Outsider Question of the Week, Jan. 30

Outsider Club's Weekly Reader Question "What in the world is going on with this Chinese company Huawei. If everyone is kicking them out, what can we invest in instead?" — Franklin M. JASON SIMPKINS | Editor Well this is an easy one for me... Just do what I've been telling you to do for the past year: Invest in cybersecurity companies. Among other things, Huawei was trying to ste You are receiving this email because you subscribed to Outsider Club. [Click here]( to manage your e-mail preferences. [Outsider Club logo] By Outsider Club Written Jan. 30, 2019 Outsider Club's Weekly Reader Question "What in the world is going on with this Chinese company Huawei. If everyone is kicking them out, what can we invest in instead?"— Franklin M. --------------------------------------------------------------- [jason_simpkins_250x285]JASON SIMPKINS | Editor Well this is an easy one for me... Just do what I've been telling you to do for the past year: Invest in cybersecurity companies. Among other things, Huawei was trying to steal technology and trade secrets. Management pressured employees to spy on competitors and even had a bonus system in place to reward those who succeeded. I've written about just this kind of thing repeatedly in the Outsider Club. In fact, I reported on [an even bigger scandal in October](, when it was revealed a Chinese company compromised servers that were used by everyone from Amazon to the Department of Defense. Furthermore, subscribers to my [Wealth Warrior advisory]( know that China has a cyberarmy that's been hacking government and corporate databases for more than a decade now. It's stolen submarine schematics, drone technology, weapons designs, battle plans, even Google’s source code. This kind of industrial espionage isn't going away, either. It's increasing in prevalence and sophistication. And most corporations and governments are woefully under-prepared. So invest in the cybersecurity sector. --------------------------------------------------------------- [gerardo_del_real_190x190]GERARDO DEL REAL | Editor What’s going with Huawei reeks of behind-the-scenes power plays that are above my pay grade. As to what you can invest in, I’m going to shamelessly and proudly talk my book and say you should be investing/speculating in junior resource stocks. The risk-reward proposition is as good as I’ve ever seen and it's mainly because 2018 did a heck of a job of humbling everyone in the space by way of a historic beatdown in prices. There are two factors at play that will make speculating in the junior resource space extremely profitable this year. The first I already mentioned. The fact that prices are historically low. The second — and it’s important — is the return of “big money” to the resource sector, specifically the gold and uranium space. Billionaires, hedge funds, and disgruntled crypto traders are all at the gold table, which explains gold's recent run past $1,300. A rally that, for the first time in years, I feel finally has some legs. The combination of a stable and rising gold price combined with gold stocks at depressed levels makes for excellent entry points mitigating a lot of the risk. In the uranium space, the largest consumers are the utilities. Once we get clarity from the Section 232 ruling I expect those utilities to start tripping over each other bidding uranium prices up and sending uranium stocks much, much higher. 2019 will make the pain of 2018 worth it and if you’re new to the space and got to skip the pain part, consider yourself lucky and get ready to make some money. --------------------------------------------------------------- [adam_english_2018_250x285]ADAM ENGLISH | Editor Well the short version is that it has dawned on the rest of the world that the Chinese government, which heavily deploys state-of-the-art domestic surveillance, might just want some of the most basic of those features in the products made by a heavily-state-sponsored company for sale overseas. Call me apathetic and cynical if you will, but I really don't care about this story because I assumed this was going on. Mostly because it has been going on for a long time. It's only been a couple years since there were headlines about massive state surveillance programs with domestic and international components. They talked about how companies were being heavily pressured, and some had caved, to put in back doors for spy agencies. These spy agencies swept up impossibly large amounts of data to sift through. They created targets for kill lists. They listened in on allies' phone calls and read their emails. Then Edward Snowden dropped them in the hands of some journalists and the U.S. intelligence community branded him a traitor for revealing that they were explicitly breaking the law and violating the Constitution. I'm assuming any and every country is pursuing these kinds of programs and this kind of data. It's just that only a small handful are home to companies massive enough to build 5G infrastructure around the world. As for the investment angle, there are a number of companies that are working on 5G systems that Huawei is now being barred from building. Unfortunately, the big contracts are going to big telecoms where the impact of the spending blends into the existing business. Think AT&T, Verizon, and Comcast on the domestic level, and big network hardware makers like Ciena, Adtran, Nokia, and LM Ericcson. The companies that may absorb a lot of the business Huawei had lined up are helping companies upgrade networks, and include Ericsson, Intel, and Nokia. Fair warning though, I didn't do a full due diligence on these companies. But these are good places to start some research. Our friends over at Wealth Daily covered the transition to 5G extensively as a lot of news was coming out over the summer. I suggest you head over to their website and check out their analysis. You can find a list of articles talking about 5G [here](. --------------------------------------------------------------- To [learn more about our editors](, visit our website. And keep an eye on your inbox for Gerardo's (Mondays), Adam's (Tuesdays), and Jason's (Fridays) weekly articles. Submit a Question for the Outsider Club If you would like to ask a question of our editors, simply hit 'reply' to this email. Keep an eye out for future issues to see if your question has been chosen. Please note that not all questions will be selected, and due to the large volume of email we receive, it is unfortunately not possible to respond directly to those emails not selected. Enjoy reading this article? [Click here]( to like it and receive similar articles to read! 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