Are You “In To Win?”

Keith Fitz-Gerald Oct 23, 2019

Let me ask you something…

… are you “in to win” when it comes to today’s markets?

I mean, REALLY “in” to win.

A lot of folks say they are, but their actions don’t add up.

Today we’re going to talk about how you can gain control of otherwise self-defeating moves and turn them into profit generating reflexes.

3 Reflexes you can use to generate a fortune…

First, you have to decide to be rich.

I don’t mean in a namby-pamby, boy-that’d-be-nice kind of way either.

You’ve got to see yourself being rich. Close your eyes and imagine what that looks like in 2 years, 5 years, 25 years.

What do you see?

For some, that means enjoying a life on the French Riviera or the Costa del Sol. For others, it means being able to buy a snazzy new car or pay for a child’s education, perhaps take care of your extended family.

For me, being “rich” means the ability to define life on my own terms. It means being able to take care of my wife, our boys, and our parents while having the economic wherewithal to enjoy doing the things we want when we want. Being “rich” also means having the capacity to donate money, time, and expertise to others who could use it through charities that are important to us, like the U.S. Navy SEAL Foundation and Pet Partners.

Everybody defines the term differently and should.

Second, you have to plant the right “seeds.”

Many people think they’re investing but, in reality, they’re speculating, so they never achieve the results they hope for.

Think back to 1986.

The Human Genome Project launched, Spain and Portugal became part of the European Community, later to become the European Union, the Iran Contra Affair broke, a Tandy 600 Portable Computer would have set you back $1,599, and Motorola StarTAC flip phones were cool.

Investors bet heavily on individual technologies like video cameras, portable tape players, CD and DVD readers even as then 30-year-old Bill Gates raised $61 million by taking Microsoft Corp. (NasdaqGS:MSFT) public.

Those things have all gone transistors up, but every $10,000 invested in Microsoft back then is worth a jaw-dropping $22 million today. Imagine what Microsoft shares will be worth a decade from now!

Obviously, there will be ups and downs, but one of the biggest single mistakes you can make today is to buy the fads when it’s the companies like Microsoft which continue to define our world because they’re creating new models, new ecospheres and new ways to fold themselves into your life.

There’s a role for speculation in your portfolio, but do us both a favor and don’t confuse taking a flyer on crypto-currencies, pot stocks, or the Iraqi Dinar with serious investing.

Being able to recognize the different is critical when it comes to the pursuit of profits, something many investors fail to understand.

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Third, you’ve got to constantly be “in to win.”

This is where most investors fail, albeit not deliberately.

They mean well, but really, they’re stumbling from one “defensive” move to the next often based on hot tips or “news” they’ve gotten who know where in an attempt to protect their money. What they don’t realize is that putting their money in a position where it can grow continuously is the better move.

Research from Barron’s a while back shows that 80%+ of all buy/sell decisions are wrong – meaning investors are buying when they should be selling and selling when they should be buying.

That’s backed up by DALBAR data every year which highlights that trying to second-guess the markets can half results or worse. The average equity investor, for example, lost double the S&P 500 in 2018 alone.

That wouldn’t be so bad if the results were limited to being out of the market when things sucked, but the problem was “compounded by being out of the market during recovery months.”

My own research agrees which is why, to the point of possibly sounding like a broken record, you hear me say that you have to be “in to win” if you really want to bank the big bucks.

So how do you do that, especially lately when the entire world seems like it’s trying to tear itself apart?

My favorite technique is elegant, simple and powerful.

You find today’s Microsoft …you buy as many shares as you can afford. Then, if it falls, you buy more.

Being “in to win” is your edge, not just a mantra I came up because it sounds trite.

Buy in to the “right” companies is the ticket and again, I mean the real game changers, not the schlock year hear about on late night television or read about as another one of Silicon Valley’s hustles.

As long as the original reasons you purchased shares in the first place remain – i.e. it’s tapped into one or more of the Unstoppable Trends, it makes “must have” products and services” and the stock’s share price has not breached the risk management levels you set the moment you bought in the first place – you and your money lean “in.”

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Microsoft Corp. (NasdaqGS:MSFT), incidentally, still meets every single one of those criteria. So do Apple, Alphabet and a dozen other companies just like ’em that I recommend in our paid sister services.

Then you’ve got Peloton Interactive Inc. (NasdaqGS:PTON), Uber Technologies Inc. (NYSE:UBER), GoPro Inc. (NasdaqGS:GPRO) and a slew of companies that have “WeWork’d” over investors while costing them hundreds of millions of dollars.

Peloton “sells happiness,” according to the company’s S-1.

Uh-huh.

Microsoft sold very specialized software and waited 11 years before going public to raise capital for an already viable and enormously profitable business.

Speaking of which, Microsoft reports earnings today – Wednesday after the bell – which if all goes according to plan with my publisher, should be just after you read this.

I’m watching three key areas:

  1. Azure – this is Microsoft’s cloud business, and it’s growing at double digit rates. I’m looking for at least 50% year over year but an annualized figure north of 75% wouldn’t surprise me.
  1. Office 365 revenues – the shift to a subscription software model may drive many users right up one side of the desk and down the other – including me – but it’s going to be regarded in the history books as a stroke of brilliance. I think direct sales rise by 10%, maybe even 20%.
  2. Backlog growth to $100 billion – meaning money that the company has contracted but which has not yet been recognized as revenue, just yet, will grow tremendously.

The initial trading should be higher as shorts “burn, ” then I expect it to fall briefly -perhaps even for a few days as short-term traders take profits from the run up into the earnings announcement before finally stabilizing and making way for still higher record profits.

Gobble up shares, then tuck ’em away for as long as you can.

The bottom line matters!

Until next time,

Keith

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