Editor's note: Seeking Alpha is proud to welcome Tobias van Gils as a new contributor. It's easy to become a Seeking Alpha contributor and earn money for your best investment ideas. Active contributors also get free access to the SA PRO archive. Click here to find out more »
Investment thesis:
Cybercrime is one of the most pressing issues globally. Cyberwarfare, state-sponsored attacks, IP theft, Identity theft, and network compromises will continue increasing. In this fast-pacing industry, picking individual stocks is very risky. A single breach can bankrupt the responsible cybersecurity firm. We recommend ETF investing, thereby gaining exposure to a rapidly growing industry, without being exposed to the risk of a single stock collapsing. In this article, we'll discuss the First Trust NASDAQ Cybersecurity ETF (CIBR) and ETFMG Prime Cybersecurity ETF (HACK)
Market Overview:
Last September, research firm MarketsandMarkets issued a report on the cybersecurity industry, in which they estimated a 10.2% CAGR until 2023. Cybersecurity is a necessity amongst all industries and entities as well as all individuals. More than 4 million records are stolen on a daily basis, resulting in more than 12 billion records being stolen in 2018 alone. As of writing, more than 60 million US citizens have already been impacted by identity theft.
2018 has been marked by the some of the following events:
- The Facebook (FB) data scandal. Political data firm Cambridge Analytica collected the personal information of approx. 87 million Facebook users.
- Aadhaar, the 12-digit unique ID of every Indian citizen, had a data breach. More than 1.1 billion personal records were compromised.
- Global news about multiple industrial firms having their intellectual property stolen. Affected firms work in the military defense industry, technology and manufacturing industry, as well as many other key industries.
- An increase in malware and cryptojacking on personal computers.
