Best of the Week
Most Popular
1. TESLA! Cathy Wood ARK Funds Bubble BURSTS! - 12th May 21
2.Stock Market Entering Early Summer Correction Trend Forecast - 10th May 21
3.GOLD GDX, HUI Stocks - Will Paradise Turn into a Dystopia? - 11th May 21
4.Crypto Bubble Bursts! Nicehash Suspends Coinbase Withdrawals, Bitcoin, Ethereum Bear Market Begins - 16th May 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.Cathy Wood Ark Invest Funds Bubble BURSTS! ARKK, ARKG, Tesla Entering Severe Bear Market - 13th May 21
7.Stock Market - Should You Be In Cash Right Now? - 17th May 21
8.Gold to Benefit from Mounting US Debt Pile - 14th May 21
9.Coronavius Covid-19 in Italy in August 2019! - 13th May 21
10.How to Invest in HIGH RISK Tech Stocks for 2021 and Beyond - Part 2 of 2 - 18th May 21
Last 7 days
Junior Gold Miners: New Yearly Lows! Will We See a Further Drop? - 23rd Jul 21
Best Forex Strategy for Consistent Profits - 23rd Jul 21
Popular Forex Brokers That You Might Want to Check Out - 22nd Jul 21
Bitcoin Black Swan - Will Crypto Currencies Get Banned? - 22nd Jul 21
Bitcoin Price Enters Stage #4 Excess Phase Peak Breakdown – Where To Next? - 22nd Jul 21
Powell Gave Congress Dovish Signs. Will It Help Gold Price? - 22nd Jul 21
What’s Next For Gold Is Always About The US Dollar - 22nd Jul 21
URGENT! ALL Windows 10 Users Must Do this NOW! Windows Image Backup Before it is Too Late! - 22nd Jul 21
Bitcoin Price CRASH, How to SELL BTC at $40k! Real Analysis vs Shill Coin Pumper's and Clueless Newbs - 21st Jul 21
Emotional Stock Traders React To Recent Market Rotation – Are You Ready For What’s Next? - 21st Jul 21
Killing Driveway Weeds FAST with a Pressure Washer - 8 months Later - Did it work?- Block Paving Weeds - 21st Jul 21
Post-Covid Stimulus Payouts & The US Fed Push Global Investors Deeper Into US Value Bubble - 21st Jul 21
What is Social Trading - 21st Jul 21
Would Transparency Help Crypto? - 21st Jul 21
AI Predicts US Tech Stocks Price Valuations Three Years Ahead (ASVF) - 20th Jul 21
Gold Asks: Has Inflation Already Peaked? - 20th Jul 21
FREE PASS to Analysis and Trend forecasts of 50+ Global Markets by Elliott Wave International - 20th Jul 21
Nissan to Create 1000s of jobs with electric vehicle investment in UK - 20th Jul 21
Bitcoin Halvings Price Forecast and Stock to Flow Analysis - 18th Jul 21
Dell S3220DGF Unboxing and Stand Assembly - 32 Inch 165hz Curved Gaming Monitor Amazon Discount - 18th Jul 21
What Does The Fed Mean By “Transitory Inflation” And Why Is It Important To Understand? - 18th Jul 21
Will the US stock market’s worsening breadth matter? - 18th Jul 21
Bitcoin Halving's Price Projection Forecasts Trend Trajectory - 18th Jul 21
Dell S3220DGF Price CRASH to £305! 32 Inch 165hz Curved Gaming Monitor Amazon Bargain - 16th Jul 21
Google, Amazon and Netflix are Scrambling For This Rare Gas - 16th Jul 21
Sheffield Millhouses Park New Children's Play Area July 2021 Vs Old Play Area - Better or Worse? - 16th Jul 21
Inflation Soars, Powell Remains Unmoved. What about Gold? - 16th Jul 21
Goldrunner: Gold Could Jump To $1,900-$2,100 In Next 30 days – Here’s Why - 15th Jul 21
Tips For Finding The Right Influencers - 15th Jul 21
ECB Changed Monetary Strategy. Will It Alter Gold’s Course? - 15th Jul 21
NASA And Big Tech Are Facing Off Over This Rare Gas - 15th Jul 21
Will the U.S. Dollar Lose Momentum In the Second Half of 2021? - 15th Jul 21
Bitcoin Stock to Flow Model Forecasts Infinity and Beyond! - 14th Jul 21
Proteomics: The Next Truly Massive Investing Opportunity - 14th Jul 21
Massive Solar Storm to Hit Earth 2025, Coronal Mass Ejection (CME) Danger and Protection Solutions - 14th Jul 21
Is This The Best Way To Play The Coming Helium Boom? - 14th Jul 21
Meet SuperMania and its Ever-Present Sidekick, SuperMeltdown - 14th Jul 21
How NFTs Are Shaking Up Arts Trading - 14th Jul 21
Gold: High Time to Move Out of the Penthouse - 13th Jul 21
Climb Aboard! Silver Should Run Up To $38 In Next 30 Days - 13th Jul 21
How Will Remote Work Impact the U.K. economy? - 13th Jul 21
Why Helium Stocks Are Set To Soar in 2021 - 13th Jul 21

