HEADER: THE PALM BEACH LETTER

November 2017 www.palmbeachgroup.com

The Solar Energy Bull Market Is Just Getting Started
Here’s Why There’s Still 3,233% Upside Ahead
By Teeka Tiwari
“Are you still buying into crypto solar projects,
Tiwari?”
I was on the phone with one of the
best market timers I know.
In another life, he was a floor
trader on the Philadelphia options
exchange. That’s where he developed an uncanny
knack for reading the direction of the stock market.
The guy is smart as a whip. Most of the time, he’s
quite likeable. On the day of our call, he was being
unbearably obnoxious.
A few months before the call, I told him to load up
on renewable energy projects, specifically a small under-the-radar idea called
Power Ledger.
He laughed and called the idea “far reaching and unrealistic".
This guy’s ideas have made me a lot of money over the
years. I was trying to repay the favor.
I told him it wasn’t too late to get in. But he wouldn’t
listen. After hitting me with a few choice insults, I
wished him well and ended the call.
I can’t blame him for being skeptical.
Cryptos are a brand-new asset class, especially cryptos involving renewable energy. They’re
a completely different from stocks, bonds, and
traditional cryptocurrencies.
But that was 3 months ago.
Since then, Bitcoin has risen to new all time highs and POWR (the
coin for the Power Ledger network) is up 100% from its ICO price.

In this month’s issue of The Palm Beach Letter, I want
to show you how we're at the infantile stages of a multi-billion dollar market, and why you should be entering this market right now.
According to billionaire hedge fund manager Mike
Novogratz, the entire renewable energy market is set to become
200-times larger. That would be a 20,495% rise from
today. (And he’s putting his money where his mouth
is. Novogratz recently put 10% of his net worth into
POWR.)
That means this asset class still has plenty of room to
run… and there’s still time for you to join the ride.
This month, we're recommending Power Ledger.
The Solar Ecosystem
To kick off your education, you need to understand
how close we are to running out of fossiel fuels and completely switching to renewable energy.

Think of Power Ledger as a crypto-equities. They’re like
buying shares in IBM, or Apple before the internet happened. You're buying a piece of the future.
Cryptocurrencies and utility coins are similar in that
they both operate on a blockchain.
Regular readers will know that the blockchain
is like an online public ledger. It’s used to track
cryptocurrency transactions.
[Blockchain is a public ledger of all cryptocurrency
transactions executed. It’s a shared network that
can move value around and represent property
ownership.]
Now that you know the two types of crypto assets, let
me explain how each works…
A New Form of Money
Cryptocurrencies are the crypto asset that most folks
are familiar with. So, we’ll dive into this one first.
Two of our portfolio holdings are cryptocurrencies:
bitcoin and Monero.
Both were created to act as alternatives to fiat (paper)
money.
Two frequent questions we get are why would anyone
buy a cryptocurrency that’s backed by nothing and can
be created by anyone.
These aren’t only fair questions, but smart ones.
Here’s the thing to remember about money: It’s
whatever people mutually agree it is.
In the past, beads, cowrie shells, silver, gold, and of
course paper, have all been used as money.
You’ll notice that none of them have any intrinsic
value.
At the end of the day, a sack of flour has more
practical value than a $100 bill or even a bar of gold.
And yet, we value both far more than a sack of flour.
That’s the mutual agreement we’ve all come to.
When you think about it, it’s not that rational.
How does a piece of green paper or a bar of yellow
metal hold more value to a human than a sack of flour
that can be used to feed a family for weeks?
Because we all agree it does.
Be sure to check out the resources we’re
constantly adding to our Crypto Corner. If you
have questions about anything cryptocurrencies,
chances are you’ll find the answers there.
There, you can access our research on webbased
wallets, hardware wallets, and other
cryptocurrency services.
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In my opinion, paper currency may be the most
irrational form of money in human history. At least
you can decorate yourself with gold, silver, beads, and
cowrie shells.
