I have been a lurker on Saul’s board for about 5 years. I have made a couple of posts about nothing of importance and so I hope this doesn’t fall into the “Off Topic” arena.
I have been reading about 5G for about a month now and couldn’t figure out if it is a scam or something of importance. After reading the Motley Fools story I now believe it to be important. A copy of the Fool report is attached. https://www.fool.com/investing/how-to-invest-in-5g-stocks.as…
I know that this is not a SaaS type stock but I sure do believe that this could be an area of a lot of high growth stocks. If this doesn’t fit on this board, maybe Saul or someone else would like to start a new board headed up “High Growth 5G Stocks”, From what I and the MF sees, there is a tremendous future for high growth on many companies as mentioned in the MF article.
As Saul has mentioned on many occasions, I am not a techy type person. I too am just an old fart trying to keep up with the times and I feel this would be a great opportunity for many of the wonderful posters on this board to give us old and uninformed people of what might be a fast-growing growth area opportunity. Or, is it just a scam being promoted by a few scum analysts?
ah…
methinks the price of fame may become unsustainable…
ah…
methinks the price of fame may become unsustainable…
That post is a Poster Child example of a post that doesn’t add anything to the board but just takes up space. Please think before you post: “Does this post add anything to the board?”.
Galba,
I think you try to research Skyworks and present it along with the article (5G is not a scam) to start a conversation. Otherwise, it just comes across as asking others to do all the work for you. Go ahead and try it and I’ll guarantee you become a better investor just by putting in the time. This is true even if you decide, no this stock isn’t right for me. You have to turn over alot of rocks to find the good stuff. Probably all of here are constantly looking at new companies and for whatever reason it just doesnt make it to the portfolio.
I dont believe the other companies listed would be growth stocks here (mostly mega caps).
Best,
Matt
I feel this would be a great opportunity for many of the wonderful posters on this board to give us old and uninformed people of what might be a fast-growing growth area opportunity.
Sorry… but we’re all in this together. Instead of begging someone else to do your work, why don’t you pick a 5G firm that you feel has a significant advantage and post a summary of their financials, outlook, moat… etc.
Start with the outline of Saul’s post “How I pick a company to invest in” (found under “Announcements” on the right), and familiarize yourself with Saul’s Knowledge Base postings (same location). Doing is learning.
🆁🅶🅱
…But through the eternal night …The twinkling of starlight
…So very far away …Maybe it’s only yesterday
Galba,
Some thoughts…
5G certainly isn’t a scam…it is a real technology that is just starting to get deployed.
However, what I think is (possibly) a scam is the great benefits that people say will instantly cause some stocks to surge. IMO it will mostly be a 5-10 rollout or slower.
IMO, most of the companies that will be selling 5G will be large companies that 5G will hardly move the needle on. For example Apple and Samsung selling phones. They are already selling lots of phones. Most people won’t pay extra for 5G…they’ll wait until most every phone just has it.
Why? Because there is no big benefit to 5G on day one. There are very few cities that even have it and coverage is poor. And what is the big benefit? Faster email? No. Better video quality – maybe.
How many people care – you are watching a video on a tiny screen!
I’m sure that some better use cases will come, eventually. The biggest advantage for 5G, IMO, is that more devices are supported per square mile – not really a user benefit, but more like just keeping up with growth. Few developers are going to make some next big thing until there are 10’s of millions of users in the US and lots of coverage.
Ask yourself what is the one app you’d pay extra for today to get higher bandwidth and lower latency?
Who else could be a 5G company? The cell carriers like AT&T, Verizon, etc. Are they going to charge extra for a 5G account? Doubtful because who and why would they get it? And these guys have to invest billions to put up new towers everywhere. This means they need more income to cover these costs or sacrifice profits. Spend too much too fast and profits suffer. Spend too little immediately and customers switch carriers.
Two more possible 5G investments. Companies that actually build and install towers. And companies that make the 5G equipment that goes into the radios on the towers.
I’ve read articles claiming that the tower builders will do well. Maybe. But what is their moat? This is a labor intensive construction project – not really a high margin SaaS-type stock at all. OTOH, they may really be real-estate leasing companies. Maybe this should be discussed on a real estate board.
The telecomm equipment makers could do well. But again these are already big companies (i.e QCOM)
r, is it just a scam being promoted by a few scum analysts?
Eesh, as the author of that piece I hope I’m not a “scum analyst.” Little harsh, no?
Not sure if any of those stocks are Saul’s style though, (Xilinx might be close) which is why I don’t bring them up here.
