First, the trading notes. How many times have you heard me talk about not letting emotions dictate your actions and not locking yourself into a set analysis vs. being free-thinking and opportunistic? Color me flexible — I think $TWTR is probably a good trade to the long side for the next few weeks. http://www.scutify.com/company-sentiment.html?ticker=TWTR. Even after all my bearish analysis on Twitter, methinks, it’s overdone near-term by the panicky longs and growling shorts.

I’m going to buy a few Twitter call options dated out about a month or two away into June and July, with strike prices at about $38-40 or so. Using a tiny bit of money on this very speculative short-term sentiment gamble. If I’m wrong, I’ll lose 100% of the capital. If the stock pops back to $40 or $45 in the next few weeks after this secondary and momentum fleeing trade is over, we’ll catch a double or triple on the trade. Very risk as always when we use options, especially short-term out-of-the-money options.

I am also going to add another 1/3 of a full position to both JDSU and INVN, following my playbook of using market moves to my advantage as best as I can.

Now, onto today’s Drone Revolution report. I’ve been digging into every report and prediction and model for drones — unmanned flying devices and vehicles — and nobody’s got their arms around just how big this market is actually going to get. I’ve seen estimates ranging from a few billion dollar potential market to over a nearly $100 billion over the next few years. Here’s one report, from Darryl Jenkins, a long time airline analyst, and Bijan Vasigh, a professor of economics at Embry-Riddle Aeronautical University in Daytona Beach which was paid for their “bullish” report by the Association of Unmanned Vehicle Systems International, an industry trade group. They say the market for commercial and non-military drones will top $13.5 billion within three years, and will grow to more than $80 billion between 2015 and 2025, during which more than 100,000 well-paying jobs will be created.

Big deal, I say! You see, the biggest problem that all these predictions and models for the Drone Revolution have is that they can’t account for the brilliant, innovative and ever new uses that unmanned aircraft and smaller remotely- or automatically-controlled devices will be used for in the future.

Imagine how much extra bandwidth, especially upload bandwidth, is going to be required to stream and send all the video and data and mapping and pictures and who knows what else from the drones to the cloud and onto people and enterprises as the end users.

How many camera components, how many geo-location components, how many gyroscopic components, how many communications components (and will we be using 5G or 6G wireless broadband to deliver that bandwidth in five years and in ten years)?

How much solar panelling is going to be sold and how much more efficient will solar and water-based hydrogen fuel technologies be in another decade as these ever more mainstream drone applications and drone markets are created over the years?

Do you remember how often I used to tell you that the App Revolution was going to create “the largest market in the history of the planet?” I even called my articles that very name, and in them I explained the burgeoning opportunity in smartphone and tablet apps.

http://blogs.marketwatch.com/cody/2010/08/08/the-app-revolution-the-biggest-market-in-the-history-of-the-planet/

“Billions of people, trillions of apps, and un-count-able app transactions, interactions, and entertainments and games played…there are going to be a lot of winners and a lot of money to be made by those winners.  The app revolution is an opportunity I’m taking very seriously with my time and money and I think any serious investor should be too.”

Well, drones too, will literally be interacting with billions of people every day and will have billions of different uses, accounting for trillions of annual interactions with drone technology in every facet of our lives. I expect that the broader drone economy will reach a trillion dollars annually in a decade. And that we’ll see at least a trillion dollars of market cap valuation created by that drone economy over the next ten years too.

A few weeks ago, I added JDSU and INVN as two “undiscovered” and still very-early ways to invest in the coming Drone Revolution and both stocks have been hit in the momentum downturn that the broader markets experienced since then. It’s not like I expected these stocks to suddenly be recognized a Revolutionary Investments, as it will likely be a five to ten year time horizon that I plan to own these stocks for. I’d also like to add a couple more names in coming months, and in a few years, there will likely be some drone-centric companies coming public that I’ll look to scale into. For now, I am personally going to add another 1/3 of a full position to both JDSU and INVN, following my playbook of using market moves to my advantage as best as I can.