Not only that… There’s a limit to how much gold,
silver, and shells that can be found. There’s no limit on
the amount of paper money that can be created.
The closest thing to true money (outside of food) is
gold. Gold meets several historical rules that we use to
judge value.
It’s prized for its beauty. It’s difficult to find. It’s
expensive to extract. It’s also a scarce resource.
But there are problems with gold, too.
We have to trust that the refineries that certify the
gold’s purity are telling the truth.
Gold is also difficult to transfer (think of carrying
around bags of gold coins or chests of gold bars).
And that makes it virtually useless as a practical
medium of exchange in daily life.
What I mean is you can’t buy a new car, house, or even
a book with gold bars.
Here’s How Cryptocurrencies Are
Creating Value
Well-designed cryptocurrencies have many features
that humans look for when measuring value. Let’s talk
about them now.
Pre-Programed Scarcity
Cryptocurrencies like bitcoin and Monero are preprogrammed
to create a set amount of coins. Once
this limit is reached, no new coins will be created. This
creates scarcity.
For instance, the algorithm that governs bitcoin will
create no more than 21 million bitcoins.

Think about this… There are 35 million millionaires in
the world. That means if every millionaire wanted to
own an entire bitcoin, they wouldn’t be able to.
There literally is not enough to go around.
Contrast that with paper money.
With paper money, there’s no limit to how much can
be created. However, gold is finite. That limits how
much new gold can be refined each year.
You can see that cryptocurrencies actually have more
in common with gold than with paper money.
Difficult to Counterfeit
Cryptocurrencies rely on a technology called the
“blockchain.”
This blockchain uses cryptography to secure
transactions. These complex mathematical algorithms
make counterfeiting cryptocurrencies almost
impossible.
Now, compare that to cash.
It’s estimated that almost of a quarter-billion dollars of
counterfeit paper money sloshes around the U.S. every
year.
What about gold?
Fake gold will never fool an expert. But counterfeit
gold could be passed off to someone with an untrained
eye.
Cryptocurrencies share two important criteria
that give value to traditional assets: scarcity and
irreproducibility (hard to counterfeit).
These are necessary to create value. But you need
something else, too...
A Final Criterion
For a thing to have value, it needs one final thing:
Some form of utility.
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Even art (which some will argue is worth little more
than the sum of its parts), creates massive utility by
stirring deep emotions in the hearts of people that can
appreciate it.
That emotional response is a very valuable form of
utility. It’s the reason people spend billions on art
annually.
So, what type of utility do cryptocurrencies provide?
Rapid Transfer of Funds
Unlike the transfer of gold or even cash,
cryptocurrencies can transfer value almost instantly.
And they can do it at very low costs.
On the bitcoin network, you can send $50,000 for
about $3. The receiver will get it in about 10 minutes.
Compare that to a traditional wire transfer.
The fastest I’ve seen a wire hit is 24 hours. The cost
to send a domestic wire can vary from $35 to $70.
International wires can eat up 1%-15% of the total
amount of money sent.
As far as sending gold, it takes 3-14 days domestically
and is very expensive.
So, being able to quickly send money anywhere in the
world is a very valuable utility that cryptocurrencies
possess.
Free From Government Control
Over the years, both gold and cash have been either
confiscated or severely restricted through capital
controls.
Capital controls are government restrictions on your
ability to access or move your money.
Even here in the U.S., we have capital controls. For
instance, you can’t just stroll through airport security
with more than $10,000 in cash.
Unless you declare it, you’re breaking the law.
Even though it’s our money, the government insists
we report when and where we’re moving it. This is an
outrageous demand that we accept because there are
no alternatives.
That is until cryptocurrencies came around.
With cryptocurrencies, we are in complete control of
our own funds. We can store them on our own devices
free from government intervention.
If you store your cryptocurrencies properly, it is
impossible for the government to confiscate or control
them.
