the world’s helium supply goes into MRI scanners while another 20% goes into the manufacture of hard disks and semiconductors.

Meanwhile, Big Tech companies such as Google, Facebook, Amazon, and Netflix are heavy users of helium in their massive data centers.

With demand constantly outstripping supply and the federal government no longer freely selling helium, prices have skyrocketed, hitting $35 per liter in 2019, more than double an average of $14.60 per liter they commanded three years ago.

Helium Uses

Source: Helium One

No more helium from the Fed

The biggest chink in the helium supply chain is the fact that a large chunk of the supply is in the hands of the U.S. federal government.

Back in 1925 when helium-based airships seemed like they would become vital to national defense, the U.S. government created the Federal Helium Reserve (FHR) out of a giant, abandoned salt mine located 12 miles northwest of Amarillo, Texas. Over several decades, FHR collected as much helium as it could and essentially became the world’s strategic helium reserve supplying ~40% of the world’s needs.

Unfortunately, the FHR eventually ran into debt trouble to the tune of billions of dollars thanks to its habit of selling helium at well below market prices. In 1996, the U.S. government passed laws mandating FHR to sell off its reserves and close in 2021 in an effort to recoup its debts.

The Bureau of Land Management (BLM) has outlined the process and timeline by which the FHR will dispose of its remaining helium and helium assets.  BLM, which now manages the reserve, managed to sell off most of the stored helium to all users, with the remaining 3 billion cubic feet (84 million cubic meters) by 2018 restricted for sale to only federal users, including universities that use helium for federally sponsored research. BLM held its last Crude Helium Auction in Amarillo, Texas, in 2019 with the price rising 135%, from $119/Mcf in 2018 to $280/Mcf in 2019. 

The sale of crude helium to private industry has been discontinued and the remaining stockpile is earmarked for Federal users only.

The sale deadline has since then been extended to 30 September 2022, but  privatization likely won’t be completed until at least 2023.

There are a ton of stocks to play in this space, including giant Exxon (NYSE:XOM), which produces about 25% of the world’s helium supply at its plant in LaBarge, Wyoming. Regeneron (NASDAQ:REGN) is also poised to become a major helium player, with South Africa’s first-ever liquid helium processing technology. And plenty of small-caps form some potentially juicy new entrants to this space. 

This is one to watch. It’s not about balloons anymore. 

The post Abundant Yet Rare: The Juicy Helium Paradox appeared first on Global Investment Daily.

Helium is an inert gas that’s so rare on our planet, partly due to the fact that it’s 7x lighter than air and can, therefore, readily leak into space and eventually get torn away by solar winds but also because not much is generated by earth’s natural processes.

The helium that we find on earth is a product of radioactive decay from minerals made of uranium and thorium. These emit alpha particles composed of two protons and two neutrons, which then attract electrons turning into them into helium atoms. Each year, our planet produces about 3,000 tons of helium through radioactive decay deep in the bowels of the earth.

Unfortunately, the vast majority leaks off into space, and whatever little that is trapped comes nowhere close to meeting our global demand of 32,000 tons of helium per year (about 6.2 billion cubic feet measured at 70°F and under earth’s normal atmosphere). The vast majority of our helium reserves come from millions of years of gradual accumulation especially in shale formations.

Helium is, therefore, regarded as a finite, non-renewable resource.

This presents a big conundrum as we try to feed our growing helium habit.

Helium’s unique properties make it an essential component in cryogenic shielding, leak detection, heat transfer, and analytical and lifting applications. At a melting point of -261.1°C (-429°F), helium has the lowest melting point of any element, meaning there’s no substitute for the gas where ultra-low temperatures are required. This makes helium indispensable in the field of superconductors. Helium is also a critical component in the manufacturing process, such as MRIs and semiconductor chip manufacturing.

Explosive growth in the semiconductor and healthcare industries as well as space and quantum computing have been driving global demand in helium.

A good 10% of our annual supply goes into party balloons, and the global shortage eased due to widespread lockdown and social distancing measures–but only temporarily.

With demand constantly outstripping supply, helium prices have predictably skyrocketed, hitting $35 per liter in 2019, more than double an average of $14.60 per liter they commanded three years ago.

The global helium market was worth $10.6 billion in 2019, and projected to grow to $15.73 billion by 2023, good for a compound annual growth rate (CAGR) of 11%.

With the helium supply crunch not about to go anywhere any time soon, helium bulls clearly have the upperhand here.

Helium Uses

Source: Helium One

Dwindling supplies

Only a small percentage of the helium generated through natural means is readily accessible, and even a smaller proportion is economically feasible to collect.

After being formed deep in the bowels of the earth, helium tends to rise and collect in the same deposits as natural gas. In fact, most of our helium supply comes from natural gas companies which collect the gas as ancillary benefit. Unfortunately, current technological limits mean that helium is only economically recoverable at concentrations greater than 0.3%. Consequently, the vast majority of the helium in gas reserves is simply vented away.

Source: Big Think

No more helium from the Fed

But the biggest chink in the helium supply chain is the fact that a large chunk of the supply is in the hands of the U.S. federal government.

Back in 1925 when helium-based airships seemed like they would become vital to national defense, the U.S. government created the Federal Helium Reserve (FHR) out of a giant, abandoned salt mine located 12 miles northwest of Amarillo, Texas. Over several decades, FHR collected as much helium as it could and essentially became the world’s strategic helium reserve supplying ~40% of the world’s needs.

Unfortunately, the FHR eventually ran into debt trouble to the tune of billions of dollars thanks to its habit of selling helium at well below market prices. In 1996, the U.S. government passed laws mandating FHR to sell off its reserves and close in 2021 in an effort to recoup its debts.

The Bureau of Land Management (BLM) has outlined the process and timeline by which the FHR will dispose of its remaining helium and helium assets.  BLM, which now manages the reserve, managed to sell off most of the stored helium to all users, with the remaining 3 billion cubic feet (84 million cubic meters) by 2018 restricted for sale to only federal users, including universities that use helium for federally sponsored research. BLM held its last Crude Helium Auction in Amarillo, Texas, in 2019 with the price rising 135%, from $119/Mcf in 2018 to $280/Mcf in 2019. 

The sale of crude helium to private industry has been discontinued and the remaining stockpile is earmarked for Federal users only.

The sale deadline has since then been extended to 30 September 2022, but  privatization likely won’t be completed until at least 2023.

There are a ton of stocks to play in this space, including giant Exxon (NYSE:XOM), which produces about 25% of the world’s helium supply at its plant in LaBarge, Wyoming. Regeneron(NASDAQ:REGN) is also poised to become a major helium player, with South Africa’s first-ever liquid helium processing technology. 

On the Toronto Stock Exchange, smaller players such as Royal Helium Ltd. (RHC:TSX.V) and Desert Mountain Energy Corp. (TSX-V: DME, OTCQX: DMEHF) are positioning themselves in this burgeoning market, as well. 

RHC, a small-cap helium pure play, has strategically positioned itself to take advantage of Saskatchewan’s thick shale cap that traps the helium gas beneath it. Desert Mountain, a Vancouver-based resource company actively engaged in the exploration and development of Helium and Oil & Gas properties in the U.S. Southwest, has been exploring for helium in the prolific Holbrook Basin project in eastern Arizona, the so-called “the Saudi Arabia of helium’’ and one of the world’s richest helium fields. The company announced the discovery of high-grade helium deposits in its new exploratory wells in Arizona in September last year.

The post The Helium Boom Is About to Take Off in 2021 appeared first on Global Investment Daily.

