May 28, 2015
How To Profit From The Dark Side
Of Modern Technology
By Andy Obermueller
Only once a lifetime -- twice, if you're lucky -- does an invention come along that truly changes the world. The wheel. The plow. The printing press. The combustion engine. The semiconductor. The wheel increased the speed and efficiency of transportation and was the foundation of future ingenuities likes railroads and automobiles. The plow allowed farmers to achieve economies of scale and produce more food than humans needed to survive. The printing press spread literacy from select nobles, elites and holy figures to the common man. An enormity of information could be recorded and proliferated, at relatively low cost. The combustion engine connected the globe physically via ships, trains, automobiles and airplanes. And the semiconductor united the world intellectually with instant mass communication between anyone, no matter the geographic distance. But with the benefits that come from mankind's past and future achievements, there will always be exploitation.
The wheel -- and eventually the combustion engine -- became (amongst other uses) weapons of war and oppression. The printing press can be used to spread propaganda, libel and plagiarism. Over-plowing depletes a soil's nutrients and makes farmland infertile. Not only were these problems not solved overnight, but many of them are largely still present to this day... decades, even centuries, after the original tool was invented. Today, we are in the midst of a technological renaissance. The power of a semiconductor (the heart of most of today's technological innovation) doubles every two years, according to the universally accepted Moore's Law. Gadgets that nearly every American owns today are more powerful and compact than the satellites launched into space decades ago. Nearly every aspect of life is now digitized: from family photos and funny videos to medical records and bank statements. And for the technologically savvy, all of that information is practically up for grabs. If you're not fully protected, then all of your private information could find its way into the wrong hands. In 2014, cyberattacks cost the world more than $400 billion. For reference, that's larger than the GDP of 170 individual countries. That same year, Target, Home Depot and JPMorgan Chase & Co. reported that their systems had been corrupted, leaking sensitive information of roughly 250 million customers. The hacks cost the three companies a combined $1.2 billion in damages. That's why today, the companies operating in the cybersecurity space have never been in higher demand. So it's no wonder the world's first cybersecurity exchange-traded fund was created last year to track the rise of these new companies. The PureFunds ISE Cybersecurity ETF (NYSE: HACK) holds some of the hardest-working cyber-defense firms out there, from giants like Cisco Systems (Nasdaq: CSCO) to several lesser-known companies (one of which I'll tell you about in a moment). In the few months since the ETF began, it's already started to prove the power of cybersecurity. Over the past six months, HACK has delivered investors a gain of 22.6%. That's six times more than the S&P's 3.6% gain over the same time. 
But this performance is likely only the beginning of what the cybersecurity industry has to offer investors in the near future. Last year, an estimated 15.8 million Americans fell victim to a cybercrime. That's a 21% increase from the 13.1 million victims who had their identities stolen in 2013. And CNN Money recently reported that another person falls victim to identity fraud every two seconds. That's an alarming rate and one that cybersecurity firms have been tasked with reducing.  With demand steadily growing, it won't be long before the burgeoning cybersecurity industry explodes... making early investors huge gains in the process. Markets and Markets -- a market research firm based in Dallas, Texas -- estimated that the cybersecurity market was worth roughly $95.6 billion in 2014. By 2019, the firm expects the industry to skyrocket to a whopping $155.7 billion, a 63% increase over just five years.  But here's the best part: most investors still aren't talking about cybersecurity right now. The industry is in its infancy and Wall Street has yet to realize the profit potential of the firms involved. Luckily, my research team and I have been working for months to get in on this trend ahead of the crowd by tracking a small handful of cybersecurity stocks. In fact, I found four under-the-radar firms that have gained an average of 43.3% over the past 12 months and have robust upside potential in the future. One sells its software to 99% of all Fortune 1,000 companies and has seen its share price jump 15% in the past year. Another has quietly seen its revenue shoot up from $12 million in 2010 to a whopping $426 million in 2014. That's an average annual growth rate of 146%. If you're curious about these firms, I've included the names and ticker symbols for each of them in my newest report 4 Cybersecurity Stocks With Triple-Digit Upside. It's crucial you get in on this trend sooner rather than later. Before long, the market will catch on and all the biggest gains will have passed you by. If you'd like to check out this report, which contains even more research and in-depth analysis on this powerful, burgeoning industry, simply click here. Good investing,
Andy Obermueller
Chief Investment Strategist
Game-Changing Stocks
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