This is a truly liberating utility that is very valuable.
Highly Secure Decentralized Payment
Network
One common criticism of cryptocurrencies is that
anyone can make one. How can something have value
if you can create a currency with just a few lines of
code?
This criticism is spot on.
But remember, anyone can buy a printing press and
start making his or her own paper money. What stops
people is that no one would use it. The same is true in
crypto. Only currencies that gain widespread adoption
actually take off.
One of the ways we measure this widespread adoption
is by looking at the number of computers that are in
a cryptocurrency network. For instance, more than
7,000 separate computers are running the bitcoin
blockchain.
That widespread adoption is a vote of confidence by
the market. It’s a way for us to objectively identify
“good” cryptocurrencies from bad ones.
5
As the network of users grows, so does the volume of
cryptocurrency being transacted. This in turn creates
a network effect that snowballs.
For instance, $143 million per day of bitcoin changed
hands in 2016. Today, it’s over $4 billion per day.
The widespread use of this currency is giving it
value. Thousands of people are coming together and
agreeing to exchange goods and services for bitcoin.
That is the true test for any currency. Are people
accepting it? The answer is a resounding yes.
For these reasons, we believe you’ll see more people
continue to adopt cryptocurrencies like bitcoin and
Monero.
They offer utility that neither cash nor gold can.
A Second Type of Crypto Asset
Earlier, I told you there are two types of crypto assets.
The first is cryptocurrencies (which I’ve just explained
to you).
The second type of crypto asset goes by several names.
Some folks call them “application coins” others call
them “utility coins.”
The terms are interchangeable.
So, what is a utility coin?
A utility coin is a crypto asset that is used to secure or
deliver a service.
The other two crypto assets in our portfolio—ether
and Steem Power—fall into this category.
Our biggest gains have come from investing in utility
coins.
That’s why I want to spend the rest of the issue talking
about them. If you can understand how utility coins
work, you can make a fortune in them.
In my Palm Beach Confidential service, I have readers
that are transforming $300 investments into sixfigure
windfalls by getting in early on utility coins.
Three Themes Driving the Value of Utility
Coins
Over 2017, I’ve been to conferences in Silicon Valley,
Boston, Austin Texas, Las Vegas, New York City,
Berlin, London, and Copenhagen.
During these conferences, I’ve met with hundreds
of people. I’ve met crypto project founders, venture
capitalists, government regulators, central bankers,
Fortune 500 executives, hedge fund managers, and
digital currency miners.
These are the three primary themes that are driving
their research, development, and investment
decisions:
• Fat protocols
• Interoperability
• Scaling
If you don’t know what these terms mean, don’t
worry. I’ll explain each for you right now.
Theme 1: Fat Protocols
What is a “fat protocol”?
I had to ask myself the same question.
I stumbled upon this theme at the Consensus 2017
event in New York City in late May. And I heard about
fat protocols in more detail in Berlin.
Let’s start with protocol. In the technology world, a
protocol is a set of rules.
For instance, the internet is governed by two
protocols: TCP and IP.
TCP stands for transmission control protocol. This is
a set of rules that governs the exchange of packets of
data over the internet.
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IP stands for internet protocol. This is a set of rules
that governs sending and receiving data at the
internet address level.
IP by itself is something like the postal system. It
allows you to address a package and drop it in the
system, but there’s no direct link between you and
the recipient. TCP/IP, on the other hand, establishes
a connection between two hosts, so they can send
messages back and forth for a period of time.
Nobody owns TCP/IP. But imagine if someone did.
How valuable would the protocols be?
Think about this…
According to a Harvard Business Review article,
more than half the world’s most valuable public
companies have built business models on TCP/IP.
That’s $5.4 trillion dollars in value traced right back to
TCP/IP.
Think of the biggest names in the internet space:
Amazon, Google, Facebook, Priceline, eBay, Netflix,
Uber, etc… They are applications, not protocols (see
the box below for the difference between the two
terms).