Since the dawn of civilization, humanity has grappled with the ephemeral nature of life and harsh finality of death. For many millennia, human societies have scoured high and low for the elusive fountain of youth, trying everything from offering sacrifices to appease the gods and uttering magic incantations to invoking alchemy and imbibing on a cornucopia of potions, elixirs and concoctions, some so potent that they were more likely to hasten what they were supposed to prevent.

But if you thought of these sometimes bizarre practices as anachronistic and belonging to a bygone era, think again: In this age of AI, machine learning and IoT, the quest for immortality is going strong as ever.

Whereas a past study has revealed that only a fifth of Americans are thrilled by the idea of living forever, more than 40% say they certainly would want to live a longer-than-normal lifespan.

Part of that is tied to ethics and morality issues.

But whereas some extreme biohacks such as cryogenics remain controversial and exist in a legal gray area, others revolving around genetics, epigenetics and cell reprogramming are well accepted and backed by solid medical practices.

In fact, there’s growing evidence that people with better access to more conventional medical technologies such as organ transplants are already outliving their less fortunate brethren by a significant margin.

The biohacking sector is thriving thanks to ample support from Silicon Valley moguls including Amazon Inc.’s (NASDAQ:AMZN) CEO Jeff Bezos, Oracle Inc.’s (NASDAQ:ORCL) Larry Ellison, Google Inc.’s (NASDAQ:GOOGL) co-founder Sergey Brin, and PayPal Inc. (NASDAQ:PYPL) co-founder Peter Thiel.

Global Biohacking Market

The science of cheating death is big business, with the global medtech industry including vitro diagnostics (IVD), cardiology, diagnostic imaging and orthopedics valued at $450B in 2019 and expanding at a robust clip. Indeed, IVD currently generates some $53 million globally but is forecast to reach $80B by 2024.

According to the report by Market Research Future, the Global Biohacking Market is expected to grow at a CAGR of 19.42% between 2017 and 2023 thanks to growing awareness about biohacking, extensive demand for smart devices and drugs and increasing prevalence of chronic diseases across the globe.

The majority of the players in this industry are under pressure to develop advanced healthcare interventions that are not only efficient but can also justify the high cost that patients are often willing to pay for these procedures. Although innovation and technology are creating new opportunities for providing efficient treatment, they are also intensifying competition from non-traditional entrants. Indeed, the biohacking sector has become a new battleground as players both big and small compete for venture capital. Thankfully, the entire sector appears ripe for disruption with rapid advancements in technology forcing many older companies to shift from their core competencies and investing heavily in talent, R&D and partnerships to remain competitive.

The big players

Silicon Valley billionaires such as Sergey Brin, Larry Ellison and Peter Thiel have radically changed the world through their Big Tech innovations, however, they have now trained their sights on fighting death itself. 

These ultra-wealthy investors are using their financial and technological might to back startups that focus on achieving immortality and outsmarting death.

Here are some of the leading players in the field.

#1. Calico

Calico, the abbreviation for California Life Company, is a venture company founded by Bill Marisa, former CEO of Google Ventures and is aimed at specifically researching age-related problems.

The Venture began in 2013 with private funds to the tune of $1.5 billion raised from Google and its former partner Abbvie. Calico has previously been heavily criticized for its secrecy.

#2. Methuselah Foundation

The advocates  of immortality are at present divided into two camps:

• Tissue thinkers— these are people who believe that by using technological interventions we can modulate our body tissues and cells and live for a few hundred years or even forever.

• Extending health span–the second camp is maybe a little less sanguine than the former, and is mainly focused on extending health and human lifespans in order to compress morbidity. 

The Methuselah Foundation is considered the unofficial leader of tissue thinkers. Aubrey de Grey, a leading bio-gerontologist with a background in AI and high-end computer science, co-founded Methuselah, a non-profit medical charity aiming at fighting aging through modifications in tissues and DNA in order to increase human life spans, in 2003. The foundation has received $3.5 million from former PayPal CEO, Peter Thiel. 

#3. SENS Research Foundation

In 2009, Aubrey’s foundation branched out to SENS Research Foundation, a research foundation which works on specific projects to fight aging. SENS has received $2.4 million dollars in donations from the founder of blockchain platform ethereum, Vitalik Buterin.

SENS is currently developing several novel therapies that cure and prevent the diseases and disabilities of aging.

#4. Cryonics Institute

Cryonics is one of the technologies aimed to fight mortality that involves freezing dead bodies with a view to reviving them at a later date.

Cryonics is based on the premise that if someone has died today because of an incurable disease, he or she could be frozen until we discover a cure for the disease at which point the person can be revived.

Cryonics Institute and Alcor Life Extension Foundation are world leaders in and provide cryonics services to optimists who want to preserve their bodies to be revived when conditions are right. Currently, 157 individuals have been preserved cryogenically with several thousands more on the waiting list.

#5. Mindstrong Health

Mindstrong Health is a Californian company that aims to transform mental health. The company has created an app that can detect mood and even diagnose depression. The app has been attracting considerable interest, helping the company secure $31 million investment at the start of the year.

Other honorable mentions in the biohack and wellness space include:

• Oura
• Immortalis
• Chronomics

The post The Global Biohacking Sector Is Booming appeared first on Global Investment Daily.

The rally is proving to be a speculator’s dream, with bitcoin now boasting a 334% gain over the past 52 weeks. 

Even better for the bulls is that this megarally appears to have  real legs unlike the 2017 rally that ended in disaster after the crypto market crashed spectacularly.

The best part, however, is that the financial regulatory authorities and Wall Street finally appear to be fully embracing cryptocurrencies, with Coinbase set to go public in the current year while the Fed has just approved the first digital bank ever.

Hot on the heels of the Coinbase IPO is Bakkt, another crypto exchange which recently announced plans to go public via a SPAC merger.

And, suddenly, Guggenheim Global’s CIO, Scott Minerd’s $400K price target for bitcoin does not appear too far-fetched.

Source: Coindesk

Coinbase IPO

A month ago, Coinbase, the biggest and best-known U.S. cryptocurrency exchange, filed its S-1 with the SEC to go public. Coinbase’s timing looks impeccable after the mammoth crypto rally that has seen the crypto market surpass a market capitalization of $1 trillion for the first time ever.

But that’s just one of several factors working in Coinbase’s favor. Other unicorn listings that took place last year including Airbnb Inc. (NASDAQ:ABNB), the popular online home rental marketplace, and DoorDash Inc. (NYSE:DASH), an On-Demand logistics based startup, have been home runs with ABNB stock up nearly 150% and DASH having gained 83% since their respective IPOs. 

Airbnb is currently valued at $107B, significantly higher than the valuation of older peers such as Booking Holdings (NASDAQ:BKNG) and Expedia Group (NASDAQ:EXPE) with market caps of $86.8B and 19.9B, respectively.

The giant exchange has 35 million customers, and was valued at $8 billion when it last reported in 2018. 

Being the first crypto exchange to go public, it’s hard to project how the market will value the company. 

However, here’s an encouraging sign for the bulls: Coinbase pre-IPO shares trading on crypto exchange FTX have lately soared. Further, Coinbase has been consistently profitable for years, something few unicorns including Airbnb and DorDash can lay claim to.

That said, Coinbase still has to clear several hurdles before it can finally join the thousands of other companies in the public arena.

Controversy

Coinbase is not a stranger to controversy and heavy scrutiny by regulatory bodies.

Indeed, Coinbase has had to deal with regulator scrutiny over the years, including having to  submit information on 13,000 customers accounts to the IRS in 2018 who held more than $20,000 in cryptocurrencies between 2013 and 2015.

Further, Coinbase has had to deal with its fair share of disgruntled customers, with Mashable in 2018 uncovering more than 115 customer complaints over issues ranging from site outages and missing funds to lack of customer service.

