By Matt McCallFeb 09, 2020
“Invest in what you know.”
It’s one of the nuggets of wisdom passed down from investing legend Peter Lynch.
Lynch was one of the most successful investors of the modern era. He ran the Magellan Fund at Fidelity for 13 years and was so successful that he retired in 1990 at the ripe old age of 46.
As an investor who not only scours the numbers and charts, but also takes the time to do the important boots-on-the-ground research, investing in what I know is a motto I take to heart.
Every investor should use their eyes and ears to figure out what’s trending and what’s hot as a starting point for finding potential investment winners.
I was reminded of Lynch’s words of wisdom while watching the commercials during the Super Bowl last week. As you know, these are some of the most-watched commercials on the planet. Companies spent about $5 million for 30 seconds to get their message out.
There were quite a few good spots, and many of the tech trends I follow here in MoneyWire and in my paid service, Early Stage Investor, kept cropping up – things such as 5G, artificial intelligence (AI), Internet of Things (IoT), electric vehicles, and biotech.
These are trends that are set for massive growth in the coming years. And while the tech behemoths in many of the ads stand to gain, regular readers know that I believe investors in the right microcap companies working within these trends have a chance at extraordinary wealth generation.
I’m talking about the chance to make 5X or 10X your money… and maybe even more. See, American business history is chock full of small businesses that grew large and handed their shareholders 20-fold, 50-fold, even 100-fold or more gains.
And it’s exactly because the best small companies have such great potential to grow investor wealth that I believe everyone should have a portion of their portfolio in small-cap stocks. I recently outlined how you can get in on the best microcap stocks that are well positioned in the hottest trends in my Microcap Millionaire Project. Check it out here.
Let’s take 5G wireless technology as an example. Verizon (VZ) had a great ad during the Super Bowl about how 5G will enable life-saving connectivity among healthcare providers and first responders. Other wireless providers touted 5G’s benefits as well.
I’ve been following the trend for a couple years now, and I believe the rollout of 5G will really kick into gear this year. I fully anticipate this could be one of the fastest-growing trends and moneymakers for investors over the next decade.
In fact, one of the small-cap stocks in my Microcap Millionaire Portfolio provides mobile solutions for 5G connectivity and IoT systems. 5G will radically ramp up the capability of web-connected IoT devices that will be used in everything from autonomous vehicles to smart cities.
This tiny company I recommended develops modems and routers that enhance the ability of the device-to-cloud, which is badly needed for the upgrade to 5G.
The firm also offers software solutions and business intelligence to a wide array of industries, from government to aviation.
If the company can capture even a small portion of the 5G equipment and software market, it could eventually haul in a 10X gain from current prices!
AI is another hot sector with amazing potential that I noticed in the Super Bowl ads. You can already see that AI has embedded itself into many aspects of our lives. It has become an integral technology for many folks – something most probably don’t want to live without ever again.
Amazon’s (AMZN) Alexa ad during the Super Bowl brought this point home with some humor as real-life couple Ellen DeGeneres and Portia de Rossi wondered what life was like before Alexa. In short, the ad’s point is that before Alexa, life was pretty miserable and marked by needless inconvenience.
Google (GOOGL) ran a sentimental ad centered around a widower discussing with Google’s AI, Loretta, which photos and memories of the man’s former wife to save for posterity.
Snickers and Coca-Cola (KO) had their own takes on AI as well.
The point is that AI has entered our homes and the national conversation in a big way, yet the technology is really still in its infancy.
Believe me, AI is going to be huge. ARK Investment Research says it could be three times larger than the internet.
Let me explain…
The internet added roughly $10 trillion in global economic value in the first two decades after it came online. ARK believes that artificial intelligence will create $30 trillion in economic value over the next 17 years. To date, the industry has created $1 trillion in market capitalization – and that means there is still a ton of room on the upside.
Imagine investing in internet stocks in the early 1990s. You could have made more than 9,000% in software maker Microsoft (MSFT)… and more than 10,000% in internet plumbing maker Cisco Systems (CSCO).
Investing in artificial intelligence today is similar, except for one major difference – the gains you stand to make could be much bigger.
That brings me to another one of my Microcap Millionaire Portfolio recommendations that threads the needle between AI and biotech.
This company uses AI in the drug discovery process. It takes the information it gathers from approved drugs and adds it to a proprietary machine learning algorithm that analyzes massive amounts of data. This process is intended to create next-generation drugs that have yet to be – and might never have been – discovered by traditional methods.
What makes this process so lucrative is that it will help lower the huge costs associated with drug discovery, and at the same time it will also increase efficiency. The end result is more drugs gaining approval in a shorter amount of time. And ultimately, more money in this company’s pockets.
This firm has a shot at turning into a 20-bagger from its current price over the next three years.
I’ve got plenty more recommendations lined up in the Microcap Millionaire Portfolio, so I suggest you check it out as soon as possible.
P.S. More than 10,000 people tuned in Wednesday to see my Microcap Millionaire Project. Viewers saw me project how much time is left in the bull market right now.
But more importantly, they learned how buying microcaps can “boost” the gains they’re seeing from blue chip stocks and index funds.
I also revealed the top sectors in which to find microcaps for rare 2,500% potential gains… as well as my nine favorite microcap investment ideas for 2020 and beyond. Click here to catch the replay of last night’s big event.
Click here to listen to Matt McCall’s MoneyLine podcast! This week, Matt discusses Amazon’s (AMZN) ascent to the $1 trillion value milestone. What does its rise tell us about investing and, more importantly, how do we find the next Amazon? Matt also dives into the upside potential of microcap stocks and unveils a new portfolio aimed at the smallest stocks in the market.
You can subscribe to this podcast on iTunes, Stitcher, Spotify, or wherever you listen to podcasts.
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