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

The Simplest, Most Effective Strategy For Getting Wealthy in Hi-Tech Today

Companies / Tech Stocks Sep 25, 2015 - 09:30 PM GMT

By: ...


Keith Fitz-Gerald writes: Today’s financial markets are more complex than they’ve ever been, leading many investors to believe their investment strategies have to be equally complicated to work.

That’s simply not true.

In fact, simple is always better… and potentially one whale of a lot more profitable, too.

Today we’re going to talk about how a specific event triggered an entry point in an industry that will cost the world’s economy $575 billion this year alone. And, as usual, I’ve got two suggestions for you that could lead to big profits based on a Total Wealth Tactic so simple you’ll be kicking yourself if you haven’t thought about it before.

But first I want to share a story that sets the stage and explains why something America’s first millionaire west of the Mississippi did in 1849 is the key to your profits 166 years later.

Here’s your entry to play the global economy’s $575 billion challenge.

Apple Just Experienced the Unthinkable – And That’s Your Opening

Apple has long enjoyed a reputation as a “safer” platform than Windows and Droid by virtue of the fact that its operating systems have been tightly controlled and the applications sold in its App Store are carefully screened. Developers working on even the most minor changes can often wait weeks to hear whether they’ve been approved or not, for example.

But Apple’s veil of impenetrability came crashing down on news that Chinese hackers had planted a malicious program called XcodeGhost in thousands of iOS applications that are used by hundreds of millions of Chinese Apple customers.

The program, like many malicious programs, allows attackers to send commands to infected devices that are then used to steal personal information like names, passwords, financial accounts and more.

Normally, Apple would catch this kind of stuff when it reviews the coding driving each app. But in this case, the hackers did something very clever. They concocted a counterfeit version of Apple’s Xcode toolkit that developers use to create applications and made it available to otherwise legitimate developers, enticing them to use it via faster download speeds.

You wouldn’t think something as simple as a faster download would be such a temptation, but in China it is. That’s because the Great Fire Wall of China makes downloading anything from international sites a laborious and tedious process – including legitimate Apple Xcode tools. Domestic Internet speeds are roughly 3-5 times slower than those in America, to give you an idea.

Anyway, that’s why it makes perfect sense that hungry Chinese programmers leapt at the chance to get their hands on domestic Xcode even if it wasn’t the real deal, and why the hackers could make their move so easily.

Outside China, the situation is much the same, and the problem is getting worse by the minute. Anybody with a tech device is vulnerable, from the 21 million people exposed when the U.S. Office of Personnel Management got hacked to the 32 million Ashely Madison users who found themselves reeling from lists published to the “dark web.”

This kind of stuff is so bad that McAfee Inc. and the Center for Strategic and International Studies estimate that cybercrime will cost the global economy $575 billion this year alone.

According to the Government Accountability Office (GAO), cyberattacks in the U.S. have increased 1,100% since 2006 – and those are only the incidents the government chooses to acknowledge.

Source: The Government Accountability Office (GAO)

Worldwide, this is a multi-trillion dollar problem.

It’s also extremely dangerous and goes way beyond apps.

World War III As Einstein Didn’t Imagine It

When asked about the frightening development of advanced weapons used in WWII, Albert Einstein reportedly quipped, “I know not what weapons we’ll use in World War III, but World War IV will be fought with sticks and stones.”

I agree. World War III will be “unlike any other conflict,” wrote authors Peter Singer and August Cole in their June 2015 article The Reality of Cyberwarfare.