Coinbase has frequently suffered website outages at critical times including during periods of heavy trading with the outages becoming a reputation hazard for the exchange. Further, Coinbase’s recent decision to halt trading in XRP on Jan. 19 due to the latter’s spat with the SEC has rubbed dozens of customers the wrong which would lead to drawn out court cases.

Given its checkered track record, not least because it’s a big and highly prominent cryptocurrency company, Coinbase might find itself encumbered with regulatory red tape that could lead to many months elapsing before the SEC finally gives the nod for the much-awaited listing.

But crypto bulls have been waiting for this moment for years, and waiting for several more months or maybe even a year cannot hurt too much. In fact, some crypto insiders have welcomed the imminent regulation, seeing it as another step in the crypto legitimization drive which is likely to attract more institutional capital to the industry.

As Flori Marquez, founder of crypto lender BlockFi, has aptly put it:

“There’s been an increased focus on regulators, in terms of looking at this asset class. To know that you have a crypto company in front of the SEC, having active conversations in terms of thinking, How do we make it easier for U.S. consumers to invest in this asset class, is just huge news for the space as a whole… I think it bodes extremely well for future development within bitcoin and what companies can do in the space going forward.”

Bitcoin is emerging as the biggest winner in the latest shift, with big investors now dumping the yellow metal for digital gold citing frustration with traditional financial institutions coupled with a growing lack of engagement.

Perhaps it’s not by coincidence that Bitcoin has shot to record highs at a time when institutional dollars have been fleeing gold.

At a time when bitcoin and cryptocurrencies have been flying, gold has been steadily losing momentum after hitting its historical high of $2,075 per ounce in August.

The Grayscale Bitcoin Trust (GBTC) has recorded inflows of almost $5 billion since October, compared with outflows of $7 billion for gold ETFs, according to JPMorgan. GBTC now boasts $1.27B in assets under management (AUM).

As former commodities hedge fund manager Jean-Marc Bonnefous has noted, gold was the leading safe haven of the past world and baby boomer generation but is now being replaced by automated assets like Bitcoin. A recent global survey by deVere, one of the world’s largest independent financial advisory and fintech organisations, has revealed that millennials, too, prefer bitcoin to gold as a safe-haven asset.

Indeed, Scott Minerd says he arrived at the $400,000 target for bitcoin based off his analysis of gold, and that crypto is now more desirable than the yellow metal. In other words, bitcoin could see gains of 1,000% from here as it continues to replace gold as the preferred safe haven.

Nevertheless, Minerd himself says the crypto’s latest parabolic run has been driven by a speculative frenzy that could result in near-term weakness. Minerd has advised investors to take some profits at this point.

The post Why Bitcoin Could Be Headed to $400,000 appeared first on Global Investment Daily.

Gaming stocks have dramatically outperformed the broader market and even investor favorites such as the tech sector.

The gaming sector’s biggest fund and favorite benchmark, the VanEck Vectors Video Gaming and eSports ETF (NASDAQ:ESPO), has returned 77.9% in the year-to-date, dwarfing returns by the S&P 500 Index (SPX) and the Technology Select Sector SPDR Fund (XLK) with 14.3% and 37.9%, respectively.

Source: CNN Money

A Comet Moment?

The November release of new state-of-the-art videogame consoles by Sony Corp. (NYSE:SNE) and Microsoft Inc. (NASDAQ:MSFT) marked the dawn of a new era. With gamers both young and old holed up in their homes with little else to do, eSport and video game spending has skyrocketed–and is increasingly looking to become a multi-year trend.

Microsoft launched its next-generation consoles, the $499 Xbox Series X along with the smaller, discless $299 Series S and also introduced a new launch stream with extended gameplay sessions. A cross-section of experts expect that demand could outstrip supply for months, though many Covid-19-related supply chain issues in Chinese factories have resolved somewhat.

Meanwhile, Sony launched the PlayStation 5 in what has been labeled a high-stakes debut for the company just two days after Microsoft debuted the new Xbox devices. Whereas Xbox will be riding some powerful specs and a popular game-subscription service, Sony launched with high-profile exclusive games such as Spider-Man: Miles Morales.

The video game industry has notched record spending and profits in the year-to-date, with the latest report by the NPD Group revealing that video game sales through 10 months clocked in at $37.5B, a 20% Y/Y improvement. But even more impressive was the fact that hardware spending, usually pressured by impending release of new consoles, ratcheted up 23% year-to-date from the same period last year to $2.5B.

This has become a global trend, too: According to Newzoo, Gamers worldwide are expected to spend a record $175 billion on gaming software alone in the current, nearly 20% up from last year’s figure of $146 billion.

The pandemic has also been proving to be a major boon for eSports. With traditional sports events cancelled in the majority of countries, eSports has managed to pick up tens of millions of new viewers.

For instance, the eNASCAR Series–the digital version of the most-watched competitive sports event on cable TV this year–now draws over 1.3 million viewers. Popular eSports events for games such as Counter-Strike: Global Offensive (CS:GO) now command total unique views in the tens of millions.

And now, the million dollar question: Does eSports have true staying power or is the sector’s recent outperformance a mere flash in the pan?

Turns out expectations are currently mixed.

The big debate that videogame investors have been having is whether the gains will stick or simply go away with the end of the pandemic. Skeptics are arguing that gamers will put down their devices soon as they are able to start attending movies, sports and concerts again. Indeed,  Xbox Chief Marketing Officer Jerret West has labeled this a “comet moment” in the gaming sector that comes every six to seven years where people “reinvest into the ecosystem.” Meanwhile, a NYU professor has told the NYT that the lack of mergers and acquisitions during a time when the industry is enjoying incredible momentum suggests that industry experts are not 100% confident that the good times will last.

Still, there’s reason to be optimistic. Shares of game publishers have quickly bounced back after selling off following the announcement of a flurry of potential Covid-19 vaccines by Pfizer-BioNTech, Moderna, and Astrazeneca among other pharmaceutical and biotech companies. Shares of game publishers have a tendency to go down after positive reports.

The outlook for the eSports sector is equally bright.

Whereas many viewers may abandon eSports once their favorite sports resume on TV, research outfit Technavio has noted that many new fans are likely to stick around even after the pandemic is long gone simply because eSports can be so much fun and packs a punch of sticking power.

Further, the research firm pointed out that even less popular eSports such as ePremier League Invitational, which only attracts ~52,000 viewers, don’t need to beat the numbers by their more illustrious peers in order to be worthwhile for both organizers or the players. That’s because they provide opportunities for players and teams to reach out to a new cadre of fans and potentially attract new viewers in a way physical games cannot do, while also fulfilling obligations to sponsors by offering alternative content.

Another big reason why eSports appeal to both publishers and fans–and are therefore likely to outlast Covid-19–is their sheer versatility compared to conventional sports. 

The post Gaming Stocks: The Multi-Billion Covid-Proof Megatrend appeared first on Global Investment Daily.

During ceremonial rituals, they used a special compound they called “the flesh of the gods”…

And today, researchers are discovering that this same compound could transform how we approach mental health moving forward…

Sparking an explosion of interest in what some experts project could be a $6.9 billion market by 2027.

It’s already being studied in some of the top medical facilities in the United States, including Johns Hopkins University…

Where it was found that this chemical was up to 4x more effective in treating depression than typical antidepressants.

Source: BeckleyFoundation.org

Now, the media is taking the story mainstream as it continues to gain steam by the day.

CNN reported “One use of [this compound] reduces anxiety and depression in cancer patients.”

Fortune Magazine reported “Psychedelic drugs may revolutionize mental health care.”

And CNBC is reporting “Oregon becomes first state to legalize [the special compound] as more states ease drug laws in ‘psychedelic renaissance’.”

