Rally On, Traders!

There's two huge booms reverberating simultaneously through the global economy today. There's what we call "the green gold rush," which is the state-by-state deregulation of once-banned agricultural products, and then there's the emergence of the digital "chain" that supports high-tech innovations from new currencies to smart contracts.

Each on its own is a dynamic theme every investor needs to appreciate. Both together is a proposition that only a visionary company like Codebase Ventures (CODE in Canada, BKLLF in the States) can hope to achieve.

That's right! CODE just announced that they're going to focus on the green theme and also the chain. What that means, I'll let you read the press release and judge for yourself. 

Management knows the sector. The CEO and a member of the board of directors helped build green gold companies like Supreme Pharmaceuticals and 1933 Industries. They've got deep relationships and intimate knowledge of where the money is moving. 

Wherever they see opportunity, you can bet they'll grab it. Right now they're especially interested in the technology that's going to drive the industry now that Canada has legalized from ocean to ocean . . . although with strict rules that every would-be player needs to obey or become a painful example of the high cost of compliance lapses.

(I've been watching one green gold stock drop a harrowing 55% in the past month because they couldn't track every ounce of their output. The point has been made. Nobody else in the business wants a similar fate.)

So CODE is looking at compliance technology, better ways to track every ounce from seed to store. That's the second part of the equation, the CHAIN.

CODE has two big points in its favor. First, there's its next-generation media validation service Pressland, which has a simple but radical take on the proliferation of propaganda across modern social networks. The networks are spending a fortune on algorithms designed to weed out obvious disinformation. Why not train a few actual human beings to do the work better and more intuitively?

After all, humans face to face can pick up "tells" that get lost online. We can see liars get fidgety or change the subject. Pressland's staff of reporters and journalists are experts in reading the equivalent signs in a news story. 

They've seen all the short cuts and fakes. And they know how a fake fact spreads to poison otherwise reality-driven reporting. Think of them as medical researchers on the watch for hints of infection that can lead to the epidemic we find ourselves in today. 

You know what I'm talking about. One of Silicon Valley's giants was a $600 billion company a year ago before word got out that fake news operations were using its ad platform to spread lies around the world. Supposedly they're responsible for everything from the Brexit on down. Today that onetime giant has been pounded 20% below its peak and there's no sign it will recover its record-breaking ways any time soon. 

That company has spent a year apologizing. They're spending a fortune on algorithms to prove that it will never happen again. Unfortunately, it's hard to regain trust, especially when the old algorithms helped feed the abuse in the first place. And even if the problem is solved, it's come at a huge cost: earnings growth has slowed to ZERO. 

But the problem is more than just one of the giants. Google has had plenty of run ins with regulators on both sides of the Atlantic over ad-supported hate messaging on YouTube and elsewhere. Twitter has had to purge millions of troll accounts that only exist to spread lies. Even mighty Apple covets the news business as part of its long-term plan, but has yet to crack the nut of avoiding pranks and propaganda.

Giant after giant just can't keep its news feed straight. That's where CODE and Pressland come in, as a third-party failsafe to make sure the algorithms don't screw up while letting all the good information through. What will the world pay for that clarity? We'll find out.

Pressland licenses seem to work like password validation or the PIN on a credit card. Once a story is cleared (the facts are checked, so to speak), it's ready to distribute through "clean" media channels. Every step along the way is certified and compliant, cutting off loopholes where fakes can flourish.



Apple News has 85 million users already. For every one that upgrades to the $10 monthly Plus plan, there's a lot of money to make sure every source is clean. Even if they all contribute just $0.01 a month to a service like CODE's Pressland, you're looking at mighty real money. (And remember, Apple can always write the check itself in order to protect its squeaky reputation. They avoided the social networks' missteps and don't want to repeat them now.)

CODE says the system will cost about $1 million to develop. That's literally $0.017 a month for each of 85 million users . . . achieving ROI by Day 31. After that, it's a cash machine. Of course, if the other Silicon Valley giants or even traditional Big Media want to certify their content as well, the payback ramps even faster. 

How big and how fast? It's not hard to imagine every single "news" message in your feed authorized by a little bit of CODE technology one day. That's a lot of messaging and a lot of automated checks kicking out the fake news while letting the rest go through.

Of course that's more than the current checkers can handle today. Don't despair. There's a big slice of automation here ensuring that the system learns from the Pressland team when it comes to deciding what content is good and what isn't. 

And that's the second piece of the CODE proposition. They've got an interest in an artificial intelligence and validation company Arcology and were so happy they just raised their stake to 30% of the whole platform.

That's a big deal because Arcology is a player in what computing people call "the 'chain." It's what makes new currencies run, sets up smart contracts, validates ownership of pictures, all kinds of wild high-tech applications.

Arcology's chain can easily fuel a whole lot of machine learning in the news industry, teaching a new generation of algorithms what the Pressland people have been trained to do personally. (VIDEO)

Think about that content generation process in the picture up there, then apply it to the green industry instead. If Arcology can check every link in one "supply" chain, they can do it with others. Everything literally runs by the book because Arcology IS the book. And CODE owns a big piece of the book now.

I admit, CODE wasn't even on my radar a few months ago. It only cleared to trade in the US as BKLLF at the end of February. But now, it looks like the sizzle stock of choice for anyone following the media controversies.

You know Wall Street appreciates "disruptors." Uber and Lyft disrupted old-fashioned taxi business. Social media itself disrupted the way we talk to each other and share information. And online search changed advertising forever. Those are billion-dollar businesses now with their own growing pains.

CODE is brand new and looking to disrupt the disruptors. It's starting with the content we share, the news feed Apple craves and Google already curates obsessively. Would Google pay $0.01 per click to make sure that news feed isn't going to get it in trouble with Europe or Washington? 

It's a no-brainer to me, but then, I don't work there. Giants like that tend to simply absorb small competitors before they grow into big ones, so there could easily be an M&A exit here for early-stage CODE shareholders. 

But on that side, I can't think of a Big Tech or Big Media player who would want to let a rival set itself up as the ONLY CODE-approved news source on the planet. More likely that they'll simply give Pressland room to set up as a neutral arbiter, something between a credit scoring agency and the old Hollywood movie ratings board.

Remember the MPAA and how it held a lock on movie theater standards and practices for generations? That's what CODE can do in the war on fake news. 

Or think of the credit scoring agencies again. They don't issue the cards just like Pressland doesn't write the news or edit the feeds. But they make a whole lot of money in between all the feeds, at the stage of the process where everyday people make a decision. In the credit world, that's the decision of who's worth credit and who isn't. In tomorrow's news ecosystem, that might just be who's worth READING and who isn't.

All of this is down the road, real future stuff. Here and now, CODE says the ante is just $1 million to get moving. That pays for itself with the first Silicon Valley giant that realizes there's no reason to get tangled in yesterday's algorithms. Everything beyond that point is pure wow.

Remember the ticker: CODE in Canada, now BKLLF in the States.




Happy, Happy, Happy Trading!