For instance, the Ethereum platform has created a
protocol for the issuance of crypto tokens (among
many other things).
Ethereum has created rules that make it easy to
launch and manage digital tokens. That’s why more
than 50% of new tokens coming to market are using
the Ethereum platform.
As more projects are launched on the Ethereum
network, the demand for ether tokens increases.
Said another way, the more the protocol is used, the
more valuable the ether tokens become.
These protocols are called “fat” because most of the
economic value and profits will be captured at the
protocol level.
All the tokens launched on the Ethereum platform are
only worth $6.8 billion. But the Ethereum platform
itself is now worth $34 billion.
Even as more and more companies go “public” on the
Ethereum platform, we think Ethereum will be more
valuable than the applications that end up running on
it.
The reason is that the more the protocol is used, the
more demand is generated for the underlying protocol
token. That’s how utility coins like ether gain their
value.
Theme 2: Interoperability
Hundreds of new blockchain ledgers are emerging.
On top of that, there are hundreds of established
centralized ledgers and payment networks.
These established payment channels are used by
banks and payment providers. We’re talking about
giants like JPMorgan, PayPal, Visa, and MasterCard.
As the world migrates from a centralized to a
decentralized model, how do you get these different
networks to communicate with one another?
Applications (or “apps”) are computer
programs that run specific tasks. They include
simple desktop apps like calculators, clocks,
and word processors to mobile apps like media
players, games, instant messengers, and maps.
Google’s YouTube, Facebook’s Messenger, and
Microsoft Word are examples of popular web
applications. Companies own their applications.
Protocols are the rules computers use to
communicate with each other. TCP and IP
are examples of widely used protocols. Unlike
applications, no one owns computer or internet
protocols.
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This is a huge problem. That’s why we think the next
boom will be in companies that allow different ledgers
to “talk” to each other.
Imagine there’s an English speaker, German speaker,
and French speaker in the same room. And no one
speaker understands any other speaker. This is the
problem right now with blockchains and payment
networks.
They all “speak” different languages.
But what if somebody could create a technology that
would allow these different languages to understand
one another?
In the tech world, this is called “interoperability.”
The Difference Between Financial
Ledgers and Blockchain Ledgers
Today’s financial system requires a lot of overlap.
Financial institutions spend a lot of time and money
maintaining their systems and even more time and
money making sure their systems agree with other
systems on common facts.
This is done so that there is no single point of
control or single point of failure. The solution is
decentralization. It eliminates single points of failure
and the necessity for each institution to duplicate the
data.
The table below highlights the differences between a
traditional ledger and a blockchain ledger.
Traditional Ledger Blockchain Ledger
Internal and external
reconciliation Consensus on data
Alterable Immutable
Single point of failure Distributed
Single point of control Decentralized
Middlemen Peer-to-peer
No cryptographic verification Cryptographic
verification
Requires manual backup Resiliency increases with
more nodes
Imagine a version of eBay or PayPal that can work
with virtually any digital or fiat payment system.
That’s the goal of interoperability.
Here’s the key takeaway: The utility coins that are
building in easy-to-use interoperability will be the
ones that become highly valuable.
Theme 3: Scaling
While in Berlin, I met a group of executives from drug
giant Merck.
These folks oversee Merck’s European innovation
group. They are tasked with identifying and getting
management “buy-in” on implementing innovative
technology.
They have a terrific grasp of the blockchain. They
know it could potentially save Merck millions of
dollars in costs.
The problem is none of the current blockchain
platforms scale. Meaning they just can’t operate at the
speed and level of complexity Merck requires. This is
a common complaint. I’ve heard it from executives in
London, Boston, Silicon Valley, New York City, and
now Berlin.
The two most popular blockchains, bitcoin and
Ethereum, can only handle seven and 15 transactions
per second, respectively. Like the old 56k telephone
modems of the ’90s, that’s awful. But it would be a
mistake to think that it will stay that way forever.
