Why You Should Know About the 'Flippening'

The Great Frustration... Why you should know about the 'Flippening'... Massive changes in transportation and health care... An old dog learns new tricks... A lot can change in a few years...

Editor's note: Today, we're bringing you a special guest essay from Stansberry Research senior analyst Matt McCall. Adapted from a recent special report for The McCall Report subscribers, Matt explains how a convergence of "exponential technologies" will revolutionize industries in the years ahead in ways most people can't imagine...

Something is going on in America...

I call it "The Great Frustration."

We finally have the opportunity to dine out and travel again. We can see our friends and families. And most of the time, all of this can be done maskless.

But things certainly aren't back to normal.

Now, we're being faced with never-before-seen gasoline prices, record airline cancellations, and sky-high food costs. Milk prices are up nearly 50% in the last year, and egg prices have just about tripled.

But it's more sinister than that. Business owners reported $402,000 in property losses due to riots and civil commotion in 2019. In 2020, that number was $86 million!

There's nothing we won't fight over.

Late last year, the Institute of Politics at Harvard Kennedy School published a poll that found that half of voting-age Americans under 30 thought our democracy was "in trouble" or "failing." One-third said they expected there to be "a civil war" within their lifetimes.

Americans of all ages are more frustrated and less motivated than ever before...

Still, in many ways, our lives are better than at any other time in history...

Global incomes are higher. Our lifespans are longer. Literacy is up. Poverty is down. Violent crime has been cut in half since the 1990s. And communication is 100,000 times cheaper than it was 100 years ago.

But simple things – like seeing a doctor, getting your car fixed, or simply making more money for the lifestyle you want – are still so frustrating.

If you've felt this deep, collective, national frustration... you're not alone.

But the root of all these problems is not politics, values, gender, or race. It's money. It all comes down to economics.

An economic phenomenon is at the heart of all of this. It's something that could have more dramatic implications for your money than inflation, Social Security failure, a mental-health crisis, or war overseas – combined.

What's happening is what's known as the 'Flippening'...

In the years to come, anyone who doesn't fully understand what's going on will undoubtedly be left behind in all the ways one can be left behind – financially, socially, and even physically.

Nearly 40% of today's elite publicly traded companies – brands you've known and used your whole life – will go bankrupt because of the Flippening. And they'll likely lose fortunes for their investors.

If you think you're frustrated now, you can't even begin to imagine how hard life will be for you and the masses of people who don't pay attention to the situation playing out.

So... what is the Flippening?

Moore's Law states that every two years, computing power grows twice as strong while its price remains constant. In other words, computers are constantly doubling in power.

That means that every two years, things like the blockchain, robotics, and 3D printing get more and more powerful – without getting exorbitantly more expensive.

These are "exponential technologies." They're doing amazing things in their own realms. But they're merging with other technologies in ways we never imagined...

Single exponential technologies revolutionize markets – like how our cellphones made landlines essentially worthless. But when exponential technologies merge, magic happens. And industries are completely reimagined.

That's what we're going to see happen in the coming months and years.

Let me give you some examples...

The transportation industry is already in the midst of a massive Flippening.

Electric vehicles ("EVs") will soon take the place of internal combustion engine ("ICE") vehicles. So naturally, traditional gas stations will need to be converted into charging stations.

The National Association of Convenience Stores currently counts more than 145,000 fueling stations across the United States. Most are convenience stores that sell fuel. Meanwhile, there are 108,000 public charging stations.

Those figures may sound close, but a lot more charging stations will need to be installed as the Flippening plays out.

It's estimated that there will be between 25 million and 50 million EVs on roads in the U.S. by 2030. With only about 2 million EVs registered in the country today, the need for more charging stations will increase by 10- to 20-fold over the next decade.

If we just consider a projection from auto-repair website Jerry's Auto that we'll have 35 million EVs on the roads by the end of the decade, that means we need to install nearly 500 charging ports every single day over the next eight years.

But that's not the only Flippening taking place in the transportation space. Not only will ICE vehicles "flip" to EVs... but several other technologies are also set to transform how people get from point A to point B.

Enter air taxis – also known as electric vertical takeoff and landing ("eVTOL") vehicles – autonomous vehicles ("AVs"), hydrogen-fueled airplanes, next-generation battery technology, and sustainable air fuel.

An old dog learns new tricks...

To get an idea of how some of the legacy auto manufacturers are embracing the transportation industry's Flippening, let's consider General Motors (GM).

The company currently estimates that it will bring in $280 billion in sales by 2030 – up from $127 billion in 2021. But it's the actual breakdown of that number that's especially exciting.

