5 Things We Should All Be Thankful For

When Abraham Lincoln declared a national day of thanksgiving in 1863, I’m sure he had no idea that 155 years later we would still set aside the last Thursday of November as Thanksgiving Day.

I think it’s great. Thanksgiving is one of my favorite holidays. I love being with friends and family. I love eating. I love watching football.

I’m definitely not a fan of shopping on Black Friday or even Thanksgiving Day now in some stores. I am a fan of online shopping. I can take advantage of bargains online from the comfort of my own home while enjoying more food and football. (Retail is about to be transformed yet again, which I discuss in the brand new issue Early Stage Investing issue.)

I’m also a fan of the stock market’s typical rally at the end of the year. Stocks have been unusually volatile the last couple of months, but that has generated some great buying opportunities.

I say that with confidence because of the economy, the market, and the transformative trends that can make us wealth. With that in mind, here are five things I’m thankful for now… and for what they mean for the future:

1. The Last Decade: The S&P 500 is up 200% from Thanksgiving Day 2008. What an opportunity to enjoy and profit from one of the great bull markets in history.

SPX Chart

2. The Next Decade: That 200% return over the last 10 years is impressive, but the next decade will provide opportunities to make a lot more money in next-generation trends. The complete transformation of the $7 trillion auto industry to electric and self-driving cars. The next generation of mobile technology, the bedrock our future will rest on. Breakthroughs in the health care industry. The global legalization of marijuana. And many more.

3. Low Unemployment Rate: The key to any good economy is a solid labor market. The unemployment rate is 3.7%, the lowest in over a decade. I am thankful that such a large number of Americans are working.

4. Strong Global Economy: Contrary to what the mainstream media may tell you, the global economy remains strong. The world’s biggest economy – the United States – grew 3.5% last quarter. China, the second-largest, grew 6.5%.

5. Oil Prices: Oil has fallen from over $75 a barrel in early October to under $55 today. Lower oil prices may not be good for energy stocks, which have had a tough year, but they help most other companies lower costs. Winter heating bills could also be lower, adding a few more bucks to spend to the wallets of Americans.

Most Importantly…

I am thankful for you and all of my readers and subscribers. You are the reason we work hard.

I walked away from my stock broker job because I wanted to help people make money, not my firm. I wanted the freedom to uncover emerging trends and the next great companies leading the way. Companies that can make you rich.

That is my life’s work, and we couldn’t be living in a better time to make it happen. I am grateful for the opportunity to help you and work with you.

My entire team and I thank you. We wish you and your family a Happy Thanksgiving!

300% Bigger than Black Friday – And It All Goes to One Company

What’s the biggest shopping day of the year?

If you said Black Friday, you’re right… sort of. It is in the United States anyway.

Here’s another question for you: What’s a good way to torture Matt McCall?

Answer: Taking me shopping on Black Friday.

Don’t get me wrong. I love the holidays. We had people over this past weekend and I fired up my Christmas jazz playlist. Nobody was happy about it but me. They all thought it was too early.

Still, the absolute last place I want to be on Black Friday is in a store with hundreds of other people looking for a parking space, standing in long lines to check out, and watching other shoppers fight over sale items. Nothing says happy holidays like getting in a fight over a gift.

It gets crazier every year. Black Friday is no longer a day… it’s a season that extends to Cyber Monday. That’s more my speed. I’ll take my deals in the comfort of my own home any day.

As big and as wild as Black Friday is, there is another shopping day that brings in almost four times as much money. It is the biggest shopping day of the year on the planet, and it just took place in China. A look at the numbers illustrates the huge wealth-building opportunities still available in that country.

BABA’s Big Bonanza

In 2017, Black Friday generated $7.9 billion in sales. If you go through Cyber Monday, that number jumps to about $14.5 billion.

That’s plenty impressive… until we look at Singles Day in China. Believe it or not, a single company is at the center of Singles Day – Alibaba (BABA). That would be like Amazon (AMZN) controlling Black Friday.

Singles Day takes place on 11/11. That date written out that way looks like “bare sticks,” which is how the Chinese refer to those not in a relationship. The day started out on college campuses as a celebration for singles, and in 2009 Alibaba brilliantly turned it into a day of discounts for singles to treat themselves. It has now become a 24-hour bonanza of online shopping in China.

