HIGH GROWTH | The BEST Metaverse Stocks for 2022

00:00
and we're back i hope everyone had a
00:02
wonderful new year i haven't checked the
00:03
stock market in a while so let me just
00:05
go ahead and do that
00:17
well i guess i'll see you guys in 2023.
00:20
all kidding aside the end of the year
00:21
always comes with a lot of noise tax
00:23
loss harvesting quarter end and year-end
00:26
reporting holiday obligations new year's
00:28
resolutions and predictions for the year
00:30
ahead awards and retrospectives all
00:33
these things are great at taking our
00:34
eyes off the prize as investors so in
00:37
this episode i wanted to share a clip
00:38
about the metaverse from a year-end
00:40
episode of one of my favorite podcasts
00:42
talk about what it got wrong and follow
00:44
up with some resources that we can keep
00:46
an eye on to separate important
00:48
information from the noise if you're
00:50
interested in learning more about the
00:51
metaverse its applications outside of
00:53
video games and which companies are
00:55
really building its foundation this
00:57
episode is for you your time is valuable
00:59
so let's get right into it starting with
01:01
this clip from episode 60 of the all in
01:04
pod
01:05
my worst trend was the metaverse i think
01:06
it's like the renaming of something
01:08
that's been going on for a long time as
01:09
if it's some new future thing if
01:11
anyone's played fortnite over the last
01:13
six years or five years
01:16
um you know the metaverse has been here
01:18
for a long time and this notion that you
01:20
can kind of
01:21
uh take it and make it something that
01:23
doesn't exist yet and it's all about the
01:24
future and make some stupid video about
01:26
it
01:27
i think is a little bit lost in what's
01:29
already been going on which is people
01:30
find value in digital goods people find
01:32
value in digital levels and badging and
01:35
they find honor and progress in their
01:37
lives
01:39
by accomplishing things in the digital
01:40
universe and they've been doing that
01:41
from minecraft to fortnite uh to other
01:44
places for a long time um
01:46
and it's uh it's it's fascinating to
01:48
watch but the notion that we call this
01:49
thing the metaverse and everyone's
01:50
trying to reclassify it as some future
01:52
singular universe and therefore they can
01:54
own
01:55
that singular universe is is a is a
01:57
pretty misstated and misguided kind of
01:59
concept if you don't know what the all
02:00
in pod is it's one of the best podcasts
02:03
out there for investing information and
02:04
entertainment it's funny smart
02:06
uncensored unmonetized and pretty
02:08
politically unbiased it's basically a
02:10
weekly hangout session and round table
02:13
between chamath pala hapatia jason
02:15
calacanis david sachs and david
02:17
friedberg for guys who really know a lot
02:19
about technology money and the markets
02:22
david friedberg was the guy talking
02:23
about the metaverse in that clip and you
02:25
actually saw the full clip no one
02:27
followed up on friedberg's answer not
02:29
even chamath who spent four years
02:31
working at facebook now meta platforms i
02:33
totally get it it was just a silly end
02:35
of the year award episode they had a lot
02:37
of material they wanted to get through
02:39
and david friedberg is a pretty busy guy
02:41
so it's not like he sat down and racked
02:42
his brain over all the worst trends of
02:44
2021 only to pick the metaverse
02:47
friedberg is actually my favorite person
02:49
on that podcast and i'm not here to bad
02:51
mouth him what i am here to point out is
02:53
that friedberg is highly educated he's
02:55
highly in touch and up to date with
02:57
technology and he's highly successful
02:59
and he's still surprisingly wrong about
03:01
the metaverse the point i'm making here
03:03
is if he's wrong about it just imagine
03:05
how wrong the average stock market
03:07
analyst is or even worse the average
03:09
investor in the stock market
03:11
misunderstanding means opportunity so
03:14
this is my opportunity to help you
03:16
understand what the metaverse is and
03:18
point you to a few great resources
03:20
including an index fund that tracks its
03:22
biggest contributors before that though
03:24
here's a simple definition of the
03:26
metaverse just so we're all on the same
03:28
page the metaverse is the next
03:30
generation of the mobile internet which
03:32
focuses on building a 3d persistent
03:35
interconnected virtual universe if that
03:38
definition makes you cry harder than
03:39
looking at your bloodbath of a portfolio
03:42
don't sweat it let's work through that
03:43
definition together the next generation
03:45
of the mobile internet means the
03:47
metaverse should be accessible from
03:49
anywhere not just computers and
03:51
stationary video game consoles also you
03:53
don't need a virtual reality headset a
03:56
cell phone or a tablet should be able to
03:58
access this digital universe a 3d
04:01
persistent virtual universe is exactly
04:03
what it sounds like unlike web pages and
04:05
images which are two-dimensional objects
04:08
