Finding Google at 35,000 Feet, Casey Research

Finding Google
at 35,000 Feet
By David Galland

Dear Investor,

While Doug Casey and I have long had an interest in technology - and the extraordinary returns tech can offer - we're smart enough to know that investing in technology requires truly specialized knowledge.

To succeed you need to...

First, be right about which technology will ultimately dominate over competitive technologies, and then...
Be right again about which companies with the winning technology have the right stuff to win the dog fight for market dominance.

Put another way, over the years a lot of companies have launched search engines, but there's only one Google.

Of course, if you find "Google" early on, the returns can be life-changing. Which is what makes the sector so intriguing.

But make no mistake, finding the next Google requires a remarkable depth of scientific knowledge, as well as top-level connections with industry insiders to tip you to the up-and-comers before they break onto the public scene.

And there's one more thing...

Because we are ultimately talking about parlaying tech industry knowledge into winning investments, it is also essential that you possess a proven ability at doing hard-headed, fundamental analysis that allows you to separate the money pits from the potential rocket shots.

No small order.

Which explains why, despite spending years attempting to assemble a team to "do tech investing right," my partner Doug Casey and I have never been able to find the right person to lead the effort.

Opportunity at 35,000 Feet

I've long believed that opportunity knocks pretty much every day... but that most people are so busy with the details of life, they miss the cues.

That belief is why I try to have a conversation with everyone I come into even casual contact with. In addition to making new friends and hearing all sorts of fascinating life experiences, every so often a real gem falls into my lap.

And so it was that I met Alex Daley on a six-hour coast-to-coast trip last December - a man whose background in technology and technology investing runs so deep that he's on a first-name basis with Bill Gates.

To make a six-hour story short, once we started talking, we kept at it pretty much constantly for the duration of the flight.

He asked me about our firm, Casey Research, and I asked him about his work as one of the top strategists at one of the world's largest technology firms. And I asked him pretty much every question I could think to ask about technology as an investment.

He knew the answers. All the answers.

By the end of the flight, two things had happened.

First and most important, a friendship had been formed.

Second, over the course of our conversation, I began to get a subtle signal that he might actually be interested in taking on the task of running Extraordinary Technology, the name we trademarked two years ago in anticipation of eventually finding the right person to head-up the team.

Following our flight, I had no doubt that he was the right guy, but still...

...what chance did we actually have of recruiting him to lead our tech team?

After all, Alex is at the very peak of his career at the leading edge of the tech industry. He's one of the guys that do speeches for the TED conference and has been regularly sought out for interviews on breaking technology stories by CNN, CNBC, CBS World News, and BBC, among many others.

Given his experience and elevated position in the high-octane tech industry, I would have been the first to say that the odds of his agreeing to join the Casey Research team were slim to none... with slim edging toward the exit.

Even so, perhaps because of the number of questions he asked me about Casey Research and our investment outlook, I remember thinking to myself at the time, "Could he be the guy? No way. But could he be?"

What I Didn't Know at the Time

After attending one of our conferences in Las Vegas where he met subscribers and other members of the Casey team, Alex made it official - he wanted to take on Extraordinary Technology.

It was only then that I learned why.

First and foremost, in addition to a fanatical interest in technology, AAlex has an equal passion for investing. Tellingly, his dual university degrees are in Computer Science and Economics. And he loves to write.

As a result, when he heard about the work we do here at Casey Research and he began to understand that he might be able to pursue his three passions in a single enterprise, it seemed a dream come true.

To say that we're ecstatic that Alex will be heading up Casey's Extraordinary Technology would be a major understatement; I am completely confident that this is going to be the single best advisory service in the important tech area.

I'll have more on why tech is important in a moment, but as my own passion for writing can cause me to get carried away, and I don't want to go on overly long, let me spend just a moment talking about some of Alex's documented investment wins, as they'll give you a sense of his strengths in that area.

A minute ago, I discussed the difficulty of finding Google.

Well, Alex found Google - buying his shares at the 2004 IPO for $85 and riding them up to $638.25 in 2008, when he sold to lock in his 650% four-year gain.
And he found NVIDIA, the graphics software maker, when it was trading for $7.77, and sold it at $23.68 for a three-year 204% gain.
He took a big bite of Apple USA ahead of its stunning rebirth, buying his shares for $23.95 in 2000 and now sitting on a 591% gain.
And for reasons he explains in the inaugural edition of Casey's Extraordinary Technology, in March he bought shares in Sierra Wireless and has already been rewarded with a 4 1/2-month 167% gain... with much more to come.

As importantly, Alex's encyclopedic knowledge of the technology industry (and I don't use that phrase loosely) allows him to spot the dead ducks walking, those companies headed for a technological or business-related wall.

That allowed him to short Corel in the fall of 2008 for a quick 57% three-month gain and pick up a quick five-month 46% gain shorting Novell last May.

Not to put too fine a point on it, investing in technology without Alex at your side is like throwing darts at a rubber wall in the dark. With him on your team, it's a lot like shooting fish in a barrel. You may not hit them all, but your odds are massively improved.

