How to Turn Clown-Phobia into Cash

Written By Luke Burgess

Posted October 14, 2016

Dear America,

I didn’t think it would have to come to this. But you and I need to sit down for a little talk. Here’s the thing…

Despite what the other kids tell you at school, the boogeyman isn’t real. Gremlins and hobgoblins are fiction. And I think you know that. So I’m confused over your reaction to this whole clown thing.

What do you think is the most obvious answer to who is really going around dressed up as clowns and frightening people?

Do you really believe these people are actually dangerous? Or could it just be a bunch of idiot kids with nothing better to do?

Pennywise

Here’s what’s really going on with all this whole clown thing… and how I think we can profit from the larger issue…

The recent surge in coulrophobia (that’s the fear of clowns) has everything do to with xenophobia. Xenophobia has some pejorative connotation. But let’s just consider the term as a general fear of strangers or foreigners.

Every feature of a clown is exaggerated, which conceals the individual’s true identity. And without knowing someone’s true identity, you can’t know or even speculate on their motivations. That automatically makes them a potential threat.

This is essentially the basis of “stranger-danger” (a.k.a. xenophobia). And the clown represents the ultimate stranger.

But, of course, there’s also politics involved here. Anti-immigration advocates often leverage psychological xenophobia to push their agenda. And that’s simply because it’s easier to scare people into your way of thinking rather than reason with them. So the public has already been quite primed with xenophobic messages, especially in today’s comment-heavy news stories.

And, of course, this isn’t the first instance where the fear of strangers caused public uproar. Just a few years ago, the mainstream media had a field day turning everyone wearing a hoodie sweater into an out-of-control criminal.

I’d even argue that xenophobia is the very basis of why we consider it polite to remove hats indoors; a hat conceals your eyes, which could conceal your identity.

Xenophobia is probably the product of some deep-seeded human psychosocial anxiety, which I am sure has been analyzed in depth by psychologists. But I think we can say for sure that the fear of strangers is, in fact, a very real phenomenon in society. As Bob Dylan said, “You don’t need a weatherman to know which way the wind blows.”

So how do we profit from it?

Facial Recognition Technology

Facial recognition technology will not solve the issue of identity concealment. However, a continuing increase in xenophobia (as evidenced by the recent bout coulrophobia) could start to bring much more retail attention to facial recognition technology.

The technology is already being embraced by governments and industries around the world. The most conservative estimates suggest a 9.5% CAGR for facial recognition industry growth from 2015 to 2022.

Cameras used for facial recognition are already popping up everywhere. And despite what you might think, most Americans are in favor.

According to a recent CNN/Time poll, 79% of Americans supported the use of facial recognition at random locations and public events, and 81% supported the expanded use of camera surveillance on streets and in public places.

The technology has piqued the interest of many large companies, including Apple (NASDAQ: AAPL), Microsoft (NASDAQ: MSFT), Google (NASDAQ: GOOG), Cisco (NASDAQ: CSCO), and Intel (NASDAQ: INTC). However, there aren’t really any great pure plays in facial recognition technology.

There was one or two pure play facial recognition technology firms that started a few years ago but failed to find a good footing in the market as of yet.

Investors should look for companies advancing their next-generation facial recognition technologies and software as well as other personal identification technology such as fingerprint and retinal scanning.

Until next time,
Luke Burgess Signature
Luke Burgess

As an editor at Energy and Capital, Luke’s analysis and market research reach hundreds of thousands of investors every day. Luke is also a contributing editor of Angel Publishing’s Bull and Bust Report newsletter. There, he helps investors in leveraging the future supply-demand imbalance that he believes could be key to a cyclical upswing in the hard asset markets. For more on Luke, go to his editor’s page.

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