EVs are estimated to generate $90 billion in sales – up from $5 billion today. AV ride sharing will account for $50 billion, and services and subscriptions related to vehicles will reach between $20 billion and $25 billion.

You can see how General Motors is embracing the future. And it's not alone. Nearly every single legacy automaker has finally realized that there are only two paths forward:

1. Stay in their current lane and get run out of business...

2. Or adapt to the future of transportation, concentrate on EVs and AVs, and get in position to rake in the trillions of dollars coming from the inevitable Flippening disruption.

It's not just AVs and EVs, though. Air travel is an often-overlooked niche within the transportation industry when it comes to innovation. But that innovation has begun – the industry is already starting to invest more and more money into several new technologies.

For example, eVTOL companies have been signing billion-dollar deals with major airlines to provide "flying cars" for short-haul flights. I'm talking about quick and easy travel between New York City and Boston or Los Angeles and San Diego.

Aerospace company Lilium (LILM) will provide 220 eVTOLs for major Brazilian airline Azul (AZUL) – a deal worth up to $1 billion. American Airlines (AAL) is spending up to $1 billion to buy as many as 250 eVTOLs from Vertical Aerospace (EVTL). And Archer Aviation (ACHR) has received funding as well as a $1 billion order for 200 eVTOLs from United Airlines (UAL).

The air-travel industry is also looking to flip the long-haul travel space by testing out hydrogen- and battery-powered aircraft. And in the meantime, airlines plan to adopt more sustainable fuel to lower emissions.

Elsewhere, the health care industry is experiencing a similar Flippening...

Going to the doctor has only become a bigger hassle in recent decades. It used to be that there was a local doctor in town that everyone knew and trusted. And they were always available. Today, you have to schedule an appointment – sometimes weeks or even months in advance – and sit in a crowded waiting room full of sick people.

The pandemic pushed things forward by accelerating the use of telehealth. The industry boomed as people were forced to connect with their doctors remotely. You can see the huge COVID-related spike on the chart below. While the numbers have pulled back from the pandemic high, the long-term trend remains positive.

This is the health care Flippening. Crowded, uncomfortable waiting rooms will become a thing of the past... and patients will instead meet with their doctors using video chat on their smartphones and computers.

Now that people have seen how telehealth can save them time, money, and energy – all while keeping them out of harm's way – this trend will continue to flip the traditional practice to the future.

And just because this trend is already underway doesn't mean that it's nearing its peak...

Only 11% of U.S. consumers had used telehealth prior to the pandemic. Now, 76% are interested in using remote services.

According to consulting firm McKinsey, medical providers saw a 50X to 175X increase in telehealth visits during the pandemic. About 64% of providers say they're now comfortable using telehealth – which leaves about one-third that have yet to embrace the new technology.

And let's also consider the size of the market. Prior to COVID-19's spread, telehealth providers had an estimated total annual revenue of $3 billion. The health care industry is incredibly large, and as more practices embrace telehealth, the amount of money flowing into the market could reach $250 billion. That's 80X the pre-pandemic level.

I could go on and on with examples. But the point is clear...

What's coming is exponential and unstoppable. This is the Flippening.

Before long, we'll have things like the smart grid – which will prevent tens of thousands of people from losing electricity or heat during weather events every year. We'll have connected health care that alerts you before a heart attack. And we'll have autonomous flying vehicles that will make everything from rush hour to devastating car accidents a thing of the past.

Right now, that sounds as unrealistic as the idea of carrying around a computer in your pocket before the introduction of the smartphone. But a lot can change in a few years.

These innovations are coming to relieve our frustrations – and they're going to create fortunes. In fact, they present some of the best moneymaking opportunities we'll see in the coming decade and beyond.

That's why I just published two all-new reports that tell you everything you need to know about what's happening. Alliance members and other subscribers to The McCall Report can read "The 2022 Flippening Blueprint" and "The Flippening Failures." In these reports, I lay out exactly which companies will thrive – including their names, ticker symbols, and buy-up-to prices – as well as those that are likely to fail.

Don't miss out on this chance to get ahead of what's coming. Click here to get all the details now.

52-week highs (as of 6/22/22): None.

In today's mailbag, feedback on Thomas Carroll's Wednesday Digest, noting another way to get portfolio exposure to the cannabis industry... Do you have a comment or question? As always, e-mail us at feedback@stansberryresearch.com.

"I elected not to invest in the [cannabis] companies, but in the facilities they grow in. Up over 100%... and got all the money out and still cash flows!" – Paid-up subscriber Tim P.

Here's to the future,

Matt McCall
Baltimore, Maryland
June 23, 2022