Investing in the Metaverse … Buy HAPI Stocks for Futuristic Profits
The metaverse is coming…
This is the fusion of the virtual and physical worlds. I know … mind blowing. But we’re at a point in America 2.0 where our “real world” is going online.
This takes a massive mega trend mashup: artificial intelligence, Internet of Things, chips and cloud computing.
The investment potential is extraordinary. I’m featuring a stock for this trend in my next Profits Unlimited newsletter.
To see how you can get my laser-focused America 2.0 stock recommendations, you can check out details on my “mega trend blueprint” featured in my Profits Unlimited book here.
But our metaverse exposure started right here … with HAPI 😊!
Watch today’s Bold Profits Daily to see our HAPI roundup, including our metaverse prediction and more:
4 ETFs to Invest in the Metaverse – Futuristic Trends
We have a good track record of actually picking pretty good stocks. We are going to cover one of the portfolios I have had on YouTube for a bit, which is HAPI. Thus far, we have not generated significant returns, but we will cover it again.
In today’s video I cover a portfolio that I put up on January 19, 2021. Thus far, this portfolio — HAPI — is up about 2%. You will see in this theoretical portfolio we put $1,000 into four ETFs. For those of you who don’t know what ETFs are, they are portfolios that trade like stocks.
They are usually thematic, related to one sector, industry or theme. I put together four of these ETFs in a portfolio called HAPI. Today I am going to, once again, lay out the opportunity set that made me focus on these four ETFs, sectors and industries. They reflect a lot of the ideas we have across our services.
Global X Video Games and eSports ETF (Nasdaq: HERO)
I recently saw a headline from the CEO of Nvidia. It said, “The metaverse is coming.” The CEO of Nvidia talked about the fusion of virtual and physical worlds.
An example used was the car manufacturer, BMW, creating a virtual replica of their actual factory that makes cars that exists only in an online world. Now they can run various things that would cost a great deal and would be impractical or impossible to do because it would require so many moving parts.
However, in the metaverse — an online universe — you can do these things. You can run stimulatory experiments. You can run scenarios. You can do a number of things you might not think to do because they would seem unthinkable and you would dismiss them.
Nonetheless, in the metaverse you can do these things. You can use that data to actually impact what you might do in “the real world.” We can fuse the online world with the real world. The name for it is the metaverse. I believe the metaverse has extraordinary potential to be an extraordinary investment idea.
It has the ability to take these ideas that could previously only live in your mind. Now you can actually implement them with very little cost, effort and resources and come up with answers, new ideas, calculate potential and cost — all these things that were unthinkable.
They already exist. Those of you who are gamers who play Minecraft or Fortnite, you know those are metaverses. People are always making things there. Those things sometimes affect actual ideas. You can listen to various architects and engineers talk about how playing Minecraft inspired various things.
This is now becoming a formal thing. In fact, I have been so impressed by the potential of the metaverse that we have actually made it the latest stock pick in Profits Unlimited, which is our flagship newsletter. It goes for $49. If you are interested, click on the strong hands.
It will take you to a page that will show you a promotion and invite you to subscribe. Profits Unlimited is a multi-cap investment newsletter. Multi-cap means we go from small stocks to very large stocks. The idea is to give you broad exposure to the kinds of themes and megatrends we focus on.
In this moment, we are generally focused on technology megatrends like the metaverse. The stock I recommended, I believe, has extraordinary upside. It’s one that is used by kids today. I believe the average age of a person on this metaverse is well under 25 years.
This is going to be something that people learn to program in and think in. It’s extraordinary. It’s like getting into Apple and learning Apple’s way 20 or 30 years ago. The reason I put HERO into HAPI is that it’s first coming to reality through video games. Video games by their very nature are simulations.
You are in some situation and you are solving a problem, trying to get some prize and you have to keep doing things. One of the places we are going to see the benefit of the huge growth of metaverse is going to be in video games where they will become faster, have more capabilities.
That will all now draw even more people to start to use them. That will cause people to want to come and buy the stocks of these companies that make these metaverse worlds. HERO is an ETF that has a broad smattering of gaming companies. They have some non-metaverse companies as well.
However, if you want broad exposure, which is what an ETF is designed to do, HERO will give you that. Through that, you will get some exposure to what I believe is going to be an extraordinary opportunity through metaverses. So that’s number one.
ARK Fintech Innovation ETF (NYSEArca: ARKF)
This is from our friends at ARK Invest. To talk about this one I looked up a report from a prestigious consulting company called BCG. They had this headline that said, “The sun is setting on traditional banking.”
It reminds me of what was the scenario and mood 10 to 15 years ago when forward-thinking people began to see that companies like Macy’s, Sears and JCPenney, their days were numbered. Amazon was small, but it was growing fast. People could see the upside, the convenience factor, the reduction of cost and the choice you would get from online retailing.
That’s where we are with banking. In this BCG report, they had this chart that talked about customers turning to digital banking during the period of COVID. Obviously most people had no desire to go to banks and employees had no desire to be at banks. So people went to use mobile apps.
People used any sort of online interaction. You can see the telling number there is that we have a large number of people completely comfortable with depositing money into a digital bank. In other words, using their phone to deposit money. You can also see in the last part the use of ATMs is -5% and the use of branches is -12%.