This could become one of the greatest transformations in mental health care we’ve seen in decades, with the potential to treat chronic conditions much faster than typical treatments.

And one company plowing ahead at the forefront of this breakthrough is Lobe Sciences Ltd. (CSE:LOBE; OTC:GTSIF).

Earlier this year, they acquired Eleusian Biosciences Corp., another growing biotech company with several provisional patents to their name.

Between the treatments they’ve identified and devices they’re in the process of developing, they have the potential to own a significant share of this booming market.

And at a market cap of just C$12.5 million, this could be a major boom for early investors as news continues to break in this fascinating field.

Here are 5 reasons why you should be paying attention to Lobe Sciences (CSE:LOBE; OTC:GTSIF).

#1 – The Massive Mental Health Market

In 2019, it was estimated that 1 in every 5 Americans lives with a mental illness, according to the National Institute of Mental Health.

And that was before the stress and uncertainty of living through a global pandemic

That’s why the market for treating mental health and neurodegenerative disorders is projected to reach a whopping $240 billion by 2026.

But the transformative medicine movement could be poised to grab a huge share of that market based on early results.

These chemical compounds work in a completely different way than standard medications used today.

While most treatment approaches for mental health tend to focus on treating the symptoms, these compounds take a different approach.

They work by addressing the root cause of the issue by giving you a transformational experience that can help “reset” the brain.

Interrupting the thought patterns and habit loops in the brain that can get people stuck for months or years in many cases.

A study from Johns Hopkins showed that when treating terminal cancer patients with psychedelics to reduce anxiety and depression…

They showed an incredible 80% success rate upon administering large doses of Psylocibin.

The number of treatments in psychiatry that can boast that kind of success rate is almost non-existent.

Which is why psilocybin and other special compounds like it are now being studied to treat everything from depression and anxiety to addictions and trauma, and much, much more.

And the FDA has even granted “Breakthrough Therapy” status to various psychedelic clinical trials looking to address treatment-resistant depression.

But successfully treating trauma has been a longstanding issue in psychiatry.

Each year, an estimated 8 million Americans suffer from PTSD. That’s more than the population of the entire state of Washington.

And with about 1 in every 13 people experiencing post-traumatic stress disorder (PTSD) at some point throughout their lifetime, this is a major priority in the mental health field.

But at this point, there are very few treatments in psychiatry that have been proven to help treat PTSD and relieve people of past trauma.

Plus, there’s another issue that often goes hand-in-hand with trauma that has gained mainstream attention.

Each year, millions of people sustain concussions, mild brain injuries that can be caused by anything from falls to car accidents to sports-related injuries.

But the current protocol given by the CDC tends to be little more than providing some education and telling folks to stay home, rest, and drink water.

Clearly this all leads to a massive market opportunity, with the alternatives on the market leaving many people continuing to struggle.

But Lobe Sciences (CSE:LOBE; OTC:GTSIF) has already assembled concrete ingredients to address the trauma and concussion issues head on.

And as they look to play a major role in treating these issues with their solutions, they could stand to grab a huge part of this multi-billion dollar market.

#2 – Building A Giant Moat in This Booming Industry

As this industry continues to grow, Lobe is planting its flag and staking its corner of the market.

With its recent acquisition of the biotech company Eleusian Biosciences in July, Lobe now has 5 provisional patents to its name and counting.

3 of these provisional patents are for the chemical compounds themselves, and the other 2 are for their innovative devices.

The treatments are each focused around pairing these revolutionary substances with an over-the-counter drug…

Addressing both the head trauma and emotional trauma when experiencing concussions.

This could be incredibly promising news for the millions of people who experience a concussion each year – whether that was due to a fall, accident, military service, or any other head injury.

In short, the over-the-counter drug N-acetylcysteine (NAC) has already been shown to be effective in treating the head injury portion, according to studies published by the National Institute of Health (NIH).

And these special compounds would work in combination with NAC, potentially preventing patients from experiencing the emotional trauma that often comes after the injury.

The devices Lobe is in the process of developing show incredible promise as well.

The first would spray a specific dose of the compound through the nasal cavity using extremely small droplets.

And the second is a virtual reality mask that could be used while receiving the treatment nasally.

With these breakthrough technologies, it would be possible to perform therapy using virtual reality while you receive the compound through the nasal spray.

This would be an opportunity unlike any on the market to help shift how patients experience past trauma.

Many other companies in the industry seem to be stretching themselves thin, trying to be everything to everyone…

Buying up treatment centers… developing the treatments… running clinical trials… and much more.

But Lobe plans to become the go-to name in a more focused area, by delivering top-notch treatments along with the innovative devices to deliver them.

And it becomes even more exciting when you see the caliber of the team and relationships they’ve built already.

#3 – World-Class Team and Connections

Lobe is pushing forward quickly to move its patented therapies through the 5 stages of research and development.

And much of it is happening in partnership with a renowned institution in the University of Miami.

Lobe (CSE:LOBE; OTC:GTSIF) is already extremely undervalued in comparison to many of its competitors…

But when you consider that very few of these competitors have relationships with universities like Lobe does, it’s plain to see why Lobe is the biotech company to watch in the weeks and months ahead.

At the moment, Lobe has already started pre-clinical studies at the University of Miami for its treatment of concussions and PTSD with psilocybin and NAC .

But it’s not just the relationships outside of the organization that give this opportunity so much promise.

The team that Lobe has built includes some world-class talent, showing they’re serious about moving their plans forward with the best at the helm.

Their CEO, Tom Baird, for example, has led engineering design, strategy, and product management for several companies over his career.

That includes his background working for TRW Inc., now Northrop Grumman, a $52 billion company.

This experience in engineering and product management will be invaluable in bringing not only Lobe’s treatments to market successfully, but its devices as well.

They’ve also picked up a valuable asset in Maghsoud Dariani, their new Chief Science Officer.

Dariani is the best of both worlds, with both the science smarts and the business savvy…

Making for a perfect combination for creating a quality product then developing a strategy to grow the business behind it.

He’s also currently the CEO of Semorex, a private company developing therapeutics for cancer.

And in his past roles as president and vice president of other impressive biotechs, he’s built an incredible list of achievements.

That includes bringing multiple drugs to FDA approval, helping another treatment reach the clinical evaluation stage, and assisting in negotiating the sale of one of these companies.

This includes Focalin and Focalin XR, a derivative of the popular ADHD medication Ritalin, which continues to be widely prescribed years later.

With his experience both bringing treatments to FDA approval and negotiating high-level business deals, this makes the potential of Lobe look even more promising.

But there’s another ace in the hole that could prove to be a major catalyst for shares to jump in the near future…

#4 – The “Triple Play” Asset Potentially Worth Tens of Millions

On top of the promising treatment developments and the plans for their proprietary delivery devices…

Lobe (CSE:LOBE; OTC:GTSIF) also acquired the exclusive rights to purchase a Washington-based recreational cannabis firm, Cowlitz County Cannabis Cultivation, several years ago, for just US$50,000.

As one of the first states to legalize recreational marijuana, Washington has among the strongest sales of any state in America.

Sales were projected to reach an eye-popping $2.1 billion in 2020…

But they’ve actually exceeded expectations since that projection, with sales increasing during the pandemic.

And Cowlitz has become a prominent player in the massive Washington market over the last several years.

Based on filings with the state, they’re currently on pace to reach $20 million in revenue this year.

Revenue has continued to grow over the past several years, all while many industries have been crumbling around them recently.

And now, Lobe could exercise this option to acquire an asset producing  $20 million in annual sales for just a modest $50,000 USD.

This unique situation could help Lobe be a winner in almost any scenario imaginable.