This November 11, Alibaba clocked in sales of $30.8 billion, a sizable 27% jump over last year.

Nearly $4.7 billion of that came in the first 10 minutes!

Alibaba did 60% of all Black Friday sales in just 10 minutes.

Amazon has its own day, Prime Day, in July. It is the biggest day of the year for the company. This year, it brought in an estimated $4 billion in sales (Amazon doesn’t report exact numbers) and needed 17 countries and 36 hours to do that. Again, Alibaba did it in 10 minutes.

Amazingly, most articles I read about Singles Day have been negative. Critics say sales growth slowed versus last year or that the numbers are suspect.

It is astounding how everyone puts down what is going on in China. That won’t last. The growth is too powerful, and the right stocks will eventually push through the skepticism and rally to new highs. That equals a buying opportunity.

BABA’s Big Buying Opportunity

You can start with Alibaba, the e-commerce giant of China. If it was in the United States, it would undoubtedly be the largest company in the world.

China is already the largest e-commerce market in the world. It generated sales of $1.15 trillion in 2017, a 32% increase from the year before. In the next three years, that number could jump to $1.8 trillion, according to Forrester, as more Chinese shop online.

Alibaba is the undisputed leader, controlling 58% of the market, according to eMarketer. That makes it the Amazon of China.

Other parts of the business are also exciting, like Alibaba Cloud, China’s number-two food delivery company, and the recent announcement that Alibaba will start its own semiconductor company to produce its first artificial intelligence (AI) chip.

And yet, you can buy BABA 30% cheaper than five months ago when it traded at all-time highs.

Alibaba is a great company, but China’s stock market is the most unloved it has been in years. It is all an overreaction to trade tensions, rising interest rates in the U.S. (which could make U.S. bonds more attractive than Chinese bonds), and slowing growth.

The consensus is for average GDP growth of 6.3% in 2019 and 2020, down from around 6.7% for much of the last two years. This can be viewed in two ways. The bears look at it in a linear fashion and see declining growth. The bulls – and in this case, I would say the realists – see the world’s second-largest economy growing more than most emerging markets in the next two years.

I don’t care if growth slows all the way to 6% through 2020. It will still equate to big gains for the economy and the stock market. The low valuations we’re seeing now combined with 6%+ future growth is a recipe for profits.

BABA Chart

Alibaba’s stock has already bounced 10% off its late October low, but you still have a great opportunity to buy one of the leading Chinese companies at a valuation that may not be seen again in a long time.

If you combine the earnings growth rate from 2018 to 2019 and the forward P/E ratio, the PEG ratio is 0.59. Anything under 1.0 is very cheap in this market. BABA is a bargain with its P/E too low for its earnings growth.

I expect this stock to possibly double in the next 12-18 months and even more over time. I see the company hitting the fabled $1 trillion market cap in the next three to five years, making it a triple from current prices.

Note: A reliable two-step formula for making 100%+ capital gains has made its way onto the global investment scene recently.

Step one: Determine which companies are dominating China’s social media, video gaming, media, and internet sectors… much in the same way America’s top tech companies dominate their markets.

Step two: Buy stock in those companies.

You can buy these stocks right now at prices we may not see again for a long time… if ever. I explain why and tell you about three other companies set to double in the next year in the current issue of Investment Opportunities.

Click here for the full story.

Here’s Why the Upcoming Elections are Very Bullish for Legal Marijuana Stocks

October 17 was arguably the most important day in the history of the marijuana industry. Canada became the first industrialized nation to legalize recreational weed on a national level.

That date had been circled on many calendars – mine included! – and now that the day has come and gone, many investors are wondering what’s next. That’s especially true because marijuana stocks have sold off since October 17.

As frustrating as that is, we see this happen all the time in the stock market. It’s referred to as “buy the rumor, sell the news.”

Stocks run up ahead of a big catalyst and then pull back as traders lock in profits and take their money off the table. That’s fine for day traders, but the opportunity here is enormous, and we are investing for the HUGE gains to be made over the long haul.