Hi David,
FYI... just made my subscription fees... flipped my Sierra Wireless shares and made a nice 28% in what a bit over 2 weeks? Nice start to this newsletter & kudos to the author!

(Above text is, word for word, an unsolicited email we received from a paid-up subscriber.)

Why Technology Is Critical to America... and Your Portfolio

Some of those of you who live in the U.S. may not want to hear what I'm about to say.

For reasons of expediency, over the last couple of decades the United States of America has effectively outsourced its manufacturing and heavy industry overseas.

While the reasons for doing so seemed to make sense at the time, the muscular manufacturing that helped make the U.S. such a global economic powerhouse is now a pale shadow of its former self.

Into the economic breach stepped the giant financial services institutions whose spreadsheet-driven derivatives allowed the financial sector to grow to the point that in 2005 it made up an unprecedented 20% of U.S. equity markets.

Unfortunately, as we all now know, the derivatives and similar innovations were built on a foundation of sand that has crumbled, contributing considerably to the financial crisis gripping the world today.

All of which begs the question, "With U.S. manufacturing and financial services flat on their backs and likely down for the count for years to come, what sector offers the most hope for leading the U.S. back out of the economic depths?"

The answer, simply, is technology - the inventive, creative, world-changing sector in which America has always had a leading edge.

Sure, the Chinese may make a few yuan manufacturing commoditized mobile phone hand-sets, but the vast majority of technological breakthroughs and high-margin software that consumers can't get enough of have American origins.

(Chart Note: with the failure of financial services, technology as a standalone sector is again the largest component of the S&P 500. But when you take into account the critical role that tech plays in many other sectors - telecommunications, health care, utilities, etc. - it is the largest component by a very, very wide margin.)

But That Is the Tip of a Very Large Iceberg...

Hard technology - as opposed to the iconic jokes of the ".com" bubble - literally drives the world.

It increasingly provides the backbone for everything from health care to service industries, to manufacturing, to energy, to, well... pretty much everything.

And while there are thousands of discretionary and entertaining consumer-oriented technological applications, there are also thousands of efficiency-enhancing business applications that provide desperately needed solutions in a world where every dollar counts.

Take, for instance, "machine to machine wireless" (M2M) devices, a topic covered in the inaugural edition of Casey's Extraordinary Technology. You may never have heard about them, and most people haven't, but they are everywhere. Quoting Alex...

"... by the end of 2010 it is projected that there will be 10,000 Internet-connected machines for every person connected to the net. And researchers from The Focal Point Group project that machine to machine (M2M) wireless communications will extend to trillions of devices over the next few years! An increasing number of these devices are remote, mobile, microscopic, or otherwise impractical to connect using wires, and thus the demand for wireless M2M connectivity is rapidly increasing. In particular, M2M over cellular networks."

“An American renewal must be built on technology. We must make a serious national commitment to improve our manufacturing infrastructure and increase exports. We need to dispel the myth that American consumer spending can lead our recovery. Instead, we need to draw on 230 years of ingenuity to renew the country's dedication to innovation, new technologies and productivity.”

Jeff Immelt,
Financial Times, June 8, 2009

Whether automatically reporting on inventory levels in coin-operated soda machines scattered across a territory, or monitoring the water content of dirt for farm sprinkler systems, or any of thousands of other applications - M2M technology is catching on like wildfire. Growth is estimated to compound at a staggering 40% annual rate for years into the future.

And remember, this technology doesn't require an economic recovery to be a big winner; its best and highest purpose is to help companies cut costs and increase efficiency.

That's why tech companies with the right stuff are able to do a lot better than just buck the trend of a struggling global economy. Case in point... here's a list of just some of the tech winners during the challenging markets of 2008/2009 (note: over the same period of time, the S&P 500 returned -28%).

STEC, Inc. - Flash memory chip maker, whose products are used in cell phones, desktop PCs, etc. has seen a huge boost from Solid State Drives - the new, expensive hard drives with no moving parts, lightning-fast speed, and much less power consumption. They are stealing market share from Seagate and others by remaking the market; the economy matters little to them. Up 350%+ in just the last 6 months.
3COM - They are a low-cost provider of networking equipment, making a comeback of sorts stealing market share from Cisco in tough times and business from now bankrupt rivals like Nortel. Their ability to "Outwit, Outlast" the competition has seen their stock resurging 120%+ over the last 12 months.
INOD - They do the mundane task of scanning paper documents into electronic records overseas, but it is a complex technological operation helping to make hospitals and law offices more efficient and save money. As hospitals especially get interested in cost savings and migrating to digital health records, INOD has benefited. Up 120% over 6 months.
Synnex Corp - A business process services company, provides services in distribution, contract assembly, and global business services designed to improve efficiency. 2009 performance to July 1, up $138.7%.
QSII - Another top digital health records system provider; they have and will continue to see a boost in business as healthcare goes digital, especially in the U.S. with the Obama cost savings mandates. Investors earned 76% over the past 12 months.

It is just this sort of gains Alex is targeting in the pages of Casey's Extraordinary Technology. But there is much more to this service than the comprehensive monthly letter that tells you exactly what you need to know to make big profits in tech.