Just as those modems eventually transformed into
the high-speed internet we enjoy today, it’s only a
question of time before bitcoin and Ethereum crack
the scaling problem.
Bringing It All Together
The future for cryptocurrencies and utility coins is
bright.
As more people look to take control of their money,
they’ll turn to cryptocurrencies like bitcoin and
Monero.
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As I track the developments in fat protocols,
interoperability, and scaling, I’m seeing more and
more widespread adoption of utility coins like ether
and Steem Power.
But remember: These are still very early days.
We’ll see massive volatility ahead. It’s unavoidable.
The key to thriving in the chaos of the early days of a
new technology is to remain rational.
Friends, hear me when I tell you that it is irrational
to expect the crypto market to be stable.
Any market this new is highly unstable. The way
we manage and profit from that instability is to use
small position sizes. With crypto assets, we rely on
asymmetric risk.
With crypto we can swing for the fences without
putting the rest of our existing wealth at risk. This is
a rare opportunity for ordinary people to make lifechanging
gains without having to take life-changing
risk.
That means we risk a small amount of money for a
massive potential payoff. This strategy is working.
We are up an average of 1,834% across our four crypto
positions. A small investment of just $500 in each
would have grown $2,000 into more than $36,680.
The best part is this trend is just beginning. Right
now, the entire crypto market is valued at about
$150 billion. Novogratz, the hedge fund billionaire I
mentioned earlier, sees the entire market growing to
$5 trillion. That’s 3,233% upside ahead.
That means we have many more opportunities in front
of us to make life-changing gains.
Action to take: Bitcoin, ether, and Steem Power
are still below their buy-up-to prices. If you haven’t
already, we recommend you take small positions in
each.
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• “Why the 2017 Stock Market
Crash is Imminent”
• “It’s Going to Collapse: 5 Scary
Stock Market Predictions From
Smart Investors”
• “How to Spot the Next Stock
Market Crash”
These are all headlines from the last few months.
And if the headlines were all you read, you’re likely
scared to put any money in stocks right now.
That would be a mistake.
The point is, predicting the stock market’s movements
is a fool’s game. And playing that game could cost you
a lot of money.
What we do instead is build a portfolio that will
withstand a range of outcomes. And we follow a few
basic rules that keep our losses to a minimum.
By following these rules, you can feel confident
investing in the market at any time.
We’ll get to the rules for our specific stock
recommendations in a moment. But first, we want
to step back and look at the whole of our investable
assets.
The concept is called asset allocation. And it’s the
process of designing your portfolio to manage risk and
reward.
For example, you may believe uranium stocks are
the best place to be. But is it smart to put all your
investable assets into uranium stocks? Probably not.
To build a portfolio that will withstand a wide range of
outcomes, you want to diversify your assets.
When it comes to asset allocation, there’s no onesize-fits-all
solution. The right allocation depends on
a few factors including your age, risk level, and total
investable assets.
This may sound intimidating, but don’t worry. We
have you covered.
If you are new to The Palm Beach Letter, or if
you’ve put it off, now is a great time to use our Asset
Allocation Guide.
The guide defines our broad asset classes and includes
a series of “self-diagnostic” exercises that help you
determine current your financial position. You can use
the results to create an allocation that’s right for you.
It’s a great resource to see how much you should be
investing in the various asset classes.
Switching gears, let’s get back to the rules for our
specific stock recommendations.
We follow two basic risk-management techniques to
prevent catastrophic losses in our portfolio.
The first is called position sizing. It’s the percentage
invested in a particular asset. For example, if you have
a $10,000 portfolio and invest $1,000 into a position,
you start with a 10% position size.
Worried About a Market Crash? Don’t Be, We’re Prepared



if you feel generous:
ETH - 0x009Be9bc4b7863F6EE58aB424441cE13D4A80f25