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CVS vs. Silicon Valley

CVS vs. Silicon Valley
The future of healthcare is a high-stakes mystery to solve. For our collective health, of course, but investors are also asking this $7+ trillion question:

Who will win the race to complete vertical integration? 
 
The future of healthcare is a high-stakes mystery to solve. For our collective health, of course, but investors are also asking this $7+ trillion question:

Who will win the race to complete vertical integration? 

The software developers, the hospitals, or the pharmacies themselves?

It’s a war out there. 

In 2018, VCs invested $10 Billion into “Virtual Healthcare” software in an attempt to make both pharmacies and hospitals veritably obsolete. In this case: you take your medical tests at home, talk to a doctor on a video chat re: your results, and then your meds are sent in the mail. 

CVS just completed a $69 Billion merger Aetna (insurance) to open up 1,500 “HealthHubs” at their in-store locations. In this case: your CVS branded insurance will get you access to CVS hospitals, where you then conveniently pick up your prescriptions while there. 

These are opposite ends of the spectrum. And there are millions of in-between scenarios. 

Though no matter HOW, modern healthcare WILL change. It’s inevitable. There are too many inefficiencies. 

Either way, the result will be good for consumers…

High-Stakes + Competition = Innovation = Superior Products. 

We’ll keep you updated as the war rages on. 

Stay Strong,
Tai Lopez
President, Schweitzer Alexander

P.S. If you’d like to talk more about investing with Schweitzer Alexander:
Go here to schedule a call

 
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Watch out Netflix, Mickey's coming...

Watch out Netflix, Mickey's coming...
Things aren’t looking great for Netflix (the video-streaming service with 148 million paid subscribers) lately.

They’re losing:Disney Movies
The Office
Friends…
…AND US subscribers.
Not good.

For the past decade, it did well by positioning itself as the basic cable of streaming.

The price of HBO was like fancy night out, whereas Netflix was meatloaf and potatoes at home.

Though now with Amazon, AT&T, and Apple coming out with their own streaming services as a FREE add-on… Netflix is right to worry. 

And what’s even worse news than that?

 
Things aren’t looking great for Netflix (the video-streaming service with 148 million paid subscribers) lately.

They’re losing:
  1. Disney Movies
  2. The Office
  3. Friends…
  4. …AND US subscribers.

Not good.

For the past decade, it did well by positioning itself as the basic cable of streaming.

The price of HBO was like fancy night out, whereas Netflix was meatloaf and potatoes at home.

Though now with Amazon, AT&T, and Apple coming out with their own streaming services as a FREE add-on… Netflix is right to worry. 

And what’s even worse news than that?

Disney...

For the same price as Netflix, Disney will offer a streaming subscription that gives you their channel with HULU and ESPN+ included.

This is a classic case of revenue diversification.

With Disney’s hundreds of ways to make money beyond their streaming service, they don’t need a Silicon Valley runway to play the long game. 

So what’s the lesson here? 

“Disruptive” businesses that do not build adequate moats (barriers that prevent competition from entering their market)… will inevitably have to battle with the lumbering, albeit powerful giants. 

And often — they’ll lose. 

We’re not necessarily thumbs down on Netflix. They’re throwing $15B this year into producing their own content —and that may very well work. But Netflix is no longer a sure win. 

Keep an eye out for Disney. 

They’ve breached the moat, and there’s going to be a war. 

Stay Strong,
Tai Lopez
President, Schweitzer Alexander

 
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Fake Meat: Fraud or Fortune?

Fake Meat: Fraud or Fortune?
Vegan and lab-grown “meats” are getting a ton of buzz these days.

One of the first brands to go public is Beyond Meat. Since it’s recent IPO in May, its price has shot up 400%. 

That’s great news for investors who got in at the beginning. 

And it’s possible that plant-based meat alternatives may become even more popular over time. 

Analysts at Barclays estimate the fake-meat market could grow by 1,000% over the next 10 years, reaching $140 billion.