But three scenarios seem most likely at this point.

First, a landmark legal case is underway that may loosen Washington’s stringent rules on foreign cannabis ownership.

A change in state and federal regulations could allow Lobe to exercise their option and buy the multi-million dollar cannabis company outright.

Because this valuable asset isn’t shown on their balance sheet right now, that would mean an immediate boost to Lobe’s numbers, which could send shares soaring.

Second, they could choose to sell their option to another Washington State Operator.

And with Cowlitz’s growth rate over the last few years, it’s not hard to imagine how this could bring an offer with a serious price tag.

Generally, these kinds of assets can sell for 1x their revenue at the minimum, with many deals bringing back 3x valuations or more.

For Lobe, that means they could potentially bring in an additional $20 million or more with very little work.

Again, if this brought in a major flood of cash in the event of a sale, it could mean a jump in Lobe’s share prices once a deal is completed.

It could also deliver more shares for early investors, all without diluting the ones they’re already holding, which is a great situation for both the company and shareholders.

Finally, they could remain a winner with this option by doing nothing at all.

As it stands, Lobe receives monthly revenue through Cowlitz’s brand licensing and leasing to the firm.

In fact, that monthly revenue is enough to cover most of Lobe’s general and administrative costs at this point, making it even more profitable as a result.

So even if Lobe doesn’t exercise or sell the option, it will continue to receive a revenue boost each and every month, which has helped it remain funded with additional cash flow.

The Bottom Line

• Psychedelics are showing results 4X better than current treatments.
• Promising results have already been shown for certain psychedelic compounds in treating depression, anxiety, trauma, and substance use issues, with many other conditions being studied.
• Lobe Sciences (CSE:LOBE; OTC:GTSIF) has already assembled pieces and begun pre-clinical studies ahead of this growing wave.
• With 5 patents pending, Lobe is planting their flag and setting themselves up to own a significant corner of this growing industry.
• They’ve established an important relationship with the University of Miami, which will help test and validate their treatments and devices.
• Plus, they own a valuable asset in a booming recreational cannabis company, which could potentially be sold for a large sum or kept for the consistent monthly revenue boost it provides now.

Here are a few more companies to watch out for during the biotech boom:

Compass Pathways (NASDAQ:CMPS)

Compass Pathways is a major player in the transformative medicine space, with backing from big names like billionaire Peter Thiel.

They were recently granted FDA Breakthrough Therapy designation for their psilocybin treatment for treatment-resistant depression, which is an amazing accomplishment that helps validate others in the industry as well.

With over 100 million people suffering from depression with 2 or more failed treatments, their treatments could deliver hope to those feeling like they’ve run out of options.

Field Trip Health (CSE:FTRP)

Field Trip Health, based out of Toronto, takes a three-pronged approach in their work in transformative medicine.

Not only are they involved in drug development, but they’re also involved in manufacturing and run a number of treatment clinics.

With clinics currently operating in Toronto, Los Angeles, and New York, they have plans to ramp up to 75 clinics – providing psychotherapy along with psychedelic treatments.

Mind Medicine (MindMed) Inc. (NEO: MMED) (OTCMKTS:MMEDF)

MindMed is not just another competitor in this growing industry – they were the first publicly traded company in it.

But their pipeline spans several other conditions affecting millions, including anxiety, chemical dependence, and adult ADHD.

They currently have multiple trials in Phase II, and they’re moving quickly, which could help explain why shares have more than tripled over the last 2 months.

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The post The Ancient Medicine that Could Help Transform the Biotech Sector appeared first on Global Investment Daily.

The carnage has continued in the current year, with the coronavirus outbreak triggering unprecedented inventory and liquidity headwinds forcing even more stores to shut down.

The year kicked off with the parent of fine paper specialist Papyrus quietly going into liquidation before eventually filing for bankruptcy. A torrent was to soon follow, with 27 major retailers joining the expanding retail graveyard in the year-to-date. These include industry bellwethers such as giant department store chain JCPenney (NYSE:JCP), luxury department store operator Neiman Marcus and famous New York discount store chain, Century 21.

And now yet another potent force has emerged to put even more pressure on the battered sector: Direct-to-consumer (DTC) brand movement.

At a time when brick-and-mortar are struggling mightily with sharp declines in foot traffic, sales and profits, the DTC space has continued to flourish and even record double-digit growth amid the pandemic.

Not surprisingly, DTC stocks have been shooting the lights out, with Overstock.com Inc. (NASDAQ:OSTK) managing to reverse years of losses to power up 874% YTD; Wayfair Inc. (NYSE:W) is up 229% while Shopify Inc. (NYSE:SHOP) has gained 161% over the timeframe.

Interestingly, no mainstream online company has folded.

Source: CNN Money

The retail apocalypse 

It’s not by accident that the ever-growing wave of retail store closures has coincided with the ecommerce explosion.

Over the past decade, North American and global consumers have shifted their purchasing habits quite dramatically thanks to the meteoric rise of digital shopping. 

Online sales have been growing much faster than brick-and-mortar sales, climbing nearly 400% to $6.5 trillion in the 2014-2020 period.

According to eMarketer, ecommerce sales as a share of retail have climbed from 10.4% in 2017 to 16.1% in 2020. That trend is expected to hold over the next decade with digital sales projected to grow to 22% of total retail sales by 2023.

Source: Statista

Source: eMarketer

In contrast, retail sales growth has gone through a slump, falling from 6.2% in 2017 to 4.1% in the current year, with the lackluster growth expected to continue over the coming years.

Source: eMarketer

A big reason for the ecommerce megatrend going on a tear can be chalked up to convenience.

Online shopping allows the customer to:

• Shop 24/7
• Avoid crowds and save time
• Easily compare prices between different sellers
• Enjoy better prices compared to brick-and-mortar stores
• Enjoy expedited delivery with many companies offering same-day deliveries
• Enjoy better variety

Source: Smart Insights

A forensic analysis of this year’s high-profile retail closures proves that brick-and-mortar stores are likely to continue taking a backseat to their digital brethren.

Take Century 21, for instance. For more than six decades, the company has been a favorite retailer especially among New Yorkers, managing to survive even after its downtown flagship was destroyed in the 9/11 terrorist attacks.

Century 21 was an early entrant in the off-price game, focussing on selling high-end apparel for savvy fashionistas. But unlike peers TJX Companies Inc.(NYSE:TJX)., Ross Stores (NASDAQ:ROST) and Burlington Stores (NYSE:BURL) which have eschewed ecommerce in favor of their defining store-based treasure hunts and also partly in a bid to protect their margins, Century 21 opened a website to help it expand beyond the four states where it operates.

Unfortunately, the company has been forced to close down after insurance companies denied it $175 million in Covid-19-related claims.

Talk about doomed if you do, doomed if you don’t. In this case, merely having an online presence has not been enough to save Century 21–and dozens others like it.

J.C. Penney’s problems go back years ago when the company went on a death spiral of falling store traffic, mounting losses and constant sales declines. But years of trying to engineer a lasting turnaround failed to bear fruit, which– coupled with a deadly pandemic–forced the 118-year old retailer to throw in the towel and file for Chapter 11 bankruptcy.

JCP failed to reinvent itself and change with the times, with its stores and merchandise roundly viewed as bland and unexciting. Even more perplexing is that the company failed to build on its early lead as one of retail’s online shopping pioneers. JCP was once regarded as an online stalwart, with digital sales exceeding $1 billion by 2006. But ultimately its brick-and-mortar stores proved too much of a drag, and now the company plans to shutter 242 of its 846 nationwide stores by the end of 2021.