Even so, I do expect the selling to be short-lived. The big-picture outlook for the marijuana sector could not be more bullish, and over time there will be plenty of additional catalysts to propel the industry higher.

And we won’t have to wait long. The next date circled on my marijuana calendar is Tuesday, November 6. That’s only six days from today.

November 6 is midterm Election Day in the United States, and this year’s vote will be extremely important. Not only will citizens elect new officials in both the House and Senate, several states will also decide whether to legalize marijuana recreationally or medically.

I expect these votes will set the stage for new marijuana-related bills in the future, bringing the United States closer to following Canada’s path to federal legalization.

We are on the cusp of huge wealth generation, similar to opportunities in internet stocks in 1994… or bitcoin in 2015. Those who got in early made fortunes over the years.

Steadily Increasing Support

Back in 1970, support for the legalization of marijuana in the U.S. was a mere 12%. That doubled by the late 1970s when marijuana usage became more mainstream.

Throughout the 1980s and 1990s, the level of support for legalization did not change much due in large part to former first lady Nancy Reagan’s “say no to drugs” campaign. The war on drugs in the U.S. and abroad was also a major political focus.

Support for the legalization of weed began to increase around the turn of the century, and it has been on an upward trajectory since. The most recent Gallup poll shows 64% of adult Americans now favor a change in marijuana laws.

There are a number of factors behind the increasing support. One is the changing society, which is more liberal on a social level. There are also studies and real-life experiences of the benefits of marijuana that have altered people’s views.

Most of the focus recently has been on Canada, but when the U.S. finally joins the party, so to speak, it will be the ultimate game changer.

My prediction is that medical marijuana will become fully legal in the United States within the next five years. Recreational use will follow a few years later.

The next step in getting there is the midterm election.

Growing Support

Over the years, more and more U.S. states have joined the trend toward legal weed. Each time that occurs it puts pressure on a neighboring state to consider legalization. Think about the potential tax dollars that would go across state lines.

As of today, 30 states have legalized medical marijuana and nine states have legalized it for recreational use. Several states are pushing for further legalization in the coming years, and four are set to vote on marijuana-related bills in next week’s midterm elections – Michigan, North Dakota, Utah, and Missouri.

Michigan legalized medical marijuana in 2008. Ten years later, it will now vote to also legalize it recreationally.

A poll conducted by Victory Phones in May found that 48% of respondents support the move. Another poll done by Michigan State University’s Institute for Public Policy and Social Research showed support closer to 61%. A September poll conducted by WDIV/Detroit News pegged support at 56%, so odds are pretty good that more than half the population is in favor.

Marijuana sales in the state could grow more than 75%, from just under $500 million in 2016 to nearly $884 million by 2025, according to Statista.

Marijuana Forecast

North Dakota voters will also decide whether recreational marijuana should be legalized just two years after authorizing it for medical purposes. Various polls put support between 38% and 46%, so not as high as Michigan, but there has been limited funding for marketing or voter-outreach efforts.

Utah has a measure on the ballot to legalize medical marijuana. Support is generally strong, with market research firm Dan Jones & Associates reporting 76% support in February and 65% support in late August. The latter poll with reduced support was taken just after the Mormon Church publicly opposed the move.

Missouri has three initiatives on the ballot, all of which relate to medical marijuana. These initiatives have raised more than $1 million each, and there has been no public opposition to the move. An August survey conducted by Missouri Scout found general public support at more than 50%.

I mentioned tax dollars earlier. There is a petition that calls for a 15% tax on medical marijuana, and according to one estimate, the state could bring in $56 million annually if the measures are approved.

Getting the Right People in Office

Whether you are right, left, or center, the bottom line is that politicians care about one thing – getting elected and reelected. To achieve that, they need to go with the masses. The majority of Americans support legalization, so we can expect to see more politicians sharing that view.

For years I have said that one of the key political topics in the next decade will be marijuana. In the past, it was an afterthought when you considered which politician to vote for. Today and going forward, it could be one of the deciding factors between a candidate winning or losing.

As this topic becomes a bigger part of the national conversation and political landscape, candidates will be pushed to pick a side. With the polling results showing increasing support for legalization, you better believe the politicians will go along with the consensus.