Matt
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I agree that most of the companies directly involved in 5G are already megacaps. That said, the increase in speed and density allow applications which are new. The obvious one is self-driving cars (again, mostly megacap), but it’s the imagination of creating new applications which will provide us with opportunities.
One of the challenges with 5G is that, the higher the frequency, the more data which can be carried - but the less “penetrating” the signal is (and is prone to being blocked by building walls, etc.).
I think, over the next decade, on a world-wide basis, massive amounts of money will be spent on 5G and technology which uses it - and it behooves us to keep our eyes open for new companies supplying novel, but t desirable products which utilize it. And, of course, solving the frequency-bandwidth conundrum will be important if some company figures out how to economically solve the problem.
Jeff
The biggest beneficiary of 5G will be those companies that profitably expand the IoT. As suggested by @OrmontUS, self driving cars will utilize 5G when and where available, but, as implementation of 5G will be spotty for years to come, a hard dependence will be avoided.
So look for IoT applications that are more or less geographically stationary to find the areas in which 5G will be the most benefit. Does this tie in the SaaS cloud based apps? Probably in some ways it does, but off the top of my head, I don’t know exactly what those apps might be. Further, even if I did, what would I do with the information. I’m not a venture capitalist, just a garden variety investor. When those companies go public they won’t be difficult to identify.
In the meantime, I won’t waste my energy trying to sus it all out.
One of the challenges with 5G is that, the higher the frequency, the more data which can be carried - but the less “penetrating” the signal is (and is prone to being blocked by building walls, etc.).
One of the consequences of which is that one can only have quite short distances between antennas, conjuring up images of an antenna on every streetlight or whatever. I have started to see some pushback on this based on aesthetics and radiation.
The obvious one is self-driving cars (again, mostly megacap), but it’s the imagination of creating new applications which will provide us with opportunities.
I’ve seen numerous articles saying self-driving cars will need 5G, or get enabled by 5G.
I say BS.
First, a self-driving car MUST be able to drive and be safe without any constant connectivity or the whole transportation system will collapse when there is an outage of any type (bug, terrorism, accident, hurricane evacuation, malware). So the idea that 5G “enables” self driving is nonsense…the system cannot be built to rely on 5G. Yes, maybe it sometimes works a bit better with 5G.
Second, I’ve seen the the idea floated that highly detailed (to the cm) maps of cities are being built and as you drive you’ll download these maps. Again, this makes no sense. Yes, you might download better more accurate maps for new places you drive to. But most of the time people drive in the same places…so you won’t need to update your maps continuously as you drive. You could get fresh downloads at night. You can’t expect a car to require the latest maps because even a 1 minute old map isn’t going to have the accident caused lane closure that just happened. It might just be “nicer” to have the latest road closure info. But what difference is it really going to make in that 5G gets you new traffic info 25 ms sooner? You don’t need to download a movie of the accident.
Note that even as Moore’s Law slows a bit…the density of memory, especially flash memory continues to march forward. You can get a terabyte for around $100 (OEM, into a computer) so expensive self driving cars will have plenty of storage.
5G will mean faster and higher quality youtube videos with plenty of ads.
Mike
5G will mean faster and higher quality youtube videos with plenty of ads.
I agree with what you said about enabling self-driving cars being BS. I don’t see that either. The cars will rely on on-board sensors more than anything for actual driving. 5G and mapping will be more for route planning, congestion avoidance, etc. Maybe even car to car communication. Imagine emergency vehicles being able to open paths in traffic or stop cross-traffic.
Where I see 5G being a larger impact is going to be in IoT type stuff, especially in terms of industrial, factories, automation, etc. I’ve read a lot that this technology is going to displace WiFi in many of these situations. Think of local private 5G networks for this type of thing. Higher speeds, better connectivity, less latency, etc. It will find its way into our phones for sure. But 5G is going to open up new opportunities. I expect market-beating returns easily in this space, but almost certainly not the types of returns SaaS has given the last 2-3 years.
Eesh, as the author of that piece I hope I’m not a “scum analyst.” Little harsh, no?
Not sure if any of those stocks are Saul’s style though, (Xilinx might be close) which is why I don’t bring them up here.
TMFCochrane
I personally think a lot of the companies that will benefit from 5G probably have not been invented yet.