Neiman Marcus has been forced to pay the price after falling into an all-too common business trap–taking on too much debt. Two rounds of private equity buyouts left it saddled with a mountain of debt making it really difficult for the retailer to keep up with rivals Nordstrom Inc. (NYSE:JWN) and even Macy’s (NYSE:M). This has been further exacerbated by the fact that the department store sector has been in the dog house for years now.

Nevertheless, the century-old Dallas-based retailer remains in a much better position than other fallen icons since it has managed to maintain fierce loyalty among some deep-pocketed customers. Further, a virtual styling service has helped boost online sales with digital sales making up 30% of total sales. The company’s Mytheresa business has survived and will continue to operate independently.

The rise of DTC

Consumers are constantly in search of convenience, and the direct-to-consumer (D2C) model offers them precisely that.

A new generation of disruptive brands have been shaking up retail, with direct-to-consumer e-commerce companies building, marketing, selling, and shipping their products themselves without any middlemen.

Direct-to-consumer (or D2C) businesses manufacture and ship their own products directly to customers without going through traditional stores or other middlemen.This allows DTC companies to offer products at lower costs than traditional consumer brands, while at the same time maintaining end-to-end control over the making, marketing, and distribution of their products. D2C brands are able to experiment with different distribution models, from direct shipping to consumers and partnering with physical retailers to opening pop-up shops. In other words, they are not limited to traditional retail stores for exposure.

These trends have been helping D2C to expand at an even faster clip than traditional ecommerce, with eMarketer forecasting that D2C sales will hit $17.75 billion in 2020, good for 24.3% Y/Y growth.

D2C has taken over many corners of traditional retail, with once tiny startups now dominating.

Casper Sleep Inc. (NYSE:CSPR), which IPOed in February, is taking on the mattress industry; Harry’s and Dollar Shave Club are taking on the razor industry; The Honest Company is upending the baby products and cleaning segment while others like Soylent are building entirely new product categories. Amazon features prominently in the (partial) distribution of these products though most have managed to carve out niches away from Amazon’s dominant marketplace.

The big boys are not to be outdone though.

Overstock, the online purveyor of home decor, furniture, home improvement, and other related products, has enjoyed a monster rally thanks to its latest push to apply the DTC model to its online home furniture business. A key trend driving Overstock’s furniture business higher is a boom in home renovations as the pandemic forces more people to work from their homes. During its latest earnings call, Overstock reported Q3 revenue of $731.65M (+110.8% Y/Y); adjusted EBITDA of $40M and Q3 GAAP EPS of $0.50 thanks to new customers more than doubling. The company says its pure play e-commerce and partner supplier dropship model are a great fit for its business and support high growth.

Shopify has been recording similar bullish trends, with the company’s GMV (Gross Merchandise Volume) rising 109% in Q3 to $30.9B thanks mainly to robust merchant revenue growth of 132% to $522.1M. Overall revenue of $767.4M (+96.5% Y/Y) and GAAP EPS of $1.54 were equally impressive. And just like Overstock, Shopify’s management has revealed that it has been recording ‘‘incredible demand’’ thanks to a ‘‘decisive shift to digital commerce.’’ 

DTC headwinds

Despite the incredible opportunities that D2C has been opening up for ecommerce players, the burgeoning industry is facing its fair share of challenges.

As eMarketer has noted, the same low barriers to entry that have enabled many retailers to join the fray have, unfortunately, also led to overcrowding and increased customer acquisition costs. Indeed, the analyst expects D2C buyer growth rates to slow down to single digits from 2021 after enjoying 24% growth just three years ago.

Source: eMarketer

On the opposite end of the spectrum, stronger-than-expected demand could easily overwhelm even seasoned players and potentially lead to brand damage. Good case in point is Shopify which has reportedly been struggling to keep up with a rapid increase in merchant accounts on its platform.

Despite these growing pains, Wall Street remains bullish on the D2C sector, with eMarketer projecting 87.3 million D2C eCommerce shoppers aged 14 and older in the current year in the United States alone, up 10.3% from the prior year.

The post Death of Retail and the Rise of DTC (Direct-to-Consumer) appeared first on Global Investment Daily.

More recently, though, millennials have busted this stereotype. 

Last year, they became the largest living adult generation in the U.S. after surpassing baby boomers and Generation X. But that’s only part of the shift that’s underway. Millennials not only make up the largest working cohort but are also big drivers of megatrends such as technology, social change, urbanization, climate change and emerging global wealth. 

Millennials are also proving to be savvy stockpickers, frequently managing to outperform more seasoned investors. Indeed, according to data published by Apex Clearing, the Top 10 millennial stock picks representing ~50% of their portfolios have comfortably outpaced the market with a weighted mean year-to-date return of 108.5% compared to a 5.8% return by the broad market benchmark, S&P 500.

Here are the top megatrends favored by millennial investors.

#1 Clean Energy/eMobility

The EV megatrend is widely regarded as one of the biggest and most powerful trends that will dominate the world for decades. In 2019, electric mobility reached a tipping point with more than two million EVs sold around the world, good for a record 2.5 percent of the global light-vehicle market.

The Covid-19 crisis has exacted a heavy toll on most sectors of the global economy; however, clean energy sectors including EVs have proved amazingly resilient. At a time when the global oil and gas industry is going through its worst existential crisis, renewable energy sectors such as solar and wind have continued to record significant growth and playing an ever-bigger role in our electricity generation mix. The EV sector has not been left behind with 2020 EV sales expected to broadly match the 2.1 million units sold in 2019, as per the International Energy Agency (IEA).

The long-term outlook remains bright, with catalysts such as falling battery and vehicle costs, more stringent fuel economy and emissions standards, shared mobility services and the irresistible ESG megatrend expected to continue driving adoption levels. Indeed, Bloomberg New Energy Finance (BNEF) has predicted that EV sales will account for 58% of new cars sold by 2040 compared to 2.7% in 2020.

Although ESG investing is a multigenerational trend, millennials are definitely playing their part with one study finding that millennial investors are nearly twice as likely to invest in companies or funds that target specific social or environmental outcomes. 

Tesla Inc. (NASDAQ:TSLA) has become the quintessential millennial stock, consistently ranking among the most popular stocks on zero-fees trading app, Robinhood. According to Apex  Clearing, TSLA was the third most popular stock among millennials accounting for a 9.5% slice of the portfolios. Other popular EV stocks by this demographic are Nio (NYSE:NIO) and Nikola (NASDAQ:NKLA).

#2 Sharing Economy

The millennial generation has been driving most of the growth in the sharing economy, consisting of peer-to-peer platforms that provide access to shared goods and services. That’s according to Forrester Research, which says baby boomers are more cautious about the sharing concept.

That’s the case because millennials tend to value experiences more than material goods, characterized by their fondness for using smartphones to share their adventures on social media platforms such as Facebook and Instagram. About 47% of millennials prefer to spend money on experiences than products, compared with 29% of baby boomers. 

This cultural shift has helped propel shared mobility into a multi billion-dollar industry. 

Shared mobility, including services such as taxis, car sharing and ride hailing account for an estimated 5% of current passenger vehicle miles; BloombergNEF sees that rising exponentially with shared mobility services projected to account for 19% of the total annual mileage completed by passenger vehicles in 2040.

The economics of EVs are considerably more favorable in a sharing economy, thanks to lower fuel and maintenance costs. EVs currently account for 1.8% of the shared mobility fleet, but could climb to 80% by 2040 as per Bloomberg.

The leading stock here is Uber (NYSE:UBER) though millennials who went against the grain and continued piling in shortly after its IPO got badly burned. The other is Lyft (NASDAQ:LYFT) though it’s much less popular with millennials and does not rank among their top 100 stocks.

