- These fintech companies are lending a hand to America’s small businesses
- A COVID-19 test result… in one minute
- CRISPR: The Swiss Army knife of precision medicine
Dear Reader, I’ve been spending a lot of time researching and thinking about the longer-term implications of the COVID-19 crisis. We need to understand the situation from an investment perspective. But we also need to understand where the world goes from here. In fact, I believe understanding the future behavioral changes, their impact on existing businesses, and new business opportunities is fundamental to any investment thesis. For example, is the world going to go on lockdown again in the late fall when COVID-19 returns? And yes, it will still be around in the fall but nowhere near as prevalent as it is now. 
Will the world go on lockdown every fall/winter season to avoid future deaths from influenza and pneumonia? After all, there are far more of those deaths every season than there ever will be from COVID-19. The “scar tissue” from this situation will run deep for many years. More than 20 million people will likely be unemployed in the U.S. by the end of this week. That number will likely grow to more than 30 million before the end of the month. As upsetting as it is to say, we should expect depression, suicide, substance abuse, and even deaths as a result of postponed surgeries. Yes, this will change the way we work, live, eat, play, and interact with one another for years to come. And yes, there are significant investment implications. Take videoconferencing, for example. The chart below shows the utilization of three top videoconferencing software platforms since March 2. 
The teal color is Webex (owned by Cisco), the red color is Skype (owned by Microsoft), and the dark-blue color is Zoom Video, which recently went public. The chart is almost comical. Zoom Video, which went public last April, was almost unknown two years ago. Now it is practically a household name. Its traffic has grown more than 700% since February 1. Why is it comical? Cisco paid $3.2 billion for Webex back in 2007, and it is now a distant competitor of Zoom Video. And Microsoft acquired Skype in 2011 for an impressive $8.5 billion, but it’s barely any better than Webex on this chart. What did it cost for Zoom Video to become No. 1? The venture capital community invested a mere $161 million before the IPO. The world is using the next generation of workplace productivity tools to adjust to the new normal of a distributed workforce. We can expect to see staggered work schedules (by days and hours), more remote work, less business travel, and a whole lot more tech in our lives as we come out of this mess. And there are a whole lot of fantastic investment opportunities. This is not a recommendation to invest in Zoom Video (ZM), to be clear. The stock is currently trading at a ridiculous valuation of 45 enterprise value to sales. The company will have sales of roughly $900 million this year and is trading at a $40 billion valuation. Investing at these levels will only cause heartbreak and empty brokerage accounts. But I will be monitoring new investment opportunities that have been prompted by this major shift in society. As always, my readers will be the first to know. Now to our insights… | Recommended Link | | Massive disruption in Washington, lawmakers freaking out A new, competing financial system is taking root… This could be the biggest disruption to the U.S. dollar average Americans have seen in a century… And the technology behind it will change the world in ways you can't imagine. | | | -- | These tech-savvy companies will facilitate the Paycheck Protection Plan (PPP)… As readers likely know, the Small Business Association’s (SBA) Paycheck Protection Plan (PPP) is part of the COVID-19 aid package that provides forgivable loans to small businesses that keep employees on payroll for at least eight weeks. This rolled out as part of the $350 billion package for small businesses in the CARES Act recently passed by the U.S. Congress. The big news is that the U.S. government approved Intuit, PayPal, and Square to participate in the program by extending these loans to small businesses. This is a big win for these companies and small businesses around the country. Here’s why… At first, it looked like the big banks would be the sole issuer of these loans. The problem is that these banks charge the government, and thus taxpayers, excessive fees for providing this service. That’s kind of ridiculous considering taxpayers had to bail them out back in 2008–2009 after their failure to manage their risk… something they are supposed to be good at doing. 5G's Secret Engine Revealed in 2020. Dealing with the big banks to access PPP loans can be a nightmare for small businesses around the country. Unlike the big banks, Intuit, PayPal, and Square built their companies by supporting small businesses. I was very happy to see that these companies will facilitate PPP loans. It’s great for exposure. And small businesses will have a much easier time accessing the financing they need to survive. It’s a win-win. As regular readers may know, my favorite of this bunch is Square. Square Capital has been providing loans to small and midsize businesses for years now with great success. That’s because, thanks to its artificial intelligence technology, Square knows these businesses better than the owners do. Square knows their financial positions at all times. It knows their seasonal patterns. And it knows exactly when a small business needs a loan to keep it running optimally. And when it comes to the PPP, Square can prompt small businesses to apply for the program directly through their Square point-of-sale terminals. Then the terminal can walk business