| Jul 31, 2021 Hi Savio, Let me reintroduce myself. My name is Luke Lango, and I’m the new lead analyst of Early Stage Investor. If you haven’t already, I strongly encourage you to watch the introduction video that I filmed last week with InvestorPlace CEO Brian Hunt, in which we discussed the stock market, shared our outlook for multiple hypergrowth megatrends, and even revealed a new self-driving stock pick – Stem (STEM) – in a brand-new special report that you can find here. Quick refresher on myself for folks who are interested: I’m a tech entrepreneur and venture capitalist from California. I got my start studying economics at Caltech – which, when I was there, was rated the world’s number one university. While at Caltech, I linked up with venture capitalists in Los Angeles, started three different technology businesses, and made a name for myself as a technologist with a thirst for disruptive innovation – all before I was 23. Subsequently, I was looped into the finance game when I learned that I could share my often-unique and always-bold vision for the future of our world with a broader audience and help millions of people make money the same way I did – by investing in that future. That’s when I linked up with InvestorPlace, and launched and ran multiple research advisories just like Early Stage Investor. Those research advisories featured multiple 10X stock picks like NIO (NIO), Plug Power (PLUG), and MindMed (MNMD) – all in just one year. They also featured six different crypto picks that soared 500% or more, including Chainlink (LINK) for a 1,138% gain and Synthetic Network Token (SNX) for a 2,865% gain. Those picks helped me earn the ranking of the world’s #1 stock picker in 2020, according to TipRanks. Now, let me be clear: While I may be a new face, the core investment philosophy and theme of Early Stage Investor has not changed, nor will it ever change under my charge. That is, Early Stage Investor was founded on the core ideology that we are on the cusp of a seismic shift in society, wherein the convergence of 5G, artificial intelligence (AI), blockchain, cloud computing, and more will give birth to multiple disruptive technology platforms that will inevitably transform our world over the next decade – and fundamentally change how we eat, sleep, travel, play, work, and more. Of course, the founding premise of Early Stage Investor was that where there’s disruption, there’s opportunity – and that the next decade presents the most compelling opportunity ever to create generational wealth in the stock market by investing in these world-changing technologies. I fundamentally agree with all of that. More accurately, we fundamentally agree with all of that. You see… I’m not alone here. I’ve recruited a team of tech experts to help me run Early Stage Investor because, as the old saying goes, many brains are greater than one brain (or, as we used to say in college basketball practices, “teamwork makes the dream work”). The team is four people. You have myself – who has been credited with nearly 20 10X stock picks – and two fellow Caltech grads, plus another seasoned tech entrepreneur. One of the Caltech grads is a physics major and data scientist by training, who previously created AI-powered recommendation algorithms at Warner Bros, and got perfect scores on his SAT. He’s one of the smartest people I’ve ever met, and someone who understands – better than anyone I know – the software infrastructure underlying today’s most disruptive tech platforms, like Netflix and Amazon. The other Caltech grad is a programmer by training, who also understands software at a level only very few people do. Plus, he was one of the first folks to sign up for crypto exchange Coinbase back in 2013, and spends his spare time creating digital assets – or NFTs (non-fungible tokens) – on the WAX blockchain. The final person on our team is someone I’ve worked closely with before in the startup world, and whom I couldn’t speak more highly of. He’s a University of California Santa Barbara graduate who helped me start a successful financial research business back in 2013 and subsequently co-founded a social media business with me. Together, we raised money from some of the biggest venture capital (VC) firms in California. Before joining us, he was coding the software platforms at TurboTax that help you do your taxes every year. Make no mistake. This is a crazy talented team. In fact, I’d venture to say there is no greater collection of intellectual firepower in the financial research world – and we’re dedicating all of that firepower to help you discover the next best hypergrowth opportunities right here, in Early Stage Investor. Now, let me be clear here. With all this firepower, my team and I don’t just want to continue to give you an excellent experience through Early Stage Investor – rather, our goal is to elevate your experience to a whole new level. We’re talking more great picks. More consistent updates. More research. More analysis. More of everything. A big part of this “upgrade” to your service includes Weekly Updates. We will send to you, every Saturday, an update on the status of the stock market, which will include commentary on recent developments in the hypergrowth megatrends we follow, and updates on the holdings in our portfolio when there is news to report and analyze. These Weekly Updates will not replace our Monthly Issues. You will continue to receive in-depth, robust issues from us every single month. Weekly Updates will be entirely supplemental to that, so every month, you will now receive one Monthly Issue and four or five Weekly Updates from us. In other words, you’re going to get 5X the volume of analysis and commentary than before. If that’s not an upgrade, I don’t know what is. We hope you enjoy this service upgrade, and as a result, glean more insights, knowledge, and profits than ever before. With that in mind, let’s dive right into the first Weekly Update. –––– It was a solid week in the stock market, and a solid week for our portfolio, thanks to a flurry of strong earnings reports, and reassurance that monetary policy will remain accommodative. However, gains in our portfolio were capped by concerns surrounding renewed spread of Covid-19 as well as fears with respect to China’s regulatory crackdown. We see such fears as temporary and overblown – and therefore, smell a few great buying opportunities in the market. On the positive side, pretty much everyone is crushing earnings estimates this quarter, and for the right reasons. Alphabet and Facebook reported great earnings highlighting the current spending boom in digital advertising. Microsoft smashed estimates thanks to surging cloud spend. Visa topped estimates, too, thanks