While these “fake meat stocks” may seem like a good investment now, here’s why it’s risky in the long term: the stock prices follow the same pattern Warren Buffett attributes to a bubble:
 
Vegan and lab-grown “meats” are getting a ton of buzz these days.

One of the first brands to go public is Beyond Meat. Since it’s recent IPO in May, its price has shot up 400%. 

That’s great news for investors who got in at the beginning. 

And it’s possible that plant-based meat alternatives may become even more popular over time. 

Analysts at Barclays estimate the fake-meat market could grow by 1,000% over the next 10 years, reaching $140 billion.

While these “fake meat stocks” may seem like a good investment now, here’s why it’s risky in the long term: the stock prices follow the same pattern Warren Buffett attributes to a bubble:

1. Strong initial story. The premise behind fake meat makes sense. It’s a way for people to fight back against animal cruelty (factory farming) while improving their nutrition (or so they believe) by substituting meat with a plant-based alternative.

This is the story that’s driving up prices in the beginning.

2. Investors take notice. As the prices go up, investors put their money in. This causes the prices to go HIGH and the stock value becomes the new story. People want to invest because of the returns, not the product.

3. Pop goes the bubble. Eventually, people begin to realize how overvalued the product/stock is. By this time, new competition comes in and creates a better product with a stronger story — and sales of the original product tumble.

Now, let’s look at fake meat’s premise: nutritionally superior + better for the environment.

First, let’s talk about fake meat’s nutritional value. Or rather, how questionable it is.

Fake meat is not just processed, it’s ultra-processed. 

The ingredients in a Beyond Burger, for example, include pea protein isolate, expeller-pressed canola oil, refined coconut oil, maltodextrin, and gum Arabic.

Just to name a few. Fake meat burgers also contain an extremely high amount of sodium (350-450g) compared to a regular burger (75g).

Then, there’s the environment factor. The big problem with meat right now is factory farming and how processed it is (think: what they sell at fast food restaurants). 

So that begs the question: Is ultra-processed food the solution? What may seem to be better at first glance may in fact be worse for the environment AND your health. 

There’s another option that’s both practical and reliable for the long term: 

Eating ethically sourced, grass-finished meat that provides you the nutrients you need, tastes amazing, and comes from farms that treat the environment and animals with respect.

Fake meat may continue to grow, though I wouldn’t go all in just yet. 

Stay Strong,
Tai Lopez
President, Schweitzer Alexander

 
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The Extinction of Parking Lots

The Extinction of Parking Lots
The conventional wisdom at the time was that the iPhone was an attempt at disrupting the phone industry. 

Hardly. 

As an example, Uber, the $60 Billion transportation disruptor, wouldn’t have existed without iPhones. 

Investors who see these second order consequences coming around the bend usually win big. So let’s unpack a bit of a thought experiment, shall we?

What if all vehicles go autonomous? What if Uber pivots to a full-subscription model, whereby for a flat fee you push a button on your phone, a driverless car picks you up, and takes you to wherever you want to go twice as fast as before. What ELSE will happen? 

 
The conventional wisdom at the time was that the iPhone was an attempt at disrupting the phone industry. 

Hardly. 

As an example, Uber, the $60 Billion transportation disruptor, wouldn’t have existed without iPhones. 

Investors who see these second order consequences coming around the bend usually win big. So let’s unpack a bit of a thought experiment, shall we?

What if all vehicles go autonomous? What if Uber pivots to a full-subscription model, whereby for a flat fee you push a button on your phone, a driverless car picks you up, and takes you to wherever you want to go twice as fast as before. What ELSE will happen? 

Parking lots, parking structures, gas stations, home garages, car lots, busses, bus stations, and ALL city parking spaces will become obsolete. 

What if that happens?

The cost of real estate in the cities will plunge overnight. 

What if that happens?

It will be easier to start local businesses. 

What if that happens?

There will be more competition from local creators. 

What if that happens?

Needless to say, this rabbit hole is deep, and moreover, is only one of the many we could have explored.