owners through the entire process. They will never need to leave the comforts of their home or workplace. Talk about convenience. And, of course, Square won’t be limited to just its own customers. It can help other businesses that aren’t using Square’s products yet. That’s a great way to build new business relationships and grow. And I would point out that Square is now trading around 30% below its recent high. The fear-induced selling hit Square especially hard. The concern was that business closures would impact Square’s point-of-sale terminal business. That may be the case for the short term. But longer term, Square’s technology platform is more critical than ever. The one-minute COVID-19 test… Here’s a great development in the fight against COVID-19… Researchers at the Catalan Institute of Nanoscience and Nanotechnology in Barcelona, Spain, just developed a photonics-based COVID-19 test that can provide results in just one minute. The test requires just a simple saliva swab sample. That sample is placed in an ultrasensitive detector that manipulates light to test for COVID-19 infections almost instantly. Compare this to existing COVID-19 tests that take at least 24 hours to process… or even sometimes more than a week. Having to wait for days or over a week for results defeats the purpose. This test uses photonics technology – light – to determine COVID-19 infections as early as the first day of infection. That’s significant because patients have a low viral load in the early days of infection. Not much of the virus is in their systems, so the virus can be difficult to detect. That has made it hard to track day-one infections up to this point. This new test represents a big improvement over existing test kits. And what’s great is that it’s not limited to COVID-19. The test can potentially detect RNA strands of any virus. That means it will be useful even after COVID-19 is a memory. So I expect we will see this technology used widely in the near future. One of the big reasons why we went on lockdown in response to COVID-19 was the lack of testing… The world didn’t have access to accurate data. And for the most part, we still don’t. We can’t quickly assess who is infected and who isn’t, so everybody went into self-isolation. And as we are now seeing, the numbers being reported appear to be manipulated as result. With a one-minute photonics test, we could assess infections on the spot. That way, there would be no excuses for not testing and improving the accuracy of medical reporting on COVID-19. And with a turnaround time like this, it could possibly even be used at borders to test those arriving from countries with a high incidence of COVID-19 or any other virus. We’re going to see a lot more of this kind of verification in the years to come when we travel. | Recommended Link | | Welcome to an empire of debt Our credit system is currently sitting at $68 trillion. It's the largest debt ceiling in the history of the world – in fact, it's more than twice the value of every single home in America put together. It's the most crucial part of our economy. And despite stagnant wages and rising costs, America still appears to be getting richer and richer (at least on paper). And there's the problem… This massive credit system is about to collapse. But this system has a dark secret about where it's going to get money to pay off this massive debt. This will affect EVERY American citizen! | | | -- | CRISPR is back with a new application… New research has discovered yet another great application for CRISPR. As a reminder, CRISPR is a powerful genetic editing technology. It can “edit” our genetic code as if it were software in order to correct unwanted genetic mutations. And it turns out that CRISPR can also provide valuable analysis for kidney transplant patients… Today, kidney transplant patients must use medication that suppresses their immune systems. That’s done to prevent the body from rejecting the new organ. And given the shortage of transplant organs available and the long list of people waiting for a transplant, organ rejection is heartbreaking when it occurs. But there’s a problem with this approach. If we suppress sick people’s immune systems, we increase their risk of contracting other infections. And that’s where CRISPR comes in… A research team at the Max Delbrück Center for Molecular Medicine in Berlin discovered how to use CRISPR-Cas13 to detect viruses that often increase during organ rejection in the human body. A Sneak Peek Inside Apple's 5G iPhone? By testing for these viruses, doctors would be able to monitor patients' risk of infection and rejection more effectively. In other words, this CRISPR analysis would inform care for transplant patients. Notice that the Cas13 enzyme performs this testing. Regular readers may remember that Cas9 is the enzyme that performs CRISPR’s “cut and paste” function for treating genetic diseases. We are learning that CRISPR can use different enzymes that perform optimally for different therapeutic or diagnostic applications. And what’s great about this Cas13 test system is that it’s as simple as a pregnancy test. Just place a patient’s urine sample on a test strip, and lines appear if the viruses are present. It’s pain-free and so easy to understand that a first grader could read the results. Blood tests and biopsies are no longer required. So this is another great application of CRISPR technology. It’s quickly becoming the Swiss Army knife of the precision medicine trend. And thanks to CRISPR and precision medicine, we’ll live well past 100 with a high quality of life. I can’t wait to see what else this technology can do. Regards, Jeff Brown
Editor, The Bleeding Edge
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