Disrupters At The Gate

I recently finished reading Disrupters at the Gate by Jeffrey Cole and Harlan Lebo. A very good book but not outstanding because it dragged somewhat in the last few chapters. What let me down was a lack of actionable investment information to help buttress my stock portfolio. That said, throughout the book it gives terrific histories of once stalwart organizations that failed to adapt to changing times. Xerox and Kodak come to mind. One chapter is dedicated to Blockbuster Video and how Netflix dethroned them because they envisioned the future and transitioned to streaming. 

Yesterday, CNBC ran multiple segments on Netflix. They just reported another disappointing earnings report. Although Netflix has a limited slate of NFL games, they don't have enough football on the platform. That's where the action is. Something like 92 of the top 100 television shows are either NFL games or college football. Most of them are NFL. Although the broadcasting rites are expensive to acquire, it's what the American public wants. Netflix stock has been walloped the last few years after being a Wall Street darling for well over a decade even though they carry combat sports and European football. 

Gen Alpha and Gen Z, the preferred advertising demographic for video content, have much shorter attention spans than previous generations. Free services such as YouTube and TikTok are their go to internet destinations for short form video clips, plus social media sites such as Instagram and X are in the mix. Now Netflix is the company being disrupted. Is this a death knell for Netflix? Not at all. It's still a premier streaming service, it's just not the growth company it used to be. Personally, I'm not a subscriber to Netflix although I've been one in the past, twice. They just didn't have enough content offerings that suited my tastes. If they had more NFL or college football games, I would sign up in a heartbeat on the advertising tier. Give me the gridiron or I'm going somewhere else. 

One chapter in Disrupters at the Gate is focused on the personal computer revolution. Most notably Apple and Microsoft. An excerpt of an interview with Bill Gates is included. When asked what kept him up at night, Gates responded, "Two guys in a garage in Silicon Valley.". We're at an inflection point where massive transformation is here because of Artificial Intelligence. Bootstrap organizations that consist of just a few people are making applications for the masses and making millions if not billions of dollars. Although no longer startups, both Anthropic and OpenAI started this way. There's going to be more to come as we get into the second derivative of the AI buildout. 

If we break down the epochs of time, it's BC, AD, PC, WiFi, and currently AI. AI has now morphed into Agentic AI and requires crypto in the form of stablecoins to fully function autonomously. These stablecoins run on blockchains so cryptocurrency is here to stay. According to Matt Hougan, Chief Investment Officer of Bitwise Asset Management, the "Mount Rushmore" of crypto consists of Bitcoin, Ethereum, Solana and Chainlink. These are the foundational blocks in digital assets that will propel institutional adoption and real-world asset tokenization for Decentralized Finance.

I own assets in both Chainlink and Solana via spot-priced ETFs. According to Standard Chartered, the multinational European bank, the bull case for Chainlink  is $200 by 2030. That's almost a twenty-fold increase. Some pundits peg Solana as a seven bagger in the same timespan. We're not even talking about the decade of the 2030s when Blockchain has the potential to be the fundamental driver of the S&P 500 companies. I'm not so sure how high Bitcoin will rise, it's like digital gold. The problem is, at least currently, as Bitcoin goes, so goes the crypto market. That's why I'm rooting for Bitcoin. I'm not sure where this is all going, but AI and crypto are the disrupters now. This is where you're going to make the money. That's what I'm betting on.