Introducing...
Extraordinary Technology Alerts

In our discussions about how to make Casey's Extraordinary Technology the best tech advisory service on the planet, a lofty goal, but the only way either Casey Research or Alex would want our names associated with it - we quickly concluded that an additional feature was required.

While a monthly report provides the perfect medium for sharing the latest analysis and in-depth research on emerging tech opportunities, the monthly schedule risks missing out on the special opportunities that arise so frequently in the world of tech.

A scientific breakthrough...
A sudden move by an important industry insider...
An unexpected and unwarranted setback in the stock price of an exceptional company (creating a short-term window to buy on the cheap)...
A "killer application" emerging with the potential to wreak havoc across a particular tech sector...
An announcement of a strategic combination between tech companies that creates opportunities (and risks)...
A growing buzz among the cognoscenti that something big's about to happen...

... these and other "in the moment" opportunities can make all the difference between getting in on the ground floor... or reading about the killing made by fast movers.

And so, in addition to the monthly report, Casey's Extraordinary Technology includes an Alert service that rushes you the actionable information you need when it will do you the most good - before the crowd.

Adding this intense "real time" level of service is no simple thing. To be effective, Alex and his team have to literally operate an early-warning system designed to keep ahead of breaking news... monitoring reams of industry reports as they are released and, most importantly, keeping in very close contact with Alex's deep network of tech insiders.

These Alerts are not published on any fixed schedule, but rather only when there's something important in the works that Alex thinks you absolutely must pay attention to. In some months there may only be a few Alerts issued, in others, as many as a dozen: it all depends on the number of breaking opportunities uncovered (or, in the case of existing recommendations, important updates).

Taken together, the monthly report and the interim Alerts give you an incredible leg up on other technology investors. While they grope around in the dark or look to mainstream financial media for the latest hot tip, you'll be plugged in at the source of the hard information on what's really going on in technology and the best ways to profit.

Don't Take Our Word for It - Take Our No-Risk Trial Subscription Offer

As you might sense, Doug Casey and I feel something akin to proud new parents about Casey's Extraordinary Technology.

We can't wait to introduce you to Alex -- I'm 100% sure you'll find what he has to say just as fascinating and valuable as I did on that first flight, and in all of our discussions since.

But there's more to it than that.

I'm sincerely convinced that Casey's Extraordinary Technology belongs in the "intelligence portfolio" of every serious investor. The sector is simply too big, too important to ignore.
Month after month, it gives you a fascinating and profitable insider look behind the curtain of the exciting and vibrant world of tech - enriching, educating, informing, and even entertaining you with the latest on technology and the many investment opportunities that spin out of the sector.

(And, mostly just because it's interesting, each issue also includes a fun look at the really early-stage stuff that promises to revolutionize the world we live in.)

As I said at the beginning of this letter, successful technology investing requires serious expertise. With Alex at your side, you don't have to go it alone - quite the contrary; you'll benefit from the confident guiding hand of one of the world's most informed technology insiders. And not some ivory tower academic but a deeply experienced and passionate technology investor with a long record of spotting the tech winners early on.

But don't take our word for it. Instead, take us up on our no-risk, 3-month, 100% guaranteed trial subscription offer...

With our no-risk trial subscription offer, starting immediately, you'll plug into the most rarified levels of the big, wide world of technology and technology investing, to a degree that was, until now, simply unavailable to 99% of investors (and the ones who are able to tap into this level of expertise - tech fund managers and the mega-rich - pay exponentially more for their consultants and tech intelligence than you will as a subscriber). Use it for 90 days and if you decide it's not everything I've promised, we'll give you all of your money back. No questions asked.

We make this guaranteed offer because, as with all of our Casey Research services, it's not our intention to have you subscribe to a service that's not exactly what you‘re looking for.

I realize I may have built rather high expectations for Casey's Extraordinary Technology, but I have done so only because I have now spent many hours in Alex's company and in poring through his research and analysis.

I want to give you that same opportunity - as a subscriber to this exciting and important new service. And to do so in a way that requires you accepting absolutely no risk.

Casey's Extraordinary Technology

Extraordinary Technology Alerts

That's three full months for you to get to know Alex and his work... to experience tech as you've never experienced it - from the inside looking out - and to watch how our investment recommendations in this exciting sector perform.

And, as per above, if at any point during the period, for any reason, you decide that the service isn't everything I say it is, simply request a refund and it will be given to you without questions, hesitation, or reservation.

Simple and straightforward. You like it or all your money back.

You have nothing but a few minutes of your time to lose; so I sincerely hope you don't hesitate to take us up on this trial offer for Casey's Extraordinary Technology. It is a decision I am sure you won't regret.

In fact, it could turn out to be the best investment decision you'll make this year.

Click here now to receive your fully guaranteed trial subscription to Casey's Extraordinary Technology...
and to immediately access the current edition.

I look forward to welcoming you to the family of subscribers for this extraordinary new service.

Warm Regards,

David Galland
Managing Director
Casey Research