#3 eCommerce

Millennials and their smartphones are inseparable, and one of the activities they love doing on their hand-held devices is online shopping. Indeed, Joan Driggs, vice president of content and thought leadership at IRI, has told eMarketer that millennials are omnichannel consumers in the truest sense of the term, equally at home shopping online as they are shopping in-store.

Millennials also constitute the most digital demographic among U.S. consumers, with nearly 86% frequently shopping online compared to 78% of Generation X and 61% of baby boomers.

There are no prizes for guessing which ecommerce site millennials frequent most: Amazon Inc. (NASDAQ:AMZN). Amazon not only serves as the starting point for many millennials when they search for products online but many tend to fully commit with 73% of millennials being Amazon Prime members.

Amazon is the second most-popular stock amongst millennials, accounting for 9.8% of their portfolio holdings.

That appears to be wise investing since digital-impacted sales have been forecast to continue growing and exceed $2.4 trillion by 2022, good for more than 58% of total retail sales.

Source: CBRE

#4 Mobile

Source: Pew Research

Millennials have frequently led older generations in their adoption and use of technology, and this certainly rings true when it comes to smartphone and mobile device use.

According to Pew Research, 93% of American millennials own a smartphone; 53% own a tablet computer and 86% use social media, essentially leading in two categories except tablet adoption where Generation X leads with a 55% ownership clip. 

Although there are signs that we might have reached peak smartphone, millennials have continued to put their money where their mouths and hearts are with Apple Inc. (NASDAQ: AAPL) consistently ranking as the most beloved stock by millennials with a 10.6% share of their portfolios.

#5 Video

Three years ago, Facebook Inc. (NASDAQ:FB) CEO Mark Zuckerberg declared:

“I see video as a mega trend, same order as mobile.” 

Turns out he was right on the money.

Consumer video has been exploding, with online video consumption skyrocketing. Netflix Inc. (NASDAQ:NFLX) continues being the big daddy of the space with 190M subscribers, making it one of the world’s largest entertainment services. Alphabet Inc.’s (NASDAQ:GOOG) YouTube is hardly a sluggard though, with revenue figures very much comparable to Netflix’s.

The global video streaming market was valued at USD 42.60 billion in 2019 and is projected to record a robust growth rate of 20.4% CAGR from 2020 to 2027 with innovations such as AI and blockchain technology expected to continue improving video quality and boosting market growth.

Not surprisingly, Netflix is the 8th most popular stock in millennial portfolios while Alphabet chips in at #14.

The post Top 5 Megatrends Among Millennial Investors appeared first on Global Investment Daily.

From just a handful of offerings a couple of decades ago, we’re now bombarded with a cornucopia of everything ETF: As of January 2020, the US ETF/ETP industry boasted 2,361 ETFs/ETPs, from 155 providers on 3 exchanges.

The ETF industry is now much bigger than the mutual fund industry thanks to investors increasingly shunning actively-managed funds and flocking to passive funds.

That’s the case because ETFs really take the benefits of mutual fund investing to the next level. They frequently offer lower operating costs than traditional open-end funds, more flexible trading, greater transparency, and even better tax efficiency for taxable accounts. Most financial experts agree that these advantages significantly outweigh ETF drawbacks such as higher trading costs as well as a steeper learning curve.

Yet, experts believe that this could merely be the beginning for the industry thanks mainly to a less arduous regulatory regime by the SEC including last year’s watering down of its exemptive relief rule.

Top performing ETFs

When looking at stock market sector returns over the past decade, one notable trend stands out: Technology was king. 

Another interesting trend: Just five tech companies namely Microsoft Inc. (NASDAQ:MSFT), Apple Inc.(NASDAQ:AAPL), Amazon Inc. (NASDAQ:AMZN), Alphabet Inc.(NASDAQ:GOOG) and Facebook Inc.(NASDAQ:FB) have been hogging the limelight (and investor dollars). The five have enjoyed phenomenal growth over the past decade so much so that they now represent nearly 20% of the S&P 500’s aggregate market capitalization.

Source: Fortune

Not surprisingly, tech-focused ETFs dominated the catalog of the best performers. The Top 25 ETFs were all able to provide annualized returns exceeding 15%, with the biggest semiconductor ETF, SOXX, taking pole position after returning more than 19% a year on average over the past decade. 

Here’s a rundown of the best performing ETFs from 2010-2019.

#1 iShares PHLX Semiconductor ETF

      AUM: $3.74B

      Expense Ratio: 0.46%

      10-Year Annualized Returns: 19.07%

      10-Year Total Returns: 547.85%

Source: CNN Money

The iShares PHLX Semiconductor ETF(SOXX) is an exchange traded fund launched by BlackRock, Inc. SOXX mainly tracks companies operating across the information technology (IT), semiconductors and semiconductor equipment sectors. The fund focuses on U.S. stocks, but also invests one-quarter of its assets in international firms, thus giving it relatively balanced exposure.

SOXX is the largest semiconductor ETF, with second-placed VanEck Vectors Semiconductor ETF (SMH), commanding $2.68B in AUM.

The fund’s top 5 holdings as of September 2020 are:

• Nvidia Corp.(NASDAQ:NVDA)–9.84%
• Qualcomm Inc.(NASDAQ:QCOM)–9.61%
• Texas Instruments (NASDAQ:TXN)–7.82%
• Broadcom Inc.(NASDAQ:AVGO)–7.78%
• Advanced Micro Devices (NASDAQ:AMD)–5.51%

SOXX was the best-performing ETF over the last decade, providing a juicy 19.07% annualized return. SOXX has also proven to be that rare all-weather ETF play, managing to post positive returns in all but one year since 2010, a trend that has carried on to the 2020s with a 16.84% YTD gain.

With SOXX’s top companies like Nvidia, Broadcom and AMD sitting squarely on megatrends such as 5G, AI and IoT, this fund could be set to continue to outperform for years to come.

#2 First Trust Dow Jones Internet Index Fund 

      AUM: $10.29B

      Expense Ratio: 0.52%

      10-Year Annualized Returns: 18.52%

      10-Year Total Returns: 512.69%

Source: CNN Money

The First Trust Dow Jones Internet Index Fund (FDN) is a composite of two sub-indices; the Dow Jones Internet Commerce Index and the Dow Jones Internet Services Index. FDN is designed to measure the performance of the largest and most actively traded stocks in the United States’ Internet industry. The fund invests in stocks of companies operating across the IT, internet, internet software, services and infrastructure sectors.

FDN’s top holdings are:

• Amazon Inc. (NASDAQ:AMZN)–10.54%
• Facebook Inc.(NASDAQ:FB)–7.55%
• Salesforce.com (NYSE:CRM)–5.80%
• Paypal Holdings (NASDAQ:PYPL)–5.26%
• Netflix Inc.(NASDAQ:NFLX)–5.06%

FDN is, by far, the largest internet ETF, with second-rated iShares Expanded Tech-Software Sector ETF (IGV), managing less than half its AUM at $4.88B. Nearly 70% of FDN’s holdings are tech stocks, with Amazon and Netflix accounting for the bulk of the ETF’s ~19% consumer cyclical exposure. 

Most of FDN’s constituents are growth or momentum stocks, led by the fabled FAANG group. The phenomenal decade-long run by FAANG has left FDN looking quite pricey with an average price-to-earnings ratio of 35.5, well above the median PE of 14.8 by the S&P 500. This implies that FDN might continue to beat the market in the coming years but by a smaller margin of outperformance especially with the ESG megatrend rapidly gaining the upper hand.

