Weekender: Video Edition
I’m frequently asked if it’s still possible to find huge winners in today’s stock markets.
Many investors don’t believe it’s possible now that the bull market is a whopping 3,100 days old, and many of the best-performing stocks are already household names.
They couldn’t be more wrong.
Not only is it absolutely possible to find the market’s next monster profit-makers – it’s also very simple if you know what to look for.
You can do it!
Scoring huge winners is not about being part of some super-secret Wall Street club or being an insider in Silicon Valley. What’s more, it doesn’t take a huge amount of money to make money, like many investors believe.
The secret is in understanding how to identify the difference between a company making just “cool, nice-to-have” stuff and one offering truly “must-have” products and services the world can’t live without. The former is a risk you don’t want, let alone need. The latter is where you and your money want to be.
Let me give you an example.
Millions of investors were enamored with these companies in the lead-up to their Initial Public Offerings (IPOs for short). They both offered new gee-whiz technology that would allow users the ability to track and record their lives.
Sadly, most got taken to the cleaners for reasons I outlined in articles at the time when I encouraged you to avoid both companies like the plague.
Today, Fitbit has fallen -87.37% from its peak while GoPro has tanked to the tune of -89.23%. Had you invested $10,000 in each, you’d be left with only $1,263 and $1,077, respectively. Ouch!
How could things go so “wrong?”
Well, it’s because they were never “right” from the start.
Fitbit and GoPro offer nothing more than “nice-to-have” technology. They’ve got plenty of competition, and the social impact hyped up as part of the IPO process was an illusion cooked up by Silicon Valley insiders to get you to buy in… and make them millions, even as they separated millions of gullible investors from their money.
Contrast that with companies we talk about all the time including Google – now Alphabet Inc. (NasdaqGS:GOOGL) – Amazon.com Inc. (NasdaqGS:AMZN), Facebook Inc. (NasdaqGS:FB), and Apple Inc. (NasdaqGS:AAPL).
Each of these companies is a “must-have,” with technology that can literally change the world… and a business model to go with it. Most investors are missing that connection, especially when it comes to easy-to-misunderstand devices, like Fitbit’s and GoPro’s cameras.
The best part is that all they have to do is tweak a few lines of code to add millions of customers and billions of dollars to the bottom line. In fact, that’s what makes them really valuable.
Apple is getting ready to pivot into medical devices. Alphabet is working on everything from self-driving cars to medical data. And, Amazon… ooohhhh Amazon… is almost single-handedly creating an extinction-level retail event for conventional brick and mortar retailers.
“Nice-to-have” companies like Fitbit and GoPro have cost investors millions, but “must-have” competitors are making investors billions.
I say grab your fair share.
Or somebody else will.
Until next time,