Nick’s Note: When it comes to groundbreaking technological trends, we turn to longtime PBRG friend Jeff Brown, editor of Exponential Tech Investor.
Jeff has decades of experience in the technology industry… And thanks to his direct connection to Silicon Valley’s inner circle, he often has the inside track on big tech news before it hits the mainstream media.
In today’s essay, Jeff reveals an unseen crisis facing America. He shows what steps are being taken to correct it… and why that could make early investors rich.
By Jeff Brown, editor, Exponential Tech Investor
America is facing an unseen infrastructure crisis…
To be clear, I’m not talking about infrastructure like roads, bridges, or canals. In fact, you might argue that the infrastructure I’m referring to is far more important.
That’s because it’s at the center of modern society. How we do business, shop, and communicate depends on it. In fact, I’m certain you use this infrastructure every single day.
I’m referring to America’s wireless networks—the vast systems of cell towers and fiber optic cables that make it possible for you to get online.
Most people don’t realize it, but America’s current wireless networks are quickly becoming obsolete.
And unless this is corrected soon, it could have dire consequences for America’s economy and national security…
Evolution of a Network
Whenever you connect to the internet on your computer, smartphone, or smart TV, a vast physical infrastructure makes that connection possible.
For instance, there’s a 500,000-mile-long network of fiber optic cables beneath the Atlantic and Pacific Oceans. They carry most of the world’s internet traffic. These transoceanic cables connect to vast land-based fiber optic networks, which, in turn, connect to consumers’ homes and businesses.
Over the years, this massive network has evolved. Companies and governments built new infrastructure to support the next generation of wireless connectivity.
We built out the 1G (first-generation) network in the 1980s. Compared to what’s possible today, it didn’t allow you to do much. You could only place voice calls—there was no layer for carrying other types of data. And you had to use one of those brick-sized cell phones Gordon Gekko yaps into in the movie Wall Street.
Then, in the 1990s, we got 2G. With it, you could send and receive emails and text messages.
Next, in the early 2000s, 3G brought faster connection speeds. The quality wasn’t always the best. But for the first time, you could stream video and audio.
Finally, we got the network we use today—4G. It went live at the start of this decade.
But today’s 4G network faces a problem. It can be summed up in one word: data.
Both consumers and businesses have a seemingly endless thirst for consuming and sending more data over wireless networks.
The chart below shows the amount of data and voice traffic over the world’s wireless networks since the third quarter of 2012.
The chart above shows the amount of data and voice traffic transmitted over the world’s wireless networks since the first quarter of 2013. And it shows the exponential growth in demand for sending and receiving data (like images, music, and websites) over wireless networks.
The amount of voice traffic (in gray) has been roughly constant over the last five years. But what’s striking is that data (in blue) has exploded. In the first quarter of this year, nearly 15 exabytes of data were transmitted per month.
An exabyte is equivalent to 100,000 times all the printed material in the Library of Congress. All the words ever spoken by human beings can be contained in five exabytes. It’s hard to get your head around.
So what does this mean for internet users?
Have you had a dropped call in the last 12 months? Or how about when you dial a number and someone picks up, but you can’t hear them? Has the internet been slow to download a web page? Can’t seem to download or send your email?
These issues are almost always due to network congestion. Just like when there’s a traffic jam on a highway and the cars aren’t moving… there can be too much data on a wireless network—and the digital packets of information just can’t get to where they are intended to go.
And it may surprise you to learn that this problem is rather unique to the U.S.
America’s Sluggish Wireless Networks
With an average download speed of 10 Mbps (megabits per second), the U.S. has some of the slowest internet speeds in the world.
[Megabits per second, or Mbps, is a common measurement for internet connection and download speeds. For example, to stream a high-definition video from Netflix, you need a download speed of at least 5 Mbps.]
We’re in 50th place, behind Romania and Finland. Even Dracula and the reindeer have internet speeds faster than most Americans.
Why is this such a big deal?
At an economic level, it’s a significant competitive disadvantage. Work and digital services are mobile these days. Many companies have a “mobile first” strategy that prioritizes access to products or services via mobile devices like smartphones.
Fortunately, help is on the way…
The Future of the Internet
As I write this, we are in the midst of a new communications infrastructure buildout. New towers are going up. New fiber optic lines are being laid.
The purpose of this buildout is to upgrade America’s failing communication infrastructure to the next generation of wireless connectivity: fifth-generation, or 5G.
With 5G, the peak speed jumps to 10 gigabits per second (Gbps). One gigabit is 1,000 megabits. So at peak speed, 5G will be 1,000 times faster than the average 4G connection we have today.