#3 Invesco NASDAQ Internet ETF 

      AUM: $824.02M

      Expense Ratio: 0.60%

      10-Year Annualized Returns: 18.45%

      10-Year Total Returns: 532.39%

Source: CNN Money

The Invesco NASDAQ Internet ETF (PNQI) is an index designed to track the performance of (before fees and expenses) of the NASDAQ Internet Index. These are mainly internet-related businesses that are listed on U.S. stock exchanges. These include companies that specialize in internet software, internet search engines, web hosting, internet retail commerce or website design.

PNQI’s top holdings are:

• Amazon Inc.–8.61%
• Alibaba Group (NYSE:BABA)–8.44%
• Adobe Inc.(NASDAQ:ADBE)–8.09%
• Facebook Inc.–7.94%
• Alphabet Inc.(NASDAQ:GOOG)–6.97%

Over the past two years, this Invesco ETF has been beating FDN while also being significantly less volatile. The same trend has continued in the current year with PNQI outperforming FDN by quite some margin. That’s the definition of superior risk-adjusted returns.

A big reason why this internet fund has been trouncing its much bigger peer is that it includes successful, foreign-based internet firms such as Alibaba and Shopify (NYSE: SHOP), a script that many US-focused internet ETFs are unable to follow due to index requirements.

Another of its top secrets–PNQI offers ample e-commerce exposure, a potent, secular megatrend that is likely to rule many more years–if not decades–to come.

#4 SPDR S&P Biotech ETF

      AUM: $5.32B

      Expense Ratio: 0.35%

      10-Year Annualized Returns: 18.40%

      10-Year Total Returns: 494.45%

Source: CNN Money

The SPDR S&P Biotech ETF (XBI) is one of a handful of biotech ETFs available in the market. XBI is designed to track the performance of the S&P Biotechnology Select Industry Index and provide exposure to pharmaceuticals, health care, biotechnology and life sciences sectors. Biotech is a corner of the market that’s capable of big jumps during events of major drug approvals and can also perform well during periods of consolidation.

XBI’s top holdings are:

• Novavax Inc. (NASDAQ:NVAX)–2.40%
• Invitae Corp. (NYSE:NVTA)–2.14%
• Aimmune Therapeutics Inc.(NASDAQ:AIMT)–1.78%
• Momenta Pharmaceuticals Inc.(NASDAQ:MNTA)–1.66%
• Emergent Bio Solutions Inc.(NYSE:EBS)–1.64%

XBI focuses primarily on mid-and-small-cap U.S. securities.This implies it might be too precise for investors seeking to construct a long-term portfolio. Nevertheless, the fund can be useful for investors who are bullish on the sector over the long run or for those seeking to fine tune exposure to the sector.

#5 Invesco Dynamics Semiconductor ETF

      AUM: $259.74M

      Expense Ratio: 0.57%

      10-Year Annualized Returns: 18.01%

      10-Year Total Returns: 526.84%

Source: CNN Money

The semiconductor industry has been red-hot over the past four years, and Invesco Dynamics Semiconductor ETF(PSI) is another sector ETF that has been flying. Just like SOXX, PSI invests primarily in companies that manufacture semiconductor chips that power our electronics including smartphones, computers, iPads, calculators, and much more. However, PSI differs from SOXX in one aspect: It only invests in U.S.-based chip companies thus giving investors pure domestic exposure to the U.S. chip industry. It’s top holdings, however, closely mirror SOXX’s but with different weightings.

Leading PSI stocks include:

• Advanced Micro Devices–7.32%
• Nvidia Corp.–6.57%
• Qualcomm Inc.–6.36%
• Texas Instruments–5.11%
• Broadcom Inc.–5.11

Another important difference: PSI mainly invests in medium-and small-cap stocks, meaning it provides stronger growth opportunities but can also be more volatile than a traditional large cap fund like SOXX.

The post Top-Performing ETFs From the Past Decade appeared first on Global Investment Daily.

You don’t have to be a trustworthy figure like Tom Selleck to advertise reverse mortgages, and this is only effective for a dwindling demographic that still watches local TV. 

It doesn’t take Jennifer Aniston to promote skincare products, either. 

The emerging future is that companies don’t have to hire celebrities at top dollar anymore to market their products. Random people who have become “influencers” simply by showing up on social media platforms such as TikTok, YouTube, Instagram and the likes are the new promoters. 

Super-Bowl commercials could bizarrely feature your neighbor, or even your grandmother if one of your children have the foresight to include her in a TikTok.  

These are the new celebrities that are democratizing stardom and they are wildly influential. 

Today, 72% of major brands are spending big on influencer marketing. Brands are set to spend up to $15 billion on influencer marketing by 2022, up from as much as $8 billion last year, and up from $500 million in 2015. The next 12 months will see a massive 40%+ increase in spending on influencers. 

Source: mediakix

Of the brands not currently deploying influencer marketing, 27% say they plan to do so over the next year.

Despite this explosive influencer growth trajectory, many companies are questioning whether paying money to influencers is really worth it because it’s difficult to verify how many people even see the ads or to track how it affects sales. They want clear numbers connected to clear campaigns and they won’t get it with social media influencers. 

But their hesitation over numbers will be their downfall. 

These are the only numbers they need:  

According to a recent poll, 86% of women seek purchasing advice from social channels. In total, nearly 50% of customers depend on the recommendations of influencers, while the vast majority of teenagers tend to trust more social media promotion than popular celebrities.

Brands typically pay influencers based on their reach, as measured by their number of followers.

In addition to celebrities with massive followings, brands are increasingly tapping other key influencer types, including micro- and nano-influencers, and gaming influencers…

Micro-influencers with followers in the thousands range can make thousands of dollars per post, while social media stars with followings of more than 1 million can make more than $100,000 for a single promotional post.

And with this much money involved, it’s an invitation to anyone in the ad-fraud business.

At least 15% of advertisers’ spending on influencer marketing is lost to fraud, costing them $1.3 billion annually, according to recent research from cybersecurity company Cheq. Influencer fraud, including purchasing fake followers and creating fake personas, is expected to cost businesses $1.5 billion next year.

Still, “Infuencerism” is getting so popular that one Italian online university is offering a “Social media influencer” degree. ECampus says three years of coursework, for roughly $13,000, are essential for success.

“The figure of the influencer is increasingly in demand by companies, commercial brands and advertising agencies because they can deliver messages to their followers who recognize them as credible and reliable opinion leaders,” reads a description of the degree.

While Instagram seems to lead the influencer marketing pack for now, it’s got a new contender that is incredibly fluid: TikTok. 

On TikTok, unbelievably random videos garner millions of views, and marketers are scrambling to understand the phenomenon and how they can harness this vast new power for their brands. 

Whether it’s simply a dog’s thoughts, a girl washing her face, a guy filming a banana or any manner of equally banal activity, the world is enthralled. 

And the favored platform for brand marketing doesn’t necessarily line up with the biggest platforms in terms of number of users: 

Source: Oberio

Influencer marketing may have been slowed in the early days of the pandemic when marketing budgets were cut over uncertainty, but it’s already bouncing back to pre-pandemic levels, and despite the fraud, few are willing to be left out of this game. 

Consumers who spent months under lockdown want engagement with individuals who are relatable. They want engagement with someone whom they could easily aspire to be. That’s not a celebrity. Furthermore, consumers have lost faith in the authorities and the traditional media, while the younger demographics were already living in a completely different social media world than everyone else.

Even the much-loved, adored and highly trusted Tom Selleck has now been accused by the public of selling the “snake oil” in his hawking of reverse mortgages to the elderly. 

Whether they deserve it or not, non-celebrity influencers are gaining the public’s trust, and the brands that fail to jump on this high-speed train are likely to find themselves left at the station. 

The post Social Media Influencers: Brand Marketing Goes Bananas appeared first on Global Investment Daily.