More Catalysts to Come

The upcoming vote is the first in a longer list of catalysts in place to drive the marijuana industry and stocks higher over the long term. These catalysts are both big and small. Some won’t take place for another couple of years while others could be hit at any moment. All make the opportunity in front of us huge.

Let’s look at a few upcoming marijuana catalysts.

Weed Becoming Legal in the United States

October 17 was a huge day with Canada’s legalization, but the day that weed becomes legal on a federal basis in the United States will be even bigger. I believe it’s coming sooner than many people think.
There is so much room for growth here that I believe one of the biggest opportunities today is U.S. marijuana stocks that are currently in Canada’s shadow.

Many U.S. marijuana stocks are trading with market caps well below those of their Canadian peers. In fact, as a whole their valuations are only about a tenth of the valuations of their Canadian counterparts.

That means U.S. marijuana stocks have the potential to grow 10-fold once weed is legal on a federal level.

When marijuana becomes legal in the United States, the leading companies will trade at much higher valuations simply based on market potential. That is an opportunity you cannot afford to ignore.

The DEA Reclassifying Marijuana

The marijuana industry has faced many hurdles over the years, but its biggest issue has always been the plant’s classification. Not only is it still illegal at the federal level, marijuana also remains a Schedule 1 drug according to the U.S. Drug Enforcement Administration (DEA).

Schedule 1 drugs are considered highly addictive with zero medical use. Heroin and LSD are in this category. Cocaine is one step below as a Schedule 2 drug.

It’s crazy that marijuana is still viewed that way, and there are plenty of indications it will be reclassified soon. In the meantime, that longstanding view on the drug has created issues for companies approved to do business on a state level.

I’m certain that is going to change. The latest buzz over Tilray (TLRY), a Canadian company that took off after going public, has already sparked calls that the Justice Department allow U.S. companies to also research medical uses of marijuana.

FDA Approval of Other Cannabis-Related Drugs

This summer, the U.S. Food and Drug Administration (FDA) approved a drug derived from the marijuana plant for the first time ever. The drug is Epidiolex, and it was developed by UK-based GW Pharmaceuticals (GWPH).

The distribution of Epidiolex was hindered in its first few months because of what we just talked about. It was classified as a Schedule 1 drug. But on September 27, the DEA made the decision to reclassify it as Schedule 5, which means low potential for abuse. While this was expected, it was still unprecedented, and the company’s shares shot up to a new all-time high as a result.

As I mentioned, I am confident that we will see a rescheduling of both hemp and marijuana in the relatively near future. And in the meantime, I expect to see more cannabis-derived drugs receive FDA and DEA approval.

The race to be a leader in the marijuana biotech space is on, and as it continues to heat up I suspect it will boost the entire sector.

The Farm Bill Becoming Law

Medical and legal establishments are slowly coming around to the benefits of CBD oil, which is derived from both cannabis and hemp. Both are Schedule 1 drugs, so it is technically still illegal under federal law.

This could also change very soon. Senator Mitch McConnell’s proposal of the Hemp Farming Act of 2018 (also known as the Farm Bill) could be a multi-billion-dollar game changer for the CBD industry. If it becomes law, it would legalize hemp at the federal level and remove it from Schedule 1.

Details on the final bill are still being worked out in Congress, but the vote should take place soon as the previous Farm Bill recently expired. There appears to be enough bipartisan support for the bill to pass.

Marijuana Legalization Spreading Globally

Legal weed isn’t just a North American story. It’s much, much bigger than that.

Sales of legal marijuana in North America were about $10 billion in 2017. Outside of North America, legal marijuana sales were a paltry $52 million, less than 1% of North American sales.

In other words, there is huge room for growth here.

The move by Canada and some U.S. states will show the rest of the world how much money businesses and governments can generate from legal marijuana. This will be a huge driver in getting other countries on board. There is too much money in the marijuana industry for nations to sit back and watch their peers and enemies profits.

In Europe, the upside for medical marijuana is enormous. The leader, Germany, passed medical marijuana legislation in 2016. The European Cannabis Report said the European market could be worth $65.4 billion annually if every country were to legalize marijuana.