That’s a big problem for banks because a significant amount of their cost is in their bank branches and physical locations. Increasingly, many people are saying they have no interest in using them. Of course they have a lot of employees there and they have spent money on technology to run those branches.
This is now of declining use. It used to be called retail banking. It’s being disrupted by companies like Square, PayPal, Acorn and Chime. There are an extraordinary number of companies coming at finance and money in completely different ways that make it easier, more convenient and provide greater access to more people.
They are coming for every aspect of the money industry. Everything from banks to insurance to money management. Everyone is seeing disruption. I believe their time is nearly done. People can look backward and look at companies like Wells Fargo and Bank of America, the truth is, they are being disruptified as we speak.
It’s just a matter of time before they start to shrink. Eventually, a number of them are going to go bust like Sears. I would tell you this is one of the highest confidence bets I believe you can make in disruption. The current financial system is old, inconvenient, expensive and slow.
We have a great replacement that is now ready and capable of doing everything faster, better, cheaper and for more people with greater access. One way to get exposure to it is through the ARK Fintech Innovation ETF. It has a large number of companies associated with these kinds of disruptive companies.
ARK Invest, for those of you who don’t know, is an investment management company that is — like us — solely focused on innovation and disruptive companies. You won’t get any companies like Wells Fargo or anything like that if you are buying into ARKF. That’s the second ETF in HAPI.
The 3D printing ETF (BATS: PRNT)
Those of you who are subscribers know we are all in on 3D printing. I believe this is a transformative technology. When people look back five years from now, they will say, “That was so obvious. It was so clear.”
It’s so different from the old way of making things where you use lathes and mills and all these ways. Instead, now you print things. It is already being used by the most forward-looking industries. The example I am going to show you here is space.
If you look at this article it says, “The world’s largest 3D metal printer is churning out rockets.” It’s for this company called Relativity Space. You can see their rocket has three 3D-printed parts that are fitted together. The article says that the space shuttle had 1.2 million parts.
This rocket just has three. In truth, a regular mechanically constructed rocket has several thousand parts if you consider bolts and everything else in it. You can just imagine that having everything 3D printed allows for a rocket to be lighter, cheaper.
You can control for defects because now it’s only three parts that have to be checked. Also, you can pursue designs using computer designs that were something in the old ways of making molds would be much more difficult. 3D printing is going to do that for rockets.
It’s also doing that already for Tesla for cars and lots of other companies where they are replacing the traditional way of making parts with 3D printing. I believe this is an astonishing revolution that we are all in on. We think this is going to be a big deal.
We believe this is one of the places you need to be invested in. It’s the heart of my America 2.0 thesis. The Fourth Industrial Revolution runs through 3D printing. I believe one way you can get access to a broad smattering of 3D printing companies is to buy PRNT.
It has companies like 3D Systems, which is in the Profits Unlimited portfolio. As I mentioned, that’s our introductory investment newsletter that is multi cap.
iShares US Home Construction ETF (BATS: ITB)
This one is a demographic megatrend. We have, for the very first time, multiple generations all alive at the same time. We have folks who are referred to as the silent generation, which is folks who went into World War II.
We also have the Baby Boomer, we have Millennials, we have Gen Z coming after them. I forgot to mention Gen X as well. We have somewhere between five and six generations depending on how you count. If I forgot anybody, don’t troll me on it.
I’m just trying to get to the general idea that we have more people living longer than at any time in human history. It’s driven this huge demand for housing, especially as the millennial generation comes of age and Gen Z is right after them.
There’s this enormous pressure on housing because everybody wants to buy a house and we have not been building houses for nearly a decade as a result of the financial crisis that happened in 2008. It was partly as a result of a real estate bubble and a financial bubble that underpinned it.
As a result, people stopped building for nearly a decade. Now, I have seen as this headline says, “The housing market is nearly 4 million homes short, relative to demand.” Four million homes is a lot of homes when you consider that before you put up a home you have to get the land, permit the land, grade the land, get the supplies together, get labor together, then have everything inspected.
In other words, this represents years and years of demand that we will need to continue to keep putting up houses to meet. I believe the homebuilding industry is one that is going to continue to benefit from it. One of the ways you can benefit is to buy ITB.
It has all of the traditional homebuilders in there. They are not necessarily technologically disruptive, but they are the best representation of the disruption represented by this many generations needing housing at the same time. They are going to have to build the houses.
Over time, the more forward-looking ones will start to implement new techniques such as 3D printing to put up houses. Most of those right now are in the experimental side, but I believe at least one or two of these homebuilders are going to experiment with 3D printing to make the cost of housing cheaper, faster and so more people have access.
So those are the four ETFs in HAPI J. HAPI as a portfolio is up about 2%. It’s underperforming the S&P 500. That’s because the vast majority of the companies in each of these ETF portfolios are considered growth companies. Growth stocks have been in a correction, reaction, whatever you want to call it, since February of this year.
I believe that’s largely done. Now we are going to see buyers come in and start to bid growth stocks up and the stock represented in the HAPI ETF set. I believe we are going to catch up and then beat the S&P 500 by yearend.
If you want to get a taste of the kinds of themes, sectors, megatrends, America 2.0, what we invest in across in our Bold Profits Daily newsletter, try HAPI out. It will give you a sense for the kinds of companies, volatility and timeframes we ask you to invest in if you were investing alongside us through our investment newsletters.
Editor, Profits Unlimited