in the metaverse should have a sense of
04:10
presence they should have a sense of
04:11
scale depth appear to be made of some
04:14
material react to lighting appear to
04:16
have weight and so on instead of looking
04:18
at the 3d graphics of a video game on a
04:21
2d monitor you should be able to
04:23
experience people and vehicles and
04:24
bullets actually passing you by as they
04:27
occupy the space around your avatar
04:30
which is your digital twin in this
04:31
virtual universe those objects should
04:34
also persist even if you and everyone
04:36
else around you looks away leaves the
04:38
scene teleports to a different world or
04:41
logs off altogether and by persistent i
04:44
don't just mean stored in memory waiting
04:46
for someone to log back in or pass it by
04:48
in a virtual setting persistence means
04:51
if it was an object in motion it should
04:53
stay in motion until it hits something
04:55
even if nothing is around to witness it
04:57
if it was a spaceship it should continue
04:59
to its destination arrive and then begin
05:02
its mission regardless if anyone is ever
05:04
around to witness it persistence means
05:07
the world keeps moving because that's
05:09
what the world does not because somebody
05:11
is there to watch it that same
05:13
persistence enables an economy driven by
05:15
real humans but also computer-driven
05:17
non-human actors just like we see in
05:20
some video games today in the form of
05:22
non-playable characters or npcs that
05:24
means people will be able to have
05:26
businesses in the metaverse just like
05:27
they have in some video games today
05:29
they'll be able to create products and
05:31
services buy and sell assets and do work
05:34
that provides value to others even in
05:36
the physical world the metaverse also
05:38
shouldn't have any limits on the number
05:39
of users or how they can interact
05:42
meaning you should be able to carry data
05:44
digital items assets and content across
05:47
services and experiences that set of
05:49
content and experiences can be created
05:51
by a wide variety of contributors from
05:54
individuals all the way up to the
05:55
biggest tech giants like disney today no
05:58
three video games talk to each other and
06:00
everything requires its own login so
06:03
with that context here's friedberg's
06:04
comment on the metaverse one more time
06:07
my worst trend was the metaverse i think
06:09
it's like the renaming of something
06:10
that's been going on for a long time as
06:11
if it's some new future thing if
06:13
anyone's played fortnite over the last
06:16
six years or five years
06:18
um you know the metaverse has been here
06:20
for a long time and the people find
06:22
value in digital goods people find value
06:24
in digital levels and badging and they
06:26
find um honor and progress in their
06:28
lives uh by accomplishing things in a
06:31
digital universe and they've been doing
06:32
that from minecraft to fortnight uh to
06:35
other places for a long time um
06:37
and it's uh it's it's fascinating to
06:39
watch but the notion that we call this
06:40
thing the metaverse and everyone's
06:41
trying to reclassify it as some future
06:43
singular universe and therefore they can
06:45
own that singular universe is is a is a
06:48
pretty misstated and misguided kind of
06:50
concept today your achievements in
06:52
fortnite and minecraft stop at the
06:54
boundaries of those experiences in the
06:56
metaverse people will find value in
06:57
playing fortnite exactly because when
07:00
you do earn digital goods and levels and
07:02
rewards in that game that value will be
07:04
useful everywhere else you can turn
07:06
around and sell your rewards for tickets
07:08
to entirely different experiences or
07:10
transport to exclusive planets or just
07:12
gain access to the content from the next
07:14
fortnight game when it comes out if
07:16
you're interested in learning even more
07:18
about the metaverse its applications
07:20
outside of video games and which
07:21
companies are really building its
07:23
foundation here are a few great
07:24
resources for you the best resource is
07:27
matthewball.vc
07:29
matthew ball is straight up the best
07:30
person to follow on this topic and he
07:33
publishes essays on a wide variety of
07:35
things ranging from content services and
07:37
economies inside the metaverse to the
07:39
hardware and software they'll be built
07:41
on whether you're serious about one day
07:42
making money inside the metaverse or
07:45
through stocks of the companies building
07:46
it matthew ball needs to be on your list
07:48
i'll talk more about him in a minute
07:50
another good resource you should put on
07:52
your list is arc invest one of
07:54
arkhanvest's funds is arc w which is
07:56
themed around the next generation of
07:58
internet applications it includes cloud
08:00
computing ecommerce big data social
08:03
platforms and even blockchain
08:04
technologies all of which are relevant
08:06
building blocks to the metaverse arc
08:08
publishes research on artificial
08:10
intelligence deep learning the future of
08:13
server architectures and data centers
08:14
and virtual worlds and actually those