The budget for the European government-subsidized healthcare systems is $1.3 trillion. Imagine if marijuana was able to get legal status for just medicinal purposes on the continent. It would be a giant market.

Given this outlook, the roughly $10 billion global market for marijuana could grow to $57 billion by 2027, according to Arcview Market Research.

There are even more aggressive forecasts out there. Ameri Research sees global marijuana sales hitting $63.5 billion by 2024. The basis of the prediction is that more countries will legalize marijuana at the recreational level.

Here are expectations in other countries:• Australia will grow into the fifth-largest legal cannabis market by 2027, from an estimated $52 million in 2018 to $1.2 billion in 2017.

  • Italy is expected to be the number two European market (behind Germany) by 2027, with sales of $1.2 billion
  • Spain is expected to legalize recreational marijuana in the next two years and generate sales of $206 million by 2021
  • Last by not least, there is South America. Marijuana is fully legal in Uruguay, and the market there could increase from $125 million in 2018 to $775 million by 2027.

More to Come

I could go on, but those are just a few catalysts that are already happening or are very likely to in the coming months and years. This is typical of the early stages of a mega-trend, and the big money is made owning stocks before the major catalysts hit.

Marijuana offers some of the biggest potential I’ve seen in years, and there is still time to set yourself up for huge and possibly life-changing profits.

Note: Mark your calendar for Tuesday, December 4th. I don’t know what you have planned for this day right now … But whatever you’re doing, I suggest you rearrange your schedule, because you’ve got the chance to make a heck of a lot of money, beginning on this exact day.

All thanks to the red-hot cannabis industry …

Even if you don’t know a thing about the marijuana markets …

Even if you’ve never bought a stock before …

Even if you have  just a small amount of cash, you could multiply your money many times over beginning just a few weeks from today. What’s going on exactly and how can you cash in?

Click here for my exclusive presentation that tells you the full story.

What the Marijuana Bears are Missing

Over the past two years, as more and more governments have decriminalized marijuana – and as legal marijuana stocks have climbed higher and higher – a cottage industry of naysayers has bloomed like mushrooms after a good rain.

For a variety of reasons, these folks have loudly and forcefully warned against investing in legal marijuana businesses.

These folks – and anyone who has listened to them – have missed out on an enormous financial opportunity. If we track “lost opportunity cost,” then we can say these people have missed out on literally hundreds of millions of dollars in profits and capital gains.

I’m writing to urge you: Don’t be in this same camp five years from now.

I’m writing to show you how the legal marijuana naysayers are naïve and wrong.

Most are ignorant of market history, massive long-term business trends, and the nature of the opportunities they create. While their advice may come from a good place, it’s misguided. I’m sending you this expanded essay today to explain why… and the enormous opportunity you have in front of you.

This essay could easily be worth over one million dollars to you over the long term.

Here’s what I mean…

The Nature of Massive Business Trends and the Long-Term Opportunities They Create

The creation of the Internet is easily one of the top 20 innovations in human history. It fundamentally altered the way we interact and do business.

Of course, a massive, world-altering business trend like the rise of the Internet creates massive opportunities for entrepreneurs and investors.

Of all the Internet-related businesses you could have invested in during the early 1990s, you’d be hard pressed to find three better ones than Cisco, Intel, and Microsoft. These three businesses played dominant roles in the buildout of the worldwide web and the devices people used to access it.

Cisco produced and sold the “plumbing” of the Internet. Microsoft produced and sold the software used for accessing the Internet, and Intel produced and sold the semiconductors the system ran on.

Here are the returns for each stock from January, 1, 1990 to December 31, 1999:

  • A $10,000 investment in Intel (INTC) would have turned into more than $461,000… a 4,600%+ gain!
  • A $10,000 investment in Microsoft (MSFT) would have grown into $935,555… profiting more than 9,350%!
  • And a $10,000 investment in Cisco (CSCO) when it went public in February 1990 would have turned into $6.9 million by the end of the century. That’s life-changing profits of 69,000%+!

As you can see, these businesses produced extraordinary returns for their shareholders during the Internet’s formative years. If you want better returns on every $1 you put at risk, you’ll probably have to play the lottery.

***However, the road to 5,000%+ gains was very bumpy. These super-performing stocks went through huge short-term ups and downs during their extraordinary runs.

