Profiting from “the financial singularity”

Mark Zuckerberg and Oculus Rift © Getty Images
Facebook and Oculus Rift soared to $1bn market cap in no time

In the relatively short time humans have been on earth, there have been five great ages of progress. What most people don’t realise is the time it takes for these revolutions to come about is accelerating at a shocking rate.

As inventor and futurist Ray Kurzweil notes: “Because of the explosive nature of exponential growth, the 21st Century will be equivalent to twenty thousand years of progress at today’s rate of progress; about one thousand times greater than the 20th Century.”

What that means is that you are going to see things you thought you’d never live to see. The next great age is upon us.

Most people don’t understand the rapid change technology has on their life, the speed at which change occurs, or why it could make them more money than they’ve made in their entire lives.

Grand disruptions create millionaires

At the start of the Industrial Revolution nearly 200 years ago, the big money was to be found in Western Europe – particularly here in Britain.

Britain dominated invention, science and manufacturing. It built factories, developed mass labour and invested capital into revolutionary ideas.

Naturally, the money flowed. And the great investors of the time made their millions. Charles Algernon Parsons and Henry Bessemer were two such men – engineering titans who embodied the entrepreneurial spirit of the age.

Then, around 1909 something extraordinary happened. With the invention of the motor car, made using a new technique called mass production and consuming vast amounts of oil, a new wave of progress began. This time America was its epicentre.

Those three ideas – mass production, oil consumption, and cheap, efficient motorised travel – changed the way people lived, worked and communicated forever. Of course, the money followed.

America became the richest nation on the planet. And the early backers of these endeavours – the investors – got rich beyond their wildest dreams. You’ve heard of them, I’m sure. Legendary money-men, such as Benjamin Graham, JD Rockefeller, JP Morgan and Jesse Livermore, to name a few, pulled in gigantic fortunes from these ripe market conditions.

Eighty years on, even more money was made – this time by early investors smart enough to pounce on the leaders of the information revolution. Companies including Microsoft and Amazon earned investors £50,000 for every £1,000 they put in, in a span of just a decade.

The pace of change is becoming more rapid. And the speed at which money is made is accelerating too.

What comes next is what I’m calling “the financial singularity”. Because the point at which companies and investors can generate immense wealth is hitting an exponential curve.

The financial singularity has arrived

For any company, growing from zero to $1bn is a tough task.

If you’ve ever started your own company you’ll know this already. Most companies never manage it. Most never even get close. When you’re at zero, growing to a ten or even a $1m valuation feels like a lifetime of work.

So making it to a billion is a distant goal. It’s a dream. It’s like boarding a flight to Paris and hoping you’ll end up in Neverland.

So for those companies that do manage it, it takes a long time. My colleagues at Bonner & Partners did some research into this subject. They found that the typical Fortune 500 company takes just under 20 years to reach $1bn. I’d say that’s pretty good going.

But one thing that’s certainly always been true of tech companies – and in particular, software companies who don’t have to manufacture tons of hardware and other expensive stuff – is that they grow much quicker than “typical” companies. Google took less than ten years to reach $1bn. Facebook took just over five.

Tech companies might grow faster than typical companies; that’s obvious. But the interesting thing is that this trend is accelerating over time.

More and more companies are shooting from zero to $1bn at an ever faster rate. This chart tells the story:

Time take to get to market cap of $1bn

Like many, the information revolution probably took you by surprise. It’s very likely you didn’t make 1,000% on Amazon, Google or Microsoft because you couldn’t anticipate that their technology would have such a deep impact on the world around us.

That’s what this special week in Money Morning is all about – showing you ahead of time how you can position yourself early. You could join the ranks of the investors who made lasting fortunes from these great disruptions.

If you think this could never happen to you – why not?

Thousands of people will make huge amounts of money when the next great disruption begins.

And everything is pointing to this great change being imminent.

Let’s keep it to what we know.

The world is speeding up. Tech companies are riding this wave to grow faster than ever before. And high growth correlates with high return on capital.

Follow this trend to its logical conclusion and not only do you see a world where social, technological and medical advancements sweep the planet at a rate that will shock people, it’ll also be possible to make more money, more quickly, than at any other point in investment history.

In fact, it has already begun. We’re starting to see the early movers of this next great age of progress bolt up in price:

• Rock Tech Lithium – up 1,515%
• Tobira Therapeutics – up 272%
• Colucid Pharmaceuticals – up 853%

All of these moves came in just 12 months. And this is just the beginning.

This is a rare and powerful convergence of financial and technological exponentiality. And you are in the perfect moment to take advantage of it. I don’t know what your circumstances were 30 years ago at the dawn of the information revolution. Perhaps you didn’t have the money or the sense of perspective to know when to act on an opportunity.

But if you do now, it could prove immensely lucrative for you.

The real money isn’t made by jumping in and out of hot stocks. It’s made by backing the companies at the very forefront of the revolution and hanging on to them as they multiply in value five, ten, even 20 times over.

That’s what I want to show you how to do.

The culmination of this week’s special series will be revealing to you a way you can invest in advance of the next world-changing disruption.

I’ll show you what the next great age of human progress is all about, and show you four specific investments you can make immediately for a potentially mammoth personal gain in the years ahead.

You may have missed out on the last great age. But stick with me this week and I will make sure you don’t miss this one.

  • AssHat900

    Great chart. I have one shows a navel pirate attacks have been going down at the same rate cancer has been going up. If we want to cure cancer we will need to increase the number of pirates.

    • SonOfTheIsles

      Why would pirates attack a person’s belly button (navel)?

      Surely by your metric fewer pirates means less cancer therefore no pirates means no cancer.

  • Colin Day

    Don’t you just love reality checks

  • Brad Arnold

    What isn’t obvious is that all wealth is created by people’s minds. If you grok this, then you will more fully appreciate what will happen in a decade or two when artificial intelligence becomes smarter than humans (ASI). It is the Singularity Feedback Loop, where intelligence creates technology, and technology improves intelligence.

    What will a Post Singularity world (one where ASI has emerged) look like? Even futurists differ, but certainly it will usher in an abundance economy, not one based upon scarcity like we now suffer from. Exponential improvement is very difficult to imagine because it quickly swims with almost incomprehensible concepts.

  • The singularity is the ultimate bubble though. When it finally arrives, by definition conventional wealth will instantly be made archaic and obsolete. This is like saying “Armageddon: The Ultimate Driver of Cheap Real Estate Opportunities.”

  • anyoldirony

    Snake oil is The Next Big Thing. Subscribe to my newsletter to learn how YOU can be richer than your wildest dreams.


Claim 12 issues of MoneyWeek (plus much more) for just £12!

Let MoneyWeek show you how to profit, whatever the outcome of the upcoming general election.

Start your no-obligation trial today and get up to speed on:

  • The latest shifts in the economy…
  • The ongoing Brexit negotiations…
  • The new tax rules…
  • Trump’s protectionist policies…

Plus lots more.

We’ll show you what it all means for your money.

Plus, the moment you begin your trial, we’ll rush you over THREE free investment reports:

‘How to escape the most hated tax in Britain’: Inheritance tax hits many unsuspecting families. Our report tells how to pass on up to £2m of your money to your family without the taxman getting a look in.

‘How to profit from a Trump presidency’: The election of Donald Trump was a watershed moment for the US economy. This report details the sectors our analysts think will boom from Trump’s premiership, and gives specific investments you can buy to profit.

‘Best shares to watch in 2017’: Includes the transcript from our roundtable panel of investment professionals – and 12 tips they’re currently tipping. The report also analyses key assets, including property, oil and the countries whose stock markets currently offer the most value.