08:17
were the first topics of arc invest's
08:18
2021 big ideas report today's virtual
08:21
worlds are independent of each other but
08:24
in the future they could become
08:25
interoperable culminating in what
08:27
futurists have deemed the metaverse
08:29
again david friedberg is a super smart
08:31
guy i just think he's mistaking the
08:33
metaverse for one of these virtual
08:35
worlds i'm excited to see if virtual
08:37
worlds are featured again in
08:39
arkhanvest's 2022 big ideas report which
08:41
comes out at the end of january the
08:43
third resource i want to point out is
08:45
this channel since i track many of the
08:47
funds related to the metaverse and i
08:49
read a lot of research on it last year i
08:52
published more than 50 videos on
08:53
arkhanvest's research not just their
08:55
stock picks i've also published around
08:57
10 videos focused specifically on
08:59
investing in the metaverse and its
09:01
underlying technology companies so if
09:03
you're an investor interested in
09:05
understanding the state of the art at a
09:07
high level check out my most recent
09:08
episode on the meniverse i'll leave that
09:10
in the top right hand corner of your
09:12
screen right now and in the description
09:14
below as well and if these episodes are
09:17
adding value to your day consider liking
09:19
them and subscribing to the channel with
09:20
all notifications turned on that way
09:23
you'll be the first to know when
09:24
something new and exciting happens
09:25
related to this topic okay let's get
09:28
back to matthew ball because there's one
09:29
more resource that you should be aware
09:31
of you probably already know about the
09:33
round hill ball metaverse etf ticker
09:35
symbol meta which launched last summer
09:37
what you may not know is when it gets
09:39
rebalanced and how the fund is updated
09:42
on the third monday of march june
09:44
september and december of every year
09:46
instead of being conviction weighted
09:47
like rw this index fund is rebalanced by
09:50
the ball metaverse research partners led
09:52
by matthew ball himself upon each
09:55
selection day each company is ranked by
09:57
the expert council as either a pure play
09:59
core or non-core company for each
10:01
category outlined in the metaverse
10:03
market map each company is given a score
10:06
in each category based on how much of
10:08
their business affects that part of the
10:10
metaverse then there are some rules
10:11
about how each company is scored in each
10:13
category and how much each category can
10:15
weigh in the fund think of it like this
10:18
the metaverse jedi council gets together
10:20
and scores every company based on how
10:21
relatively awesome they are at metaverse
10:24
related hardware computing virtual
10:26
platforms and so on then they decide how
10:29
important those same categories are to
10:31
the metaverse overall and how the
10:32
holdings inside this index fund should
10:34
be weighted as a result if one company
10:37
is too awesome in a given category the
10:39
extra awesomeness is divided among the
10:41
rest of the companies in that category
10:43
according to how awesome they are at
10:45
that same thing
10:46
then the extra awesomeness is divided
10:48
among the rest of the companies in that
10:50
category according to how awesome they
10:52
are at that same thing if one category
10:54
is too important its excess importance
10:56
is given to the other categories the
10:58
same way that means the top holdings in
11:00
this fund are the most influential
11:02
companies to the metaverse overall if
11:04
the metaverse becomes a reality these
11:06
same companies are the ones that stand
11:08
to gain the most as a result the fund
11:10
just got rebalanced so now is a great
11:12
time to see what's in it will it be
11:14
filled with video game companies like
11:16
david friedberg from the all in pod
11:18
would suggest or filled with something
11:20
else entirely here's what's in the meta
11:22
fund right now the biggest holdings are
11:24
nvidia meta platforms roblox microsoft
11:27
unity software snapchat autodesk amazon
11:31
apple taiwan semiconductor c limited and
11:34
then qualcomm after that the holding
11:36
weights really start to drop off most of
11:38
these top holdings make the hardware and
11:40
software platforms for other companies
11:42
to build on top of for example nvidia
11:45
builds servers and super computers and
11:47
also the chips that go into devices that
11:49
connect to the metaverse like computers
11:51
and vr headsets also through their
11:53
omniverse initiative nvidia is building
11:55
virtual platforms for content creation
11:57
and developing digital twins of physical
11:59
assets that's why it sits at the top
12:02
many stocks are in this fund for more
12:04
than one reason they fit into multiple
12:06
categories like hardware computing
12:08
components networking virtual platforms
12:10
data services digital payments and
12:13
content creation platforms see limited
12:15
is in here not just because of its
12:16
garena platform which is their video
12:18
game publishing and development unit but
12:20
