InsideMarket ended February, up 18.65%

Life has been crazy busy!

I started writing this update on the first of March and finishing it 10 days later!

In my defence your Honour, I have been involved in selling one of our businesses and preparing for our exciting interview/research trip at the end of March.

Excuses out of the way.

In this blog I cover:

• InsideMarket Private Fund's February performance.

• Why we're out of Fastbrick Robotics....for now.

• Our trip to the Silicon Valley of the middle east: Israel.

FEBRUARY CORRECTION & TECH BLOW BACK

The February share market correction; negative blow-back on the tech sector caused by the Getswift/Big issues; often-confusing and contradictory media coverage; and an arguable over-reaction by the ASX on disclosure, took the shine well and truly off the tech sector and almost all of stocks we hold.

We took a $60k hit on Getswift but are still holding 15K of shares that are $35K under.

I have had more fun.

That aside, the slump also presented buying opportunities which I will cover in a moment.

As for the correction itself, I am not going to pretend I have the right answer as to why it occurred.

Certainly wiser heads will tell you it was due to:

Interest rate hikes

Not due to interest rate hikes

Overvalued companies in USA

70%+ companies beat their earning predictions so not overvalued

Machine buying and selling.... blah blah blah.

We are clearly in a more challenging time than the last six months.

I am not a nervous investor but if I was, I might consider reducing my exposure.

Although it is hard to see a logical reason for a major correction on the short-term horizon.

There will be more bumps ahead as well as opportunities. The key is to constantly keep testing your belief in the companies you are invested in. A friend who runs a large Fund sent me legendary trader, Dennis Gartman's 22 rules of trading.

For these times I like #6.

"Markets can remain illogical longer than you or I can remain solvent........Illogic often reigns and markets are enormously inefficient despite what the academics believe."

We took advantage of the pullback in the share price of Linius (ASX:LNU) and also saw an opportunity to top up our position in our second largest holding, Titomic (ASX:TTT).

My recent interview with CEO of Linius, Chris Richardson, reaffirmed my belief that we will hopefully see some movement there soon.

I also spoke with Titomic (prior to Executive Director Simon Marriot's surprise departure) and was told the installation of the two additive printing robots remain on track, although they are holding back on an official launch for strategic reasons.

Apparently, they're trying to snare a Federal minister or two for the ceremony and are working around Parliament sitting days.

Made sense to me.

ISRAEL - THE SILICON VALLEY OF THE MIDDLE EAST

My trip to Israel is shaping up well after securing several C-level interviews.

I will be chatting with the CEO's of Elsight (ASX:ELS), Weebit Nano Technology (ASX:WBT), Ultracharge (ASX:UTR), AudioPixels (ASX:APX) and Cortica, which sadly is not listed.

We currently hold Elsight, which is a video streaming on-the-move software business.

They have irons in fires as diverse as autonomous vehicles, drones, security and telemedicine. There system works in such a way that you can virtually never lose a video-stream signal and that stream is military grade secure, 24/7.

We are also interviewing the CEO of an amazing company Elsight is working with, called Cortica.

Elsight and Cortica are a great fit, because Cortica has developed what it claims is "Autonomous AI [which] comprehends concepts and context and provides task generalisation and predictive power."

In simple terms, Autonomous AI that enables machines to think, see and learn like humans.

It is also video-feed agnostic, so it can be plugged into any live-streaming camera.

That's cool and scary.

Weebit Nano is working on an alternative approach to meeting the massive digital storage demand, as things like AI and autonomous cars keep rolling out.

With Weebit Nano, think 4DS Memory, but a little different.

Ultracharge is in lithium battery technology and claims it's tech can take a 60 minute phone charge to just 6 minutes.

AudioPixels is developing a revolutionary approach to audio speakers, claiming it will change speakers in the same the way computer monitors and TV's where revolutionised by flat screen technology.

Israel will be a fascinating trip and one that will hopefully be incisive and useful to us all.

WHAT'S THE DEAL WITH FASTBRICK?

I have had a number of people write regarding our our exit from Fastbrick Robotics (ASX:FBR)

I believe it is a company with incredible potential and I think it is a fantastic investment opportunity, but given my strategy, just not right now.

I am applying an aggressive approach, hunting for shorter term, medium to large returns.

Hence my temporary exit from Fastbrick and substantial entry into Linius.

This is purely for timing reasons and not any lack of faith in Fastbrick's ability to be a global force in exterior all-weather robotics.

As Mike Pivac CEO of Fastbrick said in his recent interview with InsideMarket, "Caterpillar (their strategic partner and an investor) is a lot slower than Fastbrick." Play relevant segment below from Jan 1oth 2018

Given the complexity of their joint venture to build two robot brick laying machines with CAT, I have taken a punt on the video virtualization software business of Linius yielding fruit sooner.

Being software-driven (no moving parts like Fastbrick!) should make Linius' execution easier and quicker with Proof of Concepts for potential customers.

My thinking is they therefore should tick off a couple of the last self imposed major milestones sooner rather than later.

Chris Richardson, CEO of Linius told InsideMarket recently "I think there will be some exciting announcements VERY soon around the scalability of Linius." Play relevant segment below from Feb 26th 2018

Their recent Oklahoma State University Proof of Concept announcement

is one and if successful, will open up every University in the world as a potential customer.

Being able to search thousands of hours of archived video lectures to find just the parts you want and then have them assembled automatically into a nice little montage, all in seconds, should be pretty appealing.

There are more than 40 thousand USA universities alone.

If Chris is right about Linius, and I about Fastbrick, I will hopefully not miss the next kick in Fastbrick, and will maximise my return from Linius.

I will then take some profits from Linius and apply them to Fastbrick.

WHAT LIES AHEAD

As for the month of March I see a couple of interesting possibilities.

On my radar is Kneomedia (ASX:KNM), which has developed some educational software for special needs children.

I have been wacthing them for a while but what really got me interested now is two fold.

1. They claim a 100% conversion rate from trials to paying customers.

2. The have been working on the 5 burroughs of New York but are now starting to roll out across North America and starting in Asia.

I am hoping to interview their CEO, James Kellet, in the next week or so.

Same goes for Painchek (ASX:PCK) and CEO Phillip Davas.

They have a phone app that can be used by anyone and reveals if if a person, like a dementia sufferer, is in pain.

It rates the level of pain and does so with a high degree of accuracy, a process normally requiring considerable training.

They are also developing an app for the parents of new born babies.

Overall, the month is off to a pretty flat start and our Fund is down on the past few months.

But, if I have positioned it correctly, that could change quickly and our Getswift/market correction losses will be disappearing in the rear view mirror.

If you have any ideas or questions you'd like explored with any of the companies or people we cover or are seeing in Israel, please let me know.

Also I will be appearing on Caroline Stephen's podcast, Talking Trading later this month. Will let you know the details. soon.

Happy investing.

Insidemarket does not offer any financial or investment advice. investing in technology stocks can be extremely risky. you should seek the advice of a registered financial adviser before investing.