This Month in Tech: Weird, Wonderful Portfolio Shapers

Most successful long-term investors I know are practitioners of fundamental analysis. They develop a deep knowledge of a company and their industry and avoid unsystematic risk through careful portfolio curation.

While this has been proven to work, this methodical approach can lead to drilling down wormholes and focusing on verticals. We may miss what is happening just off the side that could kibosh a single firm or an entire industry.

When we need to see the breadth of opportunity in technology we need to look sideways – we need to be students of change so we can see opportunities before the market prices them.

With that in mind, in today’s column I’m highlighting 10 tech news stories that occurred only in the past month. Stick around for insights as to why it matters, where it might go and how investors might see opportunities as a result. Buckle in for a few weird and wonderful, mind-opening, future portfolio shapers.

3D-Printed People Parts

A company called 3DBio Therapeutics has successfully pioneered the transplant of a 3D bio-printed body part — an ear. It’s a world-first implant of living tissues, where scientists 3D-print cartilage using a malleable "ink" composed of human cells. This technology can print any desired shape and, most importantly, retain that shape with its internal “skeleton” of fibrils. 

The ability to bio-print vital organs and increase life expectancy has strong potential to radically shape medicine and other age-related industries. We are now entering an age of not only renewable energy, but renewable humanity.

Facial Search Engine

A website called PimEyes has emerged with some scary superpowers. It boasts the ability to search for a face or any image, to unearth obscure photos would otherwise have been remained hidden in the digital history of the internet. At a cost of $US29.99 per month, it is creating privacy and security fears for everyone. You won’t even have to know a person’s name to hunt them down.

Admittedly, it also offers handy commercial implications, like finding unauthorised photos of copyright material or celebrities being used without approval. However, it seems their business model leans towards making money out of people who wish they weren’t on certain websites.

As privacy incursions increase, we should expect it to enter ESG governance and regulation more strongly. Invading privacy will eventually be seen as a form of digital pollution.

World’s Smallest Robot

A team at Northwestern University have developed the world's smallest robot. Smaller than a flea, the miniscule remote-controlled robot can crawl, walk, hop, bend, twist, turn and jump. It has no machinery or hydraulics, complex hardware or electricity. Instead, it has a pop-up book-style mechanism.

We are now entering the era of nano-scale robotics, which opens up work and industry solutions in tight spaces where repairs have previously been difficult to impossible, even inside the human body.

Commercial Robo-Taxis, Finally

GM has become the first auto maker to gain approval for commercial robo-taxis. Approval to operate has been granted in San Francisco and will include rides without a safety passenger on board. Some of its limitations include not being able to exceed 30mph, avoidance of level crossing and access to only one third of the wider city. The Cruise division is a JV with Google that has beaten Tesla in the race.

It’s a reminder that technology advantage can be quickly eroded. Elon Musk has failed to deliver on his promise to have over one million robo-taxis on the road by 2020. It seems that whatever advantage the market believed Tesla enjoyed in autonomous and electric vehicles no longer exists and will eventually reflect in the share prices of original equipment manufacturers (OEMs).

Ocean Tanker Fish Farming

In May this year, the world’s first giant floating fish farm, the Guoxin No.1, set sail from China’s eastern port city of Qingdao. The boat is equipped with 15 tanks and can produce up to 3,700 tons of fish every year. It will now head to the Yellow Sea, the East China Sea, and the South China Sea to harvest the ideal conditions for different types of fish to be cultivated in their optimum temperatures. It is said to have a limited environmental impact.

It’s another example of scaled innovation coming out of China. It does raise questions of border sovereignty, but also provides insight into how we might feed 12 billion people.

Radical Renewables

This month saw a number of interesting and large-scale renewable projects. These include Europe’s first floating solar project, a deep ocean electric turbine trial in Japan that claims to be capable of producing 60 per cent of Japan’s electricity needs, and the tripling of China’s solar projects in the first four months of 2022. 

This should remind investors we are going through a global energy systems shift. The game has moved from extraction of energy to capture, storage and distribution. The war in Ukraine will only speed up the inevitable. We can expect energy to eventually be a very low to zero marginal cost production process.

More Funding Folly

WeWork founder Adam Neumann recently launched a startup, Flowcarbon, to sell tokenized carbon credits on the blockchain. Despite his failings at WeWork, Neumann has surprisingly managed to raise US$70 million from famed venture capital firm Andreessen Horowitz. In case you’ve forgotten, Neumann lost US$6 billion in a mere 18 months - US$13.1 million a day. He managed to exit WeWork unscathed with over a billion for himself. The company however, ended up being worth less than 10 per cent of what was invested in it. While interest rates might be rising, it seems that private and seemingly risky funding of emerging tech has yet to slow significantly.

Fossil-Free Steel

While every OEM worth their salt is swiftly moving to EVs, Volvo has taken the next step launching an EV truck whose steel components are manufactured entirely fossil free. This is a part of the broader movement towards Volvo being a carbon-free company by 2040. It raises important questions about carbon offsets that can be sometimes questionable. It also reminds investors that branding at a corporate ESG level generates PR and maybe one day, higher PE ratios.

NFT Theft

While the NFT bubble deflates, actor Seth Green had his Bored Ape — valued at over US$200,000 — stolen. Having planned to use the Ape in an animated series, Green has begged the thief for its return. Raising more legal issues around digital tokens than answers, this incident reminds everyone that a purportedly unhackable technology like blockchain is only as a strong as its weakest link - usually the end users and their own digital security hygiene practices.

Mr Beast

YouTube Celebrity Mr Beast (aka Jimmy Donaldson) released a video with a real-world version of Willy Wonka’s factory. It has garnered 54 million views in a few days. Known for doing stunts and gamer videos appealing to teenagers, Donaldson launched a burger chain in December. In just six months, Donaldson has gone from zero to 300 burger ‘stores’ in four countries. It’s a drop-ship, ghost kitchen model. Jimmy used his follower analytics to decide which cities to open in. It’s yet another example of celebrities no longer looking for corporate endorsements and instead, building their own events, products and corporations. The future is direct.

Open-Minded Investors

Our job from here is simple. We need to be students of technological change, because eventually it always impacts our portfolios. It’s also important to remember that the automobile was commercialised 150 years after the start of the industrial revolution. We are only 30 years into this one.