Orocobre is soaring – buy limit raised
14th July 2016 |
If you’ve been paying attention to the Frontier Tech Investor portfolio in recent months you’ll have seen – Orocobre has been soaring. It’s up more than 60% since I recommended it in early April.
The Supply Inelasticity Meets Rising Demand bullish scenario we had earlier identified with lithium miners, and particularly Orocobre, which is progressing nicely with the result that the share price is now well up.
You’re no doubt familiar with the fact that all of the handheld devices that we have become so attached to are powered by lithium batteries. However the evolution of the electric car market represents a quantum leap in the quantity of lithium required for industrial uses.
Tesla’s Gigafactory grand opening is on 29 July and, although it is not due to begin cell production until 2017, it is set to become a massive consumer of lithium. But Tesla’s operation is only one major factory, and there are a number of others also being constructed by competitors in Asia. They are all going to need lithium.
The mining sector has been through a painful process of rationalisation following the aftermath of the credit crisis. While the lithium sector specifically is now investing in new supply, it takes years to bring new mining and brine operations online; and in the meantime prices continue to rise.
The outlook for the competitive advantage possessed by lithium miners remains undiminished so it is time to raise the stop on this position from A$2.15 to A$4.
Orocobre has been ranging mostly below A$5 since early June, so I am also raising the buying range to between A$4.50 and A$5 because I believe the price is being primed for an additional breakout.
I’ve asked the team to change the Frontier Tech Investor portfolio to reflect this. (By the way, we’ve added a new benefit to the portfolio: simply click on the “date recommended” link next to each recommendation and you’ll automatically go to our original write up.)
Also, I’d like to share a piece on cybersecurity which research editor Mischa Frankl-Duval wrote this week. Given it’s only ten days since we added our first cyber play to the portfolio, it feels particularly relevant to us.
Best,
Eoin Treacy
Investment Director, Frontier Tech Investor
How to stop a digital 9/11
Mischa Frankl-Duval
The following article on cybersecurity is going out to Exponential Investor subscribers on Saturday, but since it’s relevant to the latest issue of Frontier Tech Investor, I wanted to show you first. It details the work of John Harbaugh, a former director at the US Department of Defense who’s turned his hand to protecting private companies from cyberattacks.
If you read that issue of Frontier Tech Investor, you’ll know a good deal about cybersecurity already. And if you bought Eoin’s tip, you’ll likely be learning lots more about the sector in the near future.
Some good early news, though. SAIC is up 2% since Eoin tipped it. Here’s hoping for much more.
Back in February, I wrote to you about Darktrace, the cybersecurity firm that protects companies like the immune system protects a human body. Unusual activity is flagged up, allowing the system to respond accordingly.
Darktrace lets hackers get momentary access to a computer system, then neutralises their threat in “soft real time” – normally under two seconds. That’s about 200 days faster than an average cybersecurity system detects an intruder.
But what if that’s not fast enough? What if you want to stop a hacker before they’ve peeked into your system?
You’ll need a human.
How to stop a digital 9/11
Darktrace was founded by former government spooks, people who had significant experience combating cyberattacks. The man behind American firm root9B is cut from the same cloth.
COO John Harbaugh worked in a number of prominent roles in the Department of Defense, leading teams at United States Cyber Command in Fort Meade. Few people know as much about cyber-defence as he does.
Harbaugh now works privately, but takes his job as seriously as he did when he was safeguarding the USA’s military networks – that much is clear from the name of his company:
“Root is system-level access. 9b is hexadecimal for 9/11”, Harbaugh explained to Vice. “It’s a nod to the fact that the next 9/11 event is most likely going to be cyber-related.”
Today, most hacks result in the theft of personal data; inconvenient, infuriating, but very rarely fatal. But we’ve already seen cyberattacks perpetrated by governments. Stuxnet – a worm believed to have been programmed jointly by US and Israeli operatives – was used to send Iranian nuclear centrifuges spinning out of control, damaging them beyond use.
In 2013, Iranian hackers retaliated, infiltrating the controls of a small dam 25 miles north of New York City. They had planned to release a torrent of water from behind the dam, with potentially catastrophic consequences, but the dam’s sluice gate had been manually disconnected for maintenance at the time of the attack.
Nonetheless, the attack served as a warning shot; cyberattacks were fair game. War was moving online.
root9B specialises in old-school hunting
Harbaugh and co are computer specialists, but they’re also military men. They don’t want to leave the job of cybersecurity exclusively to computers.
Instead, root9B gets human operatives to “patrol” client systems, analysing systems in real time, just as a guard would protect a military base. Harbaugh talks about his cyber-defence as if it’s still a military operation: he runs “hunt-operations” from a control room, “pursuing adversaries” on a military-grade console.
“In the physical space, you can have the best cameras, the best locks on the doors, the best alarm systems, the best fences… but at the end of the day a human’s gonna figure out how to get around those things. If they wanna get it they’ll get in.
“What’s the one thing they put into those physical spaces to augment all that great technology? They put a guard in there. If there’s going to be a human adversary that’s going to defeat your technology, you need to put a human defender in there that knows how to respond to that challenge.”
Essentially, root9B’s operations involve sending an operative into a client’s system, poking around for vulnerabilities and abnormalities in the same way as a hacker would – though without the aim of causing damage. But what does that actually mean? Can most people visualise cyber-defence in those terms?
Probably not. That’s why Harbaugh’s language is so useful. Cybersecurity firms love using the language of the physical world to describe their operations, because it makes the process relatable. Darktrace talks about a computing “immune system”, and provides visual representations that accord with that metaphor. Harbaugh’s military-speak does the same job.
Harbaugh’s language also serves to remind us how crucial cybersecurity is – and how much more important it will become.
“Breaches are happening. They’re not going away, they’re getting worse. Go all the way back to any point in history, the human will figure out how to get around the technology. The machine’s not smart enough yet. All these major breaches cost millions of dollars, millions and millions.”
That’s why Harbaugh’s aggression and doggedness are so key. Companies are now targets in a cyberwar that they had nothing to do with. And it’s not necessarily governments” responsibility to protect them.
“Instead of relying on the government to protect everything, because it can’t, we’re trying to take all the good things about what the government can do from a tech perspective, a human perspective, and an experience perspective, and bring that into the commercial sector.
“I don’t think it’s really important to the victim who’s doing [the protecting], they just want to stop it.”
Mischa Frankl-Duval
Research Editor, Frontier Tech Investor