For example, Cisco went public on February 16, 1990 at a split-adjusted price of $0.06 per share. The market cap that day was a modest $224 million. Revenue for the year surged 150% to $69 million from $27 million a year earlier. If you remove the name of the company and the year, those numbers are eerily similar to a handful of marijuana IPOs here in 2018.

By 1991, Cisco’s market cap hit $1 billion for the first time as revenue increased to $183 million. Again, the numbers are very similar to some marijuana stocks today.

Even so, early investors in CSCO did not turn into multi-millionaires overnight. In 1994, the stock fell over 50% in a few short months. It took more than a year for it to rebound. Investors who did not have the patience or the confidence in their research bailed out on the pullback under $1, missing out on a possible fortune.

The selling was triggered by an overall market plunge as the NASDAQ fell 14% from its March high. The selling in Cisco specifically was exacerbated when a spokeswoman warned that the next quarter’s earnings “were not in the bag.”

Think about that. A comment by one person, who is likely not even with the company anymore – and a comment that was focused on one three-month timeframe at that – likely sent most investors for the exits way too early.

CSCO Chart

Then there is Intel, which actually became a publicly traded stock back in October 1971. The company raised $8.23 million at a valuation of $58 million, a true microcap. Today Intel is worth $208 billion, more than 3,500 times its initial valuation.

Investors who had the fortitude to take the ride with Intel stock are extremely wealthy today. But as we know, it was not always a smooth ride. There were several sizable pullbacks in Intel years before the Internet Bubble in 2000. On a long-term chart they are barely noticeable (see below), but if you were an investor at the time they felt a lot worse than a mere blip.

After topping out in July 1995, INTC pulled back 40% the following few months. It took a year to recover the losses, and by July 1997, the stock rallied another 270% from the December 1995 low.

I would bet that the majority of retail investors were unable to stomach the pullback and dumped INTC when it was in the single digits.

INTC Chart

One final example is Microsoft. In 1990, the stock pulled back 38% from a high before rallying. The next year, MSFT fell 21% before rallying to a new high. Then there was a 28% pullback in 1992 before more new highs. And in 1993, there was a repeat performance as the stock again fell 28% before being 60% higher a year later.

The lesson is that in the early 1990s it was not easy for investors to hold through the pullbacks. A 20% pullback is considered a bear market in the investment world. Investors in Microsoft, Intel, and Cisco had to endure their fair share of bear markets, but if they did stay, they were on their way to becoming multi-millionaires.

MSFT Chart

A Cycle of Volatility

To experienced growth stock investors, the volatility and short-term corrections these stocks endured came as no surprise. It was expected. The early days of a massive new business trend are always marked by volatility… by frequent short-term sentiment extremes, both to the upside and the downside.

This is due to two facts of life…

Fact one: Industries or technologies with huge potential (like the Internet, radio, legal marijuana, smartphones, etc.) allow entrepreneurs, bankers, and brokers to make extraordinary claims and generate massive hype when marketing them.

Fact two: Most people are short-term thinkers. They can’t see past their nose when it comes to most things… including business trends and investment returns.

Because of fact one, people make big claims about an industry that usually sound something like this: “It’s going to transform our economy! You stand to make a fortune as a shareholder!”

Of course, investors get very excited by those claims and take positions.

And because of fact two, those same investors bail out of their holdings when they realize the industry isn’t going to fulfill its extraordinary potential in just a few weeks.

There were plenty of naysayers about the Internet. Their statements may seem laughable now, but they were enough to shake investors out of stocks at the time.

In 1994, Time said the Internet “was not designed for doing commerce, and it does not gracefully accommodate new arrivals.”

The next year, a headline on a Newsweek article read: The Internet? BAH!

No matter how impactful a new business or technology is, it takes years and years to truly change the world and create enormous wealth. But most investors don’t want to hear it… so they sell.

During the life of a massive new business or technological trend, this volatile cycle of rushed, enthusiastic buying – followed by frustrated, emotional selling – repeats itself over and over.

When you study the history of massive, world-altering business trends and the long-term wealth-building opportunities they create, you’ll learn that any time a major new industry is in its early stages, temporary bouts of extreme enthusiasm followed by sharp corrections (aka “high volatility”) are the norm, not the exception.

