I’d love to say that being a conservative investor is enough to maintain and grow a family’s wealth but the reality is that a person needs to take on risk to just stay even. Consider this quote from “Striking it Richer”, a paper by UC Berkeley Economist Emmanuel Sanchez who notes that “Top 1% incomes grew by 31.4% while bottom 99% incomes grew only by 0.4% from 2009 to 2012.” Hence, the top 1% captured 95% of the income gains in the first three years” of our post 2008 disaster laden economy.
The people who are reaping these benefits are our country’s asset owners. People like the Koch brothers who sell Dixie cups to the employees working at Walmart. If you want to grow your portfolio to a size that will sustain your family, you cannot rely on slightly beating the averages, you need to find explosive companies that will become the next Dixies of the world.
This is why I have spent a career finding value in technology companies. Today we will discuss something that, within the next few years, you may be seeing and touching every day…
One of the emerging technologies that is making its way into our lives is a substance called Sapphire glass. Sapphire glass is rated “9” on the Moh’s scale of mineral hardness, right behind a diamond but can be grown inexpensively in a lab.
Uses for Sapphire glass include windows in bulletproof cars, LED lighting, and as a protector for sensitive components in mobile phone handsets. The new iPhone uses sapphire glass to protect the camera on the back of the phone and the fingerprint sensor on the front of the device but there is speculation that screens will eventually be made of this instead of Gorilla Glass from Corning as well.
On September 12, 2013, Apple filed a patent with the US Patent and Trademark Office that describes its intent to add a sapphire laminate to future iDevices. It’s one thing to hear a rumor about a possible company direction, it’s another thing to see its intent in print at the USPTO. The patent on file, 20130236699, describes a process of layering glass between two layers of sapphire that would be less than 1mm thick. The benefit would be a scratch resistant screen that is considerably stronger than standalone glass.
Two companies are taking the lead for Sapphire Glass today: GT Advanced Technologies (GTAT) and Rubicon Technology (RBCN). GTAT makes the furnaces to manufacture the sapphire crystals at a price tag of $500,000 while RBCN grows, cuts and polishes the wafers. GTAT is in the position of being an arms supplier to the industry while RBCN has the opportunity to displace Corning as a supplier of the screens. Either or both of these two companies could be a winner in this growing industry and the stock prices are just beginning to reflect it.
In the Tech Stock Jackpot recommendation service, we dive more deeply into the differences between the products, financials and the margin structure of the two businesses and companies. Additionally, timing of purchases and sales in addition to events and news flow.
Tracking the Jackpot,
Tom Anderson.
