🚂 All aboard! Qantas and Virgin have urged the government to fast-track vaccinations in a bid to speed up the return of international travel.
Fears of Australia getting left behind: This follows the government’s plan to delay reopening borders until mid-2022.
You can see why they’re hustling: Qantas stock remains over 35% down from its COVID high
Thank you to everyone who has introduced the Hype Train to friends & family. If you like our content, please forward us on - it’s what keeps us rolling each week ❤️
In today’s edition:
💡 The Rundown
🔮 Web stock analysis
🔥 Investing 101: Hype Cycle
Markets
Sources: Google Finance, HotCopper, asxbot.io
Up 69%: Nuenergy Gas was the ASX's top performer today as it announced a Government approval to help address the increasing energy gap in Indonesia.
The company itself is a clean energy company focused on the development of Indonesian gas assets.
The CEO has stated this is a major step for the company in transitioning from exploratory into a commercial phase.
The Rundown
💡
TikTok boss steps down: The Co-founder and CEO of TikTok’s owning company, ByteDance, has announced he will step down saying he prefers solitary activities as opposed to managing people.
Using AI to assess pain: Medtech company, PainChek (ASX: PCK) has secured regulatory approval for their facial recognition app that assess pain levels in pre-verbal infants…
Online events? Spotify has entered the virtual event business, now selling $15 tickets to live-streamed concerts.
The Uber of Applying to Grad Jobs: Recruitment business, Applyflow (ASX: AFW) has released strong financial results as they aim to disrupt old school recruitment platforms and job boards.
Plummeting: EML Payment’s (ASX:EML) stock has fallen 40% as Ireland’s Central Bank raised “significant” regulatory issues regarding their Irish subsidiary.
Web Stock Analysis
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Curating Reddit due diligence: This tool lets you view all the stock analysis posted by Redditors on different investing subreddits in one place
Catching the knife: A look into Appen’s (ASX: APX) dip with some fast and dirty fundamental analysis
Slot machine manufacturer: Why u/Tacomaster33 isn’t buying Aristocrat Leisure Ltd (ASX: ALL) but it could be a good opportunity for someone else
How to position your portfolio for rising inflation: Stanley Druckenmiller’s 2021 Student Investment Fund Meeting
Investing 101
🔥
The Hype Cycle
This week a reader going by the alias of Sly wrote to us regarding the Hype Cycle concept, and we thought it was so great it was worth sharing with you all.
So.. What is the Hype Cycle?
The hype cycle is an evaluation methodology developed by Gartner to look into emerging technology and attempt to identify the key stages in a technology’s lifecycle. This was originally intended to be used for more strategic management decisions, but it may also be applied for getting into investments at the right time.
How do Hype Cycles work?
Each Hype Cycle drills down into the five key phases of a technology’s life cycle.
Taken directly from Gartner these stages are:
Innovation Trigger: A potential technology breakthrough kicks things off. Early proof-of-concept stories and media interest trigger significant publicity. Often no usable products exist and commercial viability is unproven.
Peak of Inflated Expectations: Early publicity produces a number of success stories — often accompanied by scores of failures. Some companies take action; many do not.
Trough of Disillusionment: Interest wanes as experiments and implementations fail to deliver. Producers of the technology shake out or fail. Investments continue only if the surviving providers improve their products to the satisfaction of early adopters.
Slope of Enlightenment: More instances of how the technology can benefit the enterprise start to crystallise and become more widely understood. Second- and third-generation products appear from technology providers. More enterprises fund pilots; conservative companies remain cautious.
Plateau of Productivity: Mainstream adoption starts to take off. Criteria for assessing provider viability are more clearly defined. The technology's broad market applicability and relevance are clearly paying off.
How can I use this to make $$$$$?
Without any real evidence, it does seem this anecdotally holds true when applied from an investing lens.
Below is the graph for Brainchip over the last year, and while it isn’t identical to the graph from Gartner, you can still clearly identify the different stages. This doesn’t necessarily mean Brainchip has fully plateaued though… as given it’s stage of commercialisation it’s still before the Plateau of Productivity.
Essentially, for a long-term investor the model suggests that for new technology, there will be an inevitable selloff following an early speculative peak. For a technology that is valid and has commercial worth, the key times to buy if you want to maximize gains are either very early on for more risk-taking investors, or during the trough as early expectations are corrected.
If you are a more conservative investor then the theory suggests that it is probably worth waiting for the plateau as by this stage the tech is well proven.
Note: It’s important to remember the hype cycle wasn’t developed specifically to look at company share prices. For the purposes of this newsletter we are assuming the underlying principles can easily be applied to an investing application, especially if you consider share price to be a reflection of “Visibility”, or investor expectations.
You can read more about the original concept from Gartner themselves here, or from various other sources like this.
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