When a series of technical glitches halted trading on the New York Stock Exchange last summer, fears immediately turned to cyberattack, with the term “cyber Pearl Harbor” thrown around. I don’t find it particularly reassuring that our government denied a breach, given the state of geopolitics at the moment.

To be very blunt, any investor who has not got this on their radar screen is being naïve.

And that brings me back to where we started.

Cybersecurity is a complicated field with thousands of players. It’ll be hard to sort out the winners because many won’t make it.

So you need to take a simple page from history… in 1849.

That’s when an estimated 300,000 “forty-niners” took to the hills of California hoping to strike it rich by mining gold. Most didn’t, but a man named Samuel Brannan did using a very simple strategy.

He owned the only supply store between San Francisco and the mining fields and became the first millionaire west of the Mississippi by selling picks, shovels, and other essentials to anybody hoping to strike it rich.

I recommend you do the same thing when it comes to cybercrime and data security.

It makes no sense to try and tap into your own gold mine like millions of investors are doing. Instead, I want you to take a page from Brannan’s playbook and use another Total Wealth Tactic: Picks & Shovels.

Create Your Own Forty-Niner Fortune

The best way to do that is also the simplest – the PureFunds ISE Cyber Security ETF (NYSEArca:HACK).

I recently re-recommended it to Money Map Report subscribers because the Apple attack highlighted just how vulnerable everybody is… including those previously thought to be immune from compromise. It’s been beaten down 15% since June, which is more than double the corresponding S&P 500 sell off of only 6.1%.

HACK is made of 32 cybersecurity companies chosen because they represent companies fighting breaches representing 92% of all data breaches. This is stuff like insider misuse, denial of service attacks, point of sale theft, and cyber espionage.

The companies included develop a mix of software and hardware while also providing consulting services and or specific security services directly to their clients.

Each component has to be an operating company and not a closed end fund or another investment vehicle. So we’re talking direct investments here. Moreover, to be included a company has to have a market capitalization of at least $100 million.

No single component can represent more than 20% of the underlying Cybersecurity™ Index, so you’re not going to have any one security representing a disproportionate amount of risk over time.

Now, I know that some of you reading this will want to play an individual company anyway, so here’s one for your consideration – FireEye Inc. (NasdaqGS:FEYE).

I think the $5.63 billion company is a potential takeover target, and that it’ll be Google doing the buying.

It’s riding high, having beaten Q2/2014 revenues by 56% last quarter, suggesting that the company is pulling ahead of the cybersecurity sector itself. Even more promising to my way of thinking, though, the company reported 65% international growth from revenues even as it added 300 more corporate and government clients to its rolls.

That makes sense considering the company’s best known product – Mandiant – played a critical role in repairing high-profile cyberattacks at Home Depot, Sony, and Anthem, for example.

In keeping with our preference for deep value and tremendous upside, I love the fact that the company is down 35% from last June following the rumored collapse of buyout talks with Cisco, because that tells me there’s plenty of speculative energy powering it.

If there’s a drawback, it’s that FireEye has a $5.63 billion valuation despite the fact that it has a negative 93.12% profit margin and a negative 38.74% Return on Equity. Ergo, it’s a speculative play of the first order.

So keep any investment to 2% of your capital to limit risk and make sure you’ve got a trailing in place just in case.

Until next time,



Money Morning/The Money Map Report

©2015 Monument Street Publishing. All Rights Reserved. Protected by copyright laws of the United States and international treaties. Any reproduction, copying, or redistribution (electronic or otherwise, including on the world wide web), of content from this website, in whole or in part, is strictly prohibited without the express written permission of Monument Street Publishing. 105 West Monument Street, Baltimore MD 21201, Email:

Disclaimer: Nothing published by Money Morning should be considered personalized investment advice. Although our employees may answer your general customer service questions, they are not licensed under securities laws to address your particular investment situation. No communication by our employees to you should be deemed as personalized investent advice. We expressly forbid our writers from having a financial interest in any security recommended to our readers. All of our employees and agents must wait 24 hours after on-line publication, or after the mailing of printed-only publication prior to following an initial recommendation. Any investments recommended by Money Morning should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company.

© 2005-2019 - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.

Post Comment

Only logged in users are allowed to post comments. Register/ Log in