Even if we assume that average 5G speeds will be just 10% of their potential, we’re still looking at 1,000 Mbps. That means that average 5G speeds will be 100 times faster than what we have today.
With that kind of speed, you’ll be able to download a two-hour movie in 10 seconds. Dropped phone calls and slow-loading web pages will be things of the past.
Plus, some previously “sci-fi” tech will finally become a reality. Technologies like self-driving cars, virtual reality, and holographic projection will all operate over high-speed 5G connections. The applications are endless.
5G is a game-changer because of all the technological innovation it will bring about.
I also estimate that 5G will create an additional three million jobs. That includes jobs associated with building and maintaining the wireless networks, as well as jobs associated with products and services that will be created thanks to the high speeds of 5G. It will also add about $500 billion in U.S. GDP growth.
And here’s the thing… While the infrastructure buildout will take years to cover the entire country, 5G services are ready to launch in a handful of cities starting in a matter of weeks.
Verizon recently announced that 5G wireless connection would be available for homes located in Houston, Los Angeles, Sacramento, and Indianapolis starting October 1.
And if you’re hoping to gain exposure to this trend, one option is to invest in the companies responsible for building and maintaining the infrastructure needed for 5G wireless networks.
American Tower (AMT) is one of these wireless communications infrastructure companies. It builds and maintains communications infrastructure like cell towers.
It was instrumental in the 4G buildout that started in 2011. And it’s also heavily involved in erecting and maintaining the towers used in the 5G buildout.
The chart below shows the performance of AMT from 2011, when the 4G buildout started, to today.
I expect American Tower will continue to climb as the 5G infrastructure buildout continues.
Editor, Exponential Tech Investor
P.S. The 5G revolution is one of those rare, once-in-a-generation moments for technology. It will transform society. Thanks to 5G, we’ll see fleets of self-driving cars on the road. Remote surgeries will be performed on patients thousands of miles away. Soon, you’ll even be able to “beam” into work with hologram technology running on a 5G network.
Trillions of dollars in wealth will be created. And smart investors stand to make a fortune. I recently identified one tiny company that will be essential to the future of 5G. I expect the stock will soar 10X in the years ahead. You can get all the details right here.
A reader responds to Nick’s September 18 article about teaching his dad (and friends) how to buy bitcoin…
From Sandra S.: Great article, Nick. It’s interesting that the big boys are getting involved in the crypto world. But won’t that drive up the price so high that eventually normal people like me won’t be able to buy bitcoin in the future?
If that happens, we won’t be able to buy cryptos, either.
Nick’s Reply: Thanks for the response, Sandra.
We hope the big boys do push up the price of bitcoin… We’ll be positioned to make a lot of money if that happens! And hopefully you will be, too…
But remember, you don’t have to buy a full bitcoin. You can buy bitcoin in fractions—down to a penny. So the average person will always be able to afford to buy some crypto, even when prices move higher.
Again, cryptos are the perfect asymmetric bet. You don’t need to invest much in these ideas for the potential to make life-changing gains. So keep your positions sizes small.
And subscribers share stories of how PBRG has helped change their financial lives…
From Tim D.: I’ve been with The Palm Beach Letter since its inception in 2011… and not only have I learned a lot, but I have grown a very diverse portfolio.
I was extremely disappointed when the Legacy portfolio was discontinued. I had many winning stocks in there that I didn’t feel comfortable letting go. I was also sold on the idea that these were “forever” stocks. It felt like a service was shut down so that you could start a new one at the customer’s expense.
But I’ve since signed up for Palm Beach Confidential, Palm Beach Trader, and now Alpha Edge. I want to express how awesome these services are. They more than make up for the loss of the Legacy portfolio.
From Linda W.: The Palm Beach Letter is my first—and still my favorite—investment newsletter.
The education I’ve received has helped me go from knowing next to nothing about investing to being someone who is very comfortable in the investing world.
My Palm Beach Letter subscription led me to Palm Beach Confidential and cryptocurrencies. My initial investment of $1,500 in late 2016 has blossomed to over $45,000… even in this radical bear market.
At its high, my crypto portfolio had exploded to $300,000 (200x, anyone?!). And I anticipate that it will go there and beyond in the not-too-distant future.
The concept of asymmetric trades and small position sizes has been an invaluable tool. It’s really what enticed me into this speculative arena to begin with. And the results speak for themselves.
Do you have any stories to share with us? Send them right here…
Central Park is 1.31 square miles—pretty big. Manhattan, of course, is much bigger—22.8 square miles.
The new, largest factory in world history that’s opening any day now? It’s bigger than all of Manhattan.