Point? The second and third order consequences of societal-shifting technologies will create new, exciting problems to solve. And the solutions to those problems will be big business. 

It’s one thing to see a trend coming. It’s another entirely to see the trends that that trend will create. 

Stay Strong, 

Tai Lopez
President, Schweitzer Alexander

 
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What’s bigger than a unicorn?

What’s bigger than a unicorn?
Over half of all VC investments lose money. 

Let that sink in. 

HALF of the companies that the smartest and most experienced investors in the world vet, interview, believe in, and then cut checks for...are complete failures. 

And this gaudy statistic isn’t dragged down by a few complete losers at the bottom of the bell-curve. No - even the Sequoias and Bessemers of the world lose half the time. 

So if all VCs generally “win some and lose some,” what separates the best VCs from the average?
 
Over half of all VC investments lose money. 

Let that sink in. 

HALF of the companies that the smartest and most experienced investors in the world vet, interview, believe in, and then cut checks for...are complete failures. 

And this gaudy statistic isn’t dragged down by a few complete losers at the bottom of the bell-curve. No - even the Sequoias and Bessemers of the world lose half the time. 

So if all VCs generally “win some and lose some,” what separates the best VCs from the average?

The size of their wins. 

Great VCs don’t just pick unicorns. They pick GIANT-50X unicorns: Facebook,
Twitter, LinkedIn, Paypal, Uber, etc. 

A whopping 60% of VC gains come from 6% of their investments. The pareto principle is strong in the capital investment game. 

So what does that mean for you as an investor?

Market Cap matters. A lot. 

It also means:

Don’t invest in niche.

Don’t invest in local. 

Instead, think bigger than unicorns. 

Invest in the potential disruptors of entire Trillion Dollar Industries: Transportation, Food, Education, Fashion, Banking, Social Media, etc. 

In short: since you’re guaranteed to lose half the time investing in startups - your winners better be enormous. 

Stay Strong, 
Tai Lopez
President, Schweitzer Alexander

P.S. If you’d like to talk more about investing with Schweitzer Alexander:
Go here to schedule a call. 



 
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Will 5G (faster internet) change ecommerce?

Will 5G (faster internet) change ecommerce?
There’s loads of hype about 5G internet.

With the promise of broadband speeds up to 100 times faster than 4G networks, it’s easy to get sucked into the noise.

So 5G is worth keeping tabs on, of course. 

But considering how many people struggle with getting a stable 4G connection, don’t expect 5G to change the internet overnight.

It’s not like 5G is necessary to start an online business either.

Uber and Airbnb built their billion-dollar companies on 4G networks and apps for smartphones.


 
There’s loads of hype about 5G internet.

With the promise of broadband speeds up to 100 times faster than 4G networks, it’s easy to get sucked into the noise.

So 5G is worth keeping tabs on, of course. 

But considering how many people struggle with getting a stable 4G connection, don’t expect 5G to change the internet overnight.

It’s not like 5G is necessary to start an online business either.

Uber and Airbnb built their billion-dollar companies on 4G networks and apps for smartphones.

At Schweitzer Alexander, we’ve been able to build multiple successful companies and brands without 5G, including Mentorbox — our Netflix for books business with

75,000 monthly paying customers.

Faster internet has its place in certain industries, but you have to think about the everyday consumer too.

Considering 5G may require switching carriers or purchasing a new $1,000+ phone, most people won’t upgrade right away.

So where’s the hype coming from?

Mostly telecom companies.

When you look at how slow their subscriber growth is (around 1%), it makes sense that they’re searching for new ways to earn revenue from their current
subscribers.

Finally, think about 5G and ecommerce....

Faster internet will add more features to the shopping experience, but the core of online business will remain. As long as someone can use the internet to buy and sell goods, there’s money to be made.

Stay Strong,
Tai Lopez
Schweitzer Alexander

P.S. If you’d like to talk about investing in our holding company:
Go here to schedule a call.


 
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