Whitney Tilson believes America has reached its “Ripping Point.”
People on both sides of the aisle will blame this split on politics, but beneath the surface, something even more powerful is at play, a shift away from a world where human expertise is required to a digital society where machines can do things faster and cheaper, which is where “Ripping Point Riches” are made.
The Teaser
What we’re witnessing in America is what mathematicians call an inflection point or the moment when a curve permanently changes direction.
Former hedge fund manager and New York City mayoral candidate turned Stansberry Research senior analyst Whitney Tilson is a Greenbull regular. We have previously reviewed his “Top Stocks for the Nuclear Renaissance” and DNA Titan Company teasers, among many others.
The new world Tilson teases is the age of artificial intelligence, which is quickly replacing the information age.
He has a point, CNBC says that more than 80% of the stock market is now being run by algorithms, Amazon now has a robot to employee ratio of 0.5 to 1, and nearly 90% of large enterprises around the world now use some form of AI in their day-to-day operations.
For some, this change has meant getting laid off, while for others, it has consolidated decades-worth of market returns in only a few years.
This is the “Ripping Point” Whitney is referring to and as we can plainly see, it’s all too real.
Tilson expects this trend to not only continue, but accelerate in the coming years, saying we have a choice to make like we’re Neo in the first Matrix movie.
We can cling to our old ways, like those unfortunate souls who refused to sell their Blackberry shares as nearly every person they knew started to carry an Apple iPhone, or we can make disruptive technology work for us.
It sounds like a no-brainer and Whitney says he’s found an “edge” with extensive multiyear backtest results that has uncovered a few companies poised to not only survive, but thrive in the AI age.
The Pitch
Their names have been revealed in a new report called: Ripping Point Riches: The Seven Top-Scoring Stocks Set to Thrive in the AI Disruption.
There’s only one way to get it and it’s with a subscription to Whitney’s New Engine of Wealth (N.E.W.) System.
The “breakthrough AI-powered system” would normally set us back $499, but there is a special introductory offer being promoted of $149.
A New Way of Making Money
Most of us have probably asked ChatGPT, Gemini, or Grok to perform a simple task that would have otherwise taken us far more time.
Well, Wall Street has been doing a version of this for decades now.
Take the most profitable hedge fund of all-time, Jim Simon’s Renaissance Technologies, which has returned an otherworldly 40% since inception in 1988!
Renaissance is famously a quant, as Ryan Gosling’s character in the Big Short would put it, meaning it used math and physics to develop proprietary machine learning models that analyze financial data and try to predict market movements.
As you can guess, developing, coding, and testing such models isn’t cheap. Costs can easily run into the hundreds of thousands or more.
However, artificial intelligence has now almost leveled the playing field.
It can take dozens of fundamental and technical metrics that all play a part in how a stock ultimately performs and can not only teach us about them, but also use them to help us find the companies with the most potential, instantly, in real time.
Whitney’s N.E.W. System has figured out a way of understanding trillions of financial metric combinations and crunching them down into a single number – from 0 to 100.
In his own words:
The higher the number, the more potential the stock has for growth and vice versa
It scores all types of companies, as an example, it gave gold explorer Agnico Eagle Mines (NYSE: AEM) a score of 89, and it’s already up as much as 118% over the past year.
Now it’s flagged some of the most compelling opportunities in the market, as well as one stock to absolutely avoid. Let’s try to find out if any are likely to translate into “Ripping Point Riches.”
Revealing Whitney Tilson’s “Ripping Point Riches” AI Plays
Seven companies, one freebie, and a stock to avoid. Here is what we know…
The N.E.W. System’s number one stock to avoid is Rivian Automotive Inc. (Nasdaq: RIVN) due to its financial position.
The EV maker is burning through $2 billion in cash every single year, while already carrying $5 billion in debt. Keeping the lights on is getting harder, so it keeps issuing new shares, meaning every share is worth a little less than it was yesterday.
Now for the long picks:
Whitney’s top pick is disclosed at the end of the teaser as Allison Transmission Holdings Inc. (NYSE: ALSN), with a N.E.W. score of 82.
The AI buildout has pushed demand for exactly what Allison makes, automatic transmissions for heavy construction equipment, commercial trucks, and more.
Whitney’s other picks are less obvious:
- Nearly every Nvidia chip and every Apple iPhone chip is built by this company.
This is Taiwan Semiconductor Manufacturing Company Co. (NYSE: TSM).
- TSMC’s semiconductor foundry makes Nvidia’s Blackwell GPU’s, Apple’s iPhone, Mac chips, and many others.
The only other clues we get are for an “ultimate picks and shovels play that earns fees from virtually every major financial decision made anywhere on Earth” and a company hiding one of the largest real estate empires in America. Whitney says “it sits on virtually every street corner in this country, yet almost no one realizes what it actually is.”
If I had to guess, S&P Global Inc. (NYSE: SPGI) sounds like the ultimate financial picks and shovels play, while McDonald’s Corp. (NYSE: MCD) could be the hidden real estate empire, as it is one of the largest land and building owners on earth, and it’s on street corners in almost every city.
No clues on the remaining three names.
A Blueprint for Getting Rich from the Ripping Point?
Whitney’s claim sounds very familiar…
Make more money, while taking less risk, for a lower cost.
It’s more elusive than a wild snow leopard, but that doesn’t stop every investment newsletter and ‘researcher’ with an X handle from trying.
The N.E.W. System’s backtest results look solid, which is more than many algorithms and stock-picking systems can claim.
However, this is paper profits over a cherry-picked period of time, and not real results, which I would need to see from any system that I would consider letting compliment my own due diligence.
Stansberry Research admits on it’s disclosures and details page that:
The best thing an investment research product can deliver is a good idea that’s right for the market conditions and offers an overwhelming potential for success versus a moderate level of risk
So not so much a blueprint, but are the picks that we do know about good ideas at least?
Allison is a fair business that carries a bigger debt burden than I like to see, with $4.2 billion in obligations against only $400 million in cash.
The second, TSMC, is a great business, with a profit margin and return on equity of 50% and 42%, that others can only dream about.
At a forward price/earnings of 19x and price/earnings growth ratio (PEG) of 1.1x, I have little doubt that holders will do well over the long-term, as semi chips are a required component in drones, autonomous vehicles, and robotics. But at a market cap of more than $2 trillion, growth will be more moderate than the triple-digit gains showcased throughout the teaser.
Quick Recap & Conclusion
- Stansberry senior analyst Whitney Tilson is teasing “Ripping Point Riches” in a world moving away from human expertise to a digital society where machines do things faster, cheaper, and better.
- The “Ripping Point” is the age of artificial intelligence, which is quickly replacing the information age.
- Whitney has developed a New Engine of Wealth (N.E.W.) AI system that has uncovered a few companies poised to not only survive, but thrive in this new AI age. The names are revealed in a new report called: Ripping Point Riches: The Seven Top-Scoring Stocks Set to Thrive in the AI Disruption. It costs $149 to access for the first year (normally $499).
- The top pick is disclosed at the end of the teaser as Allison Transmission Holdings Inc. (NYSE: ALSN), we were able to reveal Taiwan Semiconductor Manufacturing Company Co. (NYSE: TSM) as his second pick, and we speculated about a few more.
- Allison is a decent business, but TSMC is the better pick at comparable multiples, although it’s a moderate, not an explosive grower.
Have you taken the N.E.W. System for a test drive? Let us know in the comments.