The volatile early days of Internet-related stocks were no surprise to any student of innovation and huge business trends.

The same cycle played out in the early days of the automobile… the early days of air travel… the early days of radio… and the early days of Bitcoin.

This brings us to the modern day legal marijuana business…

Marijuana Bears Are Looking in the Wrong Places

Over the past few years, many marijuana stocks have skyrocketed 100%… 200%… even 500%. Interest in the sector is at one of those traditional short-term highs.

In addition to many bullish folks in the marketplace, there are hundreds of naysayers out there filling editorial pages, Facebook, and Twitter with warnings that legal marijuana stocks are in a bubble… that the bull market is toast… that you should avoid these stocks like the plague.

These marijuana bears hardly spend a minute talking about the single most critical aspect of it all…

The incredible long-term fundamentals behind the legal marijuana business.

By now, you’ve surely heard the big picture case for investing in marijuana. In 1937, the federal government made the sale and consumption of marijuana essentially illegal. But in recent years, “weed” is now being decriminalized across the U.S. and Canada.

Businesses and consumers are responding…

Two years ago, sales of legal marijuana in America generated $6.7 billion in sales.

Last year, sales of legal marijuana grew by 37% to reach $9.2 billion.

When you consider that sales of coffee in America last year were $48 billion and that sales of alcohol were nearly $72 billion, three critical things jump to my investment mind…

One, legal marijuana is a large industry. Two, legal marijuana is a rapidly expanding industry. And three, it has room to grow much, much larger.

In fact, the legal marijuana business is set to grow so much over the next 10 years, I believe it will turn out to be one of the three biggest investment opportunities of your entire life, no matter when you were born. The opportunity in legal weed is much like the opportunity Internet stocks offered in 1994 … or that Bitcoin offered in 2015.

You’ve probably heard the comparison between the weed industry and the alcohol industry of the 1920s. Prohibition suppressed a great deal of drinking in the United States. When the law was repealed, pent up demand was released, sales skyrocketed, and booze sellers grew rich.

The estimates of where the marijuana industry will be in the coming years vary dramatically because there are a lot of unknowns. Which states will legalize medical marijuana? Will the states that already allow medical use legalize it recreationally? How will it be accepted, and will it overtake cigarettes and alcohol?

In 2017, North American legal marijuana sales came in around $10 billion – a 33% increase over 2016. With more states and now Canada legalizing recreational marijuana, sales are expected to grow by another nearly 150% by 2021. Medical marijuana sales will continue to increase at an annual compound rate of 21% up until 2022. Recreational sales will climb to $24.1 billion by 2025.

Let’s put the numbers into perspective. McDonald’s had sales of $8 billion in the U.S. in 2017. Based on the current numbers, it appears there will be more sales of legal marijuana than of Big Macs and chicken nuggets. That shows the scale of where the industry has gotten to and how big it can get when the federal government finally sees the light and legalizes marijuana from coast to coast.

I believe marijuana could grab a lot of market share from cigarettes and alcohol. There is nobody debating the negative effects of smoking cigarettes, and the U.S. has a major issue with binge drinking among the younger generation. Both vices are on the downslope, which is creating the perfect opportunity for marijuana to steal significant market share.

If the marijuana industry can reach the $75 billion level that research firm Cowen has predicted by 2030, it will be just below the current sales of cigarettes ($77 billion) and encroaching on the $110 billion in beer sales.

What most investors forget is that the marijuana business is not just about how much revenue is generated selling the plant. There are ancillary businesses, the “picks and shovels” as I call them. Deloitte believes that when the entire marijuana business is grouped together, the upside potential is for annual sales of $22.6 billion. Nearly three times the amount spent on wine!

These are incredible numbers. But don’t think the demand outlook for legal marijuana is limited to just North America. It’s much, much bigger than that.

As I mentioned, sales of legal marijuana in North America were about $10 billion in 2017. Outside of North America, legal marijuana sales were a paltry $52 million, less than 1% of North American sales.

Given this outlook, the roughly $10 billion global market for marijuana could grow to $57 billion by 2027, according to Arcview Market Research.