Also, I think right around now, investors should probably start paying attention to 5G because 5G is NOT likely some technology that is way off in some distant future. 5G should start appearing in more and more places over the next two or three years and as use cases appear, new and interesting companies should also appear. The infrastructure for 5G has already started being built out now in 2019 and infrastructure build-outs should accelerate in the latter half of 2020 going into 2021. Also, affordable 5G phones will likely start appearing in the back half of 2020.
Today, Qualcomm announced a new chip that should not only make 5G phone technology more affordable but also make it so that the modem does not suck the life out of the battery:
The big problem with 5G — or one of the big problems — is that it’s suffering the same issues LTE had when it first landed: It only works in a few markets, and most phones don’t support it. Worse, the few devices that do support it use external modems which aren’t built into the chipset, and like the early LTE phones, that means issues like decreased battery life. Thankfully, new chipsets with 5G support built-in are on the way, with Qualcomm announcing its own earlier this year. Today at IFA, Qualcomm has further revealed that the promised chip will be landing in products as early as the beginning of next year, with more 6-, 7-, and 8-series chipsets getting built-in 5G support next year, too.
Read More: https://www.androidpolice.com/2019/09/06/why-you-might-actua…
On another note, people that have a interest in 5G should probably research the technology for themselves and not simply listen to articles written by reporters that do not understand the technology or listen to “advice” gleaned off of stock boards.
If a 5G investor does not know the difference between Sub-6 and mmWave, then they should probably should be going back to the drawing board as far as learning about 5G. If a investor does not know what massive MIMO is, then they should probably should be going back to the drawing board as far as learning about 5G. If a investor does not know what 3GPP is, then they should probably should be going back to the drawing board as far as learning about 5G. If a investor does not know what CBRS is, then they should probably should be going back to the drawing board as far as learning about 5G.
If a investor does not know the difference between a digital modem and a analog RF device then they probably should not speak definitively on competition between various component players in the wireless industry.
I have seen many “people” speaketh on 5G and have little clue about what they are talking about as far as the state of the technology is concerned that it is why the subject must be researched for one’s self, in order to understand the subject.
A good resource to start learning about 5G is here: http://www.emfexplained.info/?ID=25916
Once, one has a basic understanding then the best resources to understand the latest information about the technology is reading the websites of the organizations creating the standards for 5G such as ETSI: https://www.etsi.org/ and 3GPP https://www.3gpp.org/
The other resources a investor should listen to or read is every earnings conference call or company presentation by the following companies: Skyworks Solutions, Xilinx, American Tower, Qualcomm, Crown Castle, Corning and perhaps Broadcom & Qorvo might be good too. The conference calls of the above companies will often talk about actual 5G build-outs and use cases.
Last but not least, Matthew Cochrane article https://www.fool.com/investing/how-to-invest-in-5g-stocks.as… accurately portrayed 5G as it appears today, in my opinion, including mentioning the risks involved with investing in 5G.
However, the 5G scene is moving so fast that investors should be aware that some information in the article could be dated. For instance this:
For instance, there are a number of semiconductor companies that place prominently in the 5G ecosystem. While some of these companies’ products seem more secure than others, there is absolutely no guarantee, for example, that a new Intel chip will not displace a competing chip from Skyworks Solutions.
https://www.fool.com/investing/how-to-invest-in-5g-stocks.as…
Leaving out the fact that Intel never had a chip capable of competing with Skyworks RF devices, Intel has since sold their modem business to Apple, so Intel is not involved very much with wireless any more but otherwise the rest of that article is fairly accurate, in my opinion.
Starrob
If a 5G investor does not know the difference between Sub-6 and mmWave, then they should probably should be going back to the drawing board as far as learning about 5G. If a investor does not know what massive MIMO is, then they should probably should be going back to the drawing board as far as learning about 5G. If a investor does not know what 3GPP is, then they should probably should be going back to the drawing board as far as learning about 5G. If a investor does not know what CBRS is, then they should probably should be going back to the drawing board as far as learning about 5G.
Misuse of the “drawing board” phrase aside, Starrob’s advice goes directly against Saul’s investing philosophy, as stated in the Knowledgebase:
Do I need to understand the technology or the industry to buy a company? Someone commented that “but I can’t imagine following them because I don’t feel that I understand the industry.” Well I almost never understand the industry or the technology. I don’t know anything about banking but I am invested in SBNY and INBK. I don’t know anything about microchips but I have invested in SWKS and others. I don’t know anything about the shoe business but I have invested in SKX, etc. All successfully so far. I invest not based on knowledge about the industry, but on the fundamentals and progress of the company itself.
https://discussion.fool.com/knowledgebase-newly-revised-part-1-3…