The next tech giant. Why $HOOD, $PLTR and $DKNG are the investment opportunities of a lifetime. (Part 1)

I believe the story of the last 20 years of stock market is that one tech startup can disrupt an entire sector and join the tech giant club. For many sectors, information is king and turns out a company with a few 1000 people who have studied the science of information can outperform millions of people who aren't so scientifically rigorous. Now some sectors are not so prone to be disrupted by these information science experts. And if you asked me 20 years ago which sectors will be disrupted in what order, I would've guessed wrong.

$AMZN Turns out the value of millions of retail stores across the west was not in their inventory, their brand or their location. Amazon proved their value was in knowing who wants what item when and where. Information. How can millions of retail shop compete with amazon when they already have my payment information (how) my location (where) and all amazon has to figure out is what do I want, which I'm happy to tell them by typing one word or expression in a search bar instead of walking around Home Depot trying to find a employee who's not too busy and has every reason to avoid me. Sentences and social interactions just can't compete with 1s and 0s. Now I wish I figured this all out 20 years ago when amazon still a great investment opportunity, but how could I have known Jeff would overcome all the hurdles by building this impossible network of warehouses and delivery. I won't make the same mistake twice.

$NFLX (movies). $SPOT (music) $GOOG,$META(ads, communication, media), $AAPL, $MSFT etc... These are 100% information sectors that I would've guessed would be disrupted. But these were winner takes all. How could I know Facebook wouldn't fail like MySpace and Friendster? That iphones would be better than blackberry and nokia? How could I know Yahoo would become a total failure when they had such a commanding lead in the early internet era. These stocks will keep going up but they're not the 100 baggers they once were.

And so in true wsb fashion, the question becomes, what tech startup is poised to do the same thing to their respective sector. Let's assume no company can be worth over $5T in the next 10 years. We need a company worth less than $50B whose sector is still ripe for the taking, and whose in the business of information. A sector whose legal hurdles have kept the incumbents safe from the efficiency of tech startups. A sector who created legal barriers that could resist a decade longer than taxi drivers could resist $Uber, or hotels vs $ABNB.

There are 3 answers : Finance, defense and gambling. These sectors have the highest barrier to entry of any. Their regulatory agencies are basically just a revolving door between government and industry. They are the most regulated sectors out there but they are finally starting to crack. Crony capitalism only works for so long.

From a pure computer science perspective, overtaking these sectors is not technical challenge, in the same way Unity is failing at becoming the universal game engine. There's no legal barrier to become a game engine. Activison, Take two interactive, Ubisoft, etc.. everyone wants $U to succeed but they're now years behind on their promised revolutionary Data oriented technology stack. Everyone wants $TSLA Full self driving to succeed, but they're years behind Musk's first promises of success by what? 2017?. But those are technically hard challenges, maybe impossible with current hardware limitations. Now if you want to bet on their success, good luck to you but I'm not interested in those investments. Only someone at the cutting-edge of those technologies can make well-informed decisions. Only someone at the cutting-edge of semi conducters could've guessed $NVDA would obliterate intel and amd. I won't pretend to have any such knowledge about the future as I make these observations about the past. This is not what this tech investment thesis is about.

And so in conclusion, three stocks stand out in their positioning and the state of their respective industry :

If you are under 40 years old, $HOOD (Finance), $PLTR (Defense) and $DKNG (gambling) will 100x during your investment horizon. Part 2 tomorrow as I dive deeper on all 3.