also because of their digital payment
12:22
solutions that spun out of garena to
12:24
become shoppy and see money if we count
12:27
just the pure play video game companies
12:29
we get roblox take two interactive
12:31
electronic arts crafton inc and
12:33
activision blizzard just 5 out of 45
12:36
holdings six if you want to count unity
12:38
software but i really believe that they
12:40
do a lot more than just video games
12:43
unity is an end-to-end 3d visualization
12:45
engine and their platform has been used
12:47
to develop nearly 60 percent of all ar
12:50
and vr content including viral mobile
12:52
experiences like pokemon go in fact
12:54
something like 90
12:56
of the content on emerging augmented
12:58
reality platforms is made using the
13:00
unity engine they're consistently
13:02
investing to expand their platforms to
13:04
cater to industries like architecture
13:05
and engineering 3d designs automotive
13:08
designs 3d film and animation creation
13:11
unity's platform is used by 8 out of the
13:13
top 10 architecture engineering and
13:15
design companies in the world as well as
13:17
9 out of the top 10 automotive companies
13:20
like honda volvo and bmw think about
13:23
real estate applications where you want
13:24
to place furniture in a home to stage a
13:26
virtual walkthrough and can rearrange
13:28
the house in an infinite number of ways
13:30
with the push of a button or even
13:32
randomize the layout of a house
13:34
altogether now imagine doing this
13:36
valuable design work for digital assets
13:38
that people want to own and interact
13:40
with in the metaverse not just in the
13:42
physical world that's the very long-term
13:44
idea that companies like nvidia and
13:46
unity software are building towards and
13:48
why their core holdings in this
13:50
metaverse fund another thing we can look
13:52
at is what changed in the fund when it
13:54
was rebalanced the gray bars show meta's
13:56
weights before rebalancing and the blue
13:58
bars show them after each bar for each
14:00
holding is labeled with its change in
14:02
weight and the bars that are only blue
14:04
are new additions to the fund the
14:06
positions are sorted the same way as
14:08
before with the current biggest holdings
14:10
on the left so nvidia is still the first
14:13
biggest position in the fund even though
14:15
its weight was dropped from almost
14:16
eleven percent back down to just over
14:18
eight percent this big sellout of nvidia
14:20
has nothing to do with nvidia one of the
14:23
rules of the meta index fund is that no
14:25
position can be more than eight percent
14:26
of the fund by weight thank you to
14:29
matthew ball himself for pointing that
14:30
out to me on twitter that was pretty
14:32
cool meta platforms is now the second
14:35
biggest holding after its weight was
14:36
also increased to eight percent the
14:38
biggest weight increases inside this
14:40
fund should give us an updated view on
14:42
which companies and categories that
14:44
matthew ball and his jedi council think
14:46
have the greatest impact on the
14:47
metaverse today the biggest increases in
14:50
weight belong to meta platforms unity
14:52
software snapchat c limited and advanced
14:55
micro devices or amd most of these
14:57
companies have a lot going on besides
15:00
video games if they're directly involved
15:02
with video games at all and finally here
15:04
are all of the weight changes when the
15:05
fun got rebalanced in order from biggest
15:08
to smallest meta unity snapchat c and
15:11
amd are all at the top of the list
15:13
crafton galaxy digital and naver are all
15:16
new holdings inside the fund making them
15:18
big additions as well of those crafton
15:21
is the only one focused purely on video
15:24
games if you want your own copy of this
15:26
data i've put it all together in one
15:27
convenient twitter thread for you i
15:29
strongly believe that twitter is a great
15:31
place to connect with investors and
15:32
exchange ideas and research so i'm going
15:35
to be a lot more active on it i'll leave
15:37
a link to my twitter thread on the
15:38
metaverse funds rebalancing in the top
15:40
right hand corner of your screen right
15:41
now and in the description below as well
15:44
no matter how you slice it there's a lot
15:46
more to the metaverse than david
15:47
friedberg thinks and this is one piece
15:49
of data that proves it i'm curious to
15:51
hear what you think comment below or
15:53
tweet me at ticker symbol u with your
15:55
thoughts on the metaverse the stocks
15:57
inside this fund and using investing
15:59
research and data to learn about trends
16:01
in technology is this a good way to
16:03
follow the money when it comes to growth
16:05
stocks and technology trends or am i
16:07
connecting the wrong pieces of the
16:09
puzzle here seriously i read all my
16:11
comments and tweets and i'm excited to
16:12
hear your thoughts i have a feeling that
16:15
2022 is going to be a crazy year
16:22
so stay long stay strong and thanks for
16:25
watching until next time this is ticker
16:27
symbol you my name is alex reminding you
16:30
that the best investment you can make is
16:32
in you