to a rise in non-cash spending across the globe. Shopify did as well, on the back of a continued uptick in e-commerce sales. Apple crushed estimates, too. These earnings broadly underscore that the current economic recovery remains on solid footing, and that a lot of the growth in the economy is happening in the technology sectors – after a weird three-month stretch in April, May, and June wherein consumers ditched e-commerce, streaming TV, and social media platforms for “old school” malls and movie theaters. With the reopening now having come and gone, consumer time and spending is re-concentrating back on the digital platforms that make our lives faster, easier, cheaper, and just plain better. As this re-concentration accelerates in the coming months, we expect the tech sector to lead on Wall Street. Meanwhile, also on the positive side, the Fed sounded a very dovish tone in its press release and conference on Wednesday, reassuring investors that accommodative monetary policy will remain in-place for the foreseeable future. The very next day, we received a flurry of bad economic data reports – a big Q2 GDP miss, rising jobless claims, and falling home sales – which Wall Street actually reacted to positively, because the sum of those reports confirmed that the Fed should (and will) stay on the sidelines. The wall of liquidity upon which the stock market is propped up today will stay in place. On the negative side, however, stocks tied to the reopening did lose some momentum as Covid-19 cases are now rising in every single state, and as some companies have pushed back return-to-the-office dates and some counties have re-instituted indoor face mask mandates. We view the economic risk of these restrictions as small, since the world has clearly learned how to adapt to the virus – regardless of if nothing is open, or everything is open – and actually think that sporadic lockdowns could create a tailwind for our portfolio through increased adoption of digital platforms. The bigger risk to our portfolio, in our opinion, is what’s going on over in China. For years, China has talked about bringing the regulatory hammer down on its tech companies. But they’ve never followed that talk up with any walk – until now. Last week, China basically dismantled its entire $100 billion online education sector in an attempt to reverse the country’s declining birth rate. Now that China is walking the walk on regulation, we’re watching to see if that uncertainty surrounding the course of action of the Chinese government over the next few months will weigh on all Chinese stocks, including the ones we own. However, we take confidence in the fact that we do not believe the Chinese stocks we own will be significantly or permanently damaged by regulatory action, as China still needs its tech sector to thrive in order for the country to maintain its global economic positioning, and the companies we’re invested in will help China do just that. So, in our opinion, what we’re dealing with here are optical risks, not fundamental risks, and therefore, they shall pass. Overall, we believe the fundamentals underlying our portfolio are very healthy. We see the stock market continuing to power higher in the coming months – and see our stocks as being in a great position to lead that rally. With that in mind, let’s jump into our Weekly Portfolio Updates: - CRISPR Therapeutics (CRSP) reported great earnings on Thursday that underscore the long-term bull thesis. On Thursday, CRISPR Therapeutics smashed revenue and earnings estimates in its Q2 report, and provided favorable updates on its development pipeline. Momentum is really building in the gene-editing space, following the first successful in-vitro gene edit ever from Intellia (a big winner here in Early Stage Investor), and we think CRISPR stock has really strong upside potential in the coming months and years as the company’s promising drug pipeline births multiple game-changing therapies.
- Strong earnings from Veracyte (VCYT) boost the bull thesis further. Also on Thursday, Veracyte reported great earnings that included 166% revenue growth. The company simultaneously advanced its clinical evidence, pipeline, and global growth strategy, and raised total revenue guidance for 2021. It looks like everything is trending in the right direction here, and we’re bullish that this stock can stage a big comeback into the end of the year.
- Riot Blockchain (RIOT) catches a ride on the “Bitcoin Breakout.” All Bitcoin- and crypto-related stocks had a big week, as Bitcoin prices – boosted by rumors that Amazon will start accepting the crypto as payment on its platform – soared from $30,000 to over $40,000 in a matter of a few trading days. We aren’t convinced that this is the big breakout in Bitcoin. It could be just another head fake. Regardless, we are very bullish on the fact that this current consolidation period in cryptos will end with Bitcoin and the entire market taking a huge, permanent leg higher – which will, of course, result in a breakout in our crypto-related stocks like Riot Blockchain.
- Cannabis stocks – like Organigram (OGI) – catch a ride higher after Tilray’s blowout earnings. One of Canada’s leading cannabis companies, Tilray, reported very strong earnings this week, and that lit a fire under cannabis stocks (many of which we own, like Organigram). Remember: cannabis stocks have been crushed recently thanks to the U.S. failing to pass legislation that would have federally legalized weed. But Tilray’s earnings prove that cannabis companies don’t need weed to be federally legal in the U.S. to support impressive growth rates. They simply need to keep converting black market demand into legal demand in countries and states where weed is legal – and that is happening. Broadly, we think the recent drawdown in cannabis stocks is a great buying opportunity.
- Impinj (PI) stock breaks out after a strong Q2 earnings report. Impinj stock moved higher this week after the company delivered a double-beat-and-raise third-quarter earnings report, which included 79% revenue growth and a surprise non-GAAP profit. We believe the results broadly underscore that Impinj is winning big in the Internet-of-Things (IoT) revolution, and that the stock remains a great long-term play on the fact that smart devices are going to be everywhere within the next few years. The stock has struggled in recent months, but we believe a big comeback is on the horizon.
Have a great week. We’ll be back in touch next Saturday with your second Weekly Update, and we’ll always get in contact right away if anything urgent comes up in the meantime. Sincerely, 
Luke Lango
Editor, Early Stage Investor
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