There are even more aggressive forecasts out there. Ameri Research sees global marijuana sales hitting $63.5 billion by 2024. The basis of the prediction is that more countries will legalize marijuana at the recreational level.

*** Again… if you spend time studying the history of massive, world-altering business trends and the long-term wealth-building opportunities they create, you’ll learn that any time a major new industry is in its early stages, high volatility is the norm, not the exception.

Temporary bouts of extreme enthusiasm followed by sharp corrections are inevitable. This was the case with the rise of personal computers in the 1980s. It was the case with Internet-related businesses in the 1990s. Legal marijuana is no different.

It’s just how the world works.

This is what most of the marijuana bears fail to mention in their critiques of the sector. They see the current excess of short-term optimism and then make blanket statements about how the whole sector is a terrible investment that should be avoided like the plague forever. They make no distinction between short-term “froth” in the market and the incredible long-term business fundamentals.

Anyone who says the bull market in legal marijuana is over just because the market is “short-term overheated” is revealing a deep ignorance of business trends and investment history. They need to go back to investment school (figuratively or literally), if they ever went there at all.

***I encourage you to view the legal marijuana market like a seasoned growth investor views it. Make the intelligent distinction between the very short-term picture and the long-term picture… and focus on the long-term picture.

To me, the long-term picture – and the absolute no brainer investment case – is utterly simple. We don’t live in the 1950s anymore. We’re in the early stages of a tidal shift in societal norms. The majority of voters don’t see marijuana as a vile, dangerous corrupter of youth and society. Most people are coming around to thinking of marijuana like they thought of alcohol a generation ago. This in turn is creating a tidal shift in government law around the world… and unleashing a giant new sector that will take decades to develop.

***Yes, Canada did just legalize recreational marijuana, marking a historic day in the weed industry. Remember, Canada is the first and only industrialized nation to legalize recreational marijuana. It boasts the 10th-largest economy in the world, accounting for 2.7% of global economic output.

How can there be a bubble when recreational marijuana remains illegal in 97.3% of the world’s economy?

That would be akin to calling the Internet a bubble in the early 1990s because a few people were able to send emails.

The world’s best consumer product companies certainly don’t view legal marijuana like the bears view it…

  • In the past year, the giant alcohol company Constellation Brands (STZ), invested more than $4 billion into the marijuana sector. The investment was made into one company, Canopy Growth Corp. (CGC), which is now the largest marijuana company in the world.
  • Another major beer company, $13 billion Molson Coors Brewing (TAP), signed a partnership with marijuana company HEXO (HYYDF) in August.
  • The alcohol companies led the movement and the tobacco companies are next to make the leap into marijuana. U.K.-based Imperial Brands (IMBBY), a $32 billion tobacco company known for its Kool and Winston brands, has invested in a private marijuana company
  • Altria (MO), the $116 billion tobacco giant behind the Marlboro brand, has been in talks with several Canadian marijuana companies.
  • And how about $196 billion global consumer giant Coca-Cola (KO)? The company has been in talks with marijuana companies in the past few months. Management even came out with a statement that confirmed they are looking into using marijuana-derived substances (chiefly CBD oil) as ingredients for wellness beverages.

Big Money is Coming

There are only a handful of marijuana stocks that are available to large, institutional investors like mutual funds and hedge funds.

These big money managers ultimately determine where stock prices go, but they can only invest in highly liquid, sizable companies. With just a few options available, the institutions have not been able to participate in the first wave of the marijuana trend.

With more companies moving to major stock exchanges every week, it opens up the opportunity for large amounts of money to flow into marijuana stocks.

A bubble cannot exist without the big money making its way into a sector.

***As I’ve detailed, the legal marijuana business has enormous room to grow over the next decade… and it represents one of the biggest opportunities of your life.

Will there be bumps on this road? Sure.

Will the legal marijuana sector get overheated from time to time and experience sharp corrections? Sure.

If you learn the history of massive, world-altering trends – and the long-term wealth-building opportunities they create – you know this stuff will happen. And you’ll know short-term sell-offs will be amazing times to buy ownership stakes in the world’s best legal marijuana businesses.

My advice to current or would-