Investors need to look past big names to find generational opportunities

Investors need to look past big names to find generational opportunities

Big banks rolling out fourth quarter earnings and kick off the earnings season, which is a much-needed market distraction from the churn of inflation worries.

Financials have gotten lots of love recently - the Invesco KBW BankETF KBWB is up 11% so far in 2022, against a 6% drop for the Invesco QQQ Trust, which mirrors the Nasdaq-100, as investors adjust to the prospect of higher interest rates.

Tech took another hard hit Thursday, but our call was from Michael Loukas, principal CEO of TrueMark Investments, who said investors need to look past the big names to offer generational opportunities. He said that the job is to find the category killers that are going through their hyper growth phase and years from now they will be household names.

TrueMark is the issuer of TrueShares Technology, AI Deep Learning ETF LRNZ, which launched in March 2020, just as the COVID 19 pandemic was beginning to take hold. Since its inception, theETF has gone up more than 60%, as it also held a lot of tech-related stocks that were favored in the early days of the epidemic.

According to MarketWatch in late December, Loukas said the actively managedETF has seen some volatility, as he noted it often gets lumped in with the ARKs of the world, referring to innovation and disruptive funds run by ARK Investment s Cathie Wood. Her flagship ARK Innovation ETF ARKK and the TrueShares AI fund are down about 15% year to date. The ARK fund has lost 40% of its value over the past 12 months.

Loukas said the TrueShares ETF is less sector-specific, focusing on everything from cyber to biotech. The fund's stock picks are about uses and applications that tend to be in demand on an everyday basis in all industries then broadening out, he said.

The global economy is still only 10% or 15% into cloud migration, which Loukas describes as an irreversible train. As we continue to work through that transition in the economy, you'll still see major runway for a lot of the secular growth companies that use AI as a competitive advantage, he said.

He picked up a company last year, UiPath PATH, which makes robotic process automation software. He explained that UiPath allows those who don't code to automate processes and underlying bots that will make their days and workflows more efficient.

He said that he thinks that a great example of deep learning of AI application that is going to affect the mainstream in the future, not just the corporate offices of a cybersecurity company.

Another in the ETF's portfolio is Unity Software U, which Loukas described as a leader in virtual and augmented reality, a space it shares equally with the virtual gamer Roblox RBLX, another of the fund's investments.

His software has begun to permeate those types of everyday applications for virtual reality and augmented reality in 3D, because Unity Software has spread out into different industries, whether it be construction, architecture, medical or construction.

So that is another great company that has just oodles of runway in front of it, and an example of one he looks for that brings good software outside the traditional tech realm.

Cloud security is something he thinks investors should look at, and isn't talked about nearly enough as most industries and companies are looking to migrate to cloud technology. That brings him to two more holdings, the CrowdStrike CRWD and Zscaler ZS, both of which have made huge inroads into cloud security from two different perspectives, endpoint devices for CrowdStrike and enterprise traffic on Zscaler. He said that they are both good companies with good accelerating fundamentals and have huge runway in front of them.

Banks are kicking off fourth-quarter results, with JPMorgan JPM reporting a loss and a beat from Wells Fargo WFC, Citigroup C, and BlackRock BLK, and First Republic FRC.

Doge coin DOGEUSD is soaring after Tesla TSLA, CEO Elon Musk said some merchandise - Cyberwhistle, Cyberquad it appears - can now be purchased with Doge coin. The initial production of its Cybertruck is expected to start early next year, according to the company.

Cathie Woods ARK Invest has purchased shares of SPAC Concord Acquisition CND, which is merging with Circle, one of the biggest stable coin companies in the world of criptocurrencies.

President Joe Biden has reportedly tapped three Democrats to join the Federal Reserve, with Sarah Bloom Raskin expected to serve as top banking regulator, and Lisa Cook and Philip Jefferson headed for the central bank's Board of Governors.

A busy week in data ends with December retail sales and import price, industrial production, the University of Michigan consumer sentiment index, business inventories, and a speech from New York Fed President John Williams.

A record trade surplus in 2021 was lifted by surging exports, according to data from China.

The stock futures ES 00, YM 00, NQ 00 are struggling for positive ground, with bond yields inching higher and the dollar falling. Asian 000300, NIK and European stocks SXXP fell after Wall Street lost its value on Thursday.

A 97-year old former child prodigy is about to release a new album.

Dutch royals will stop using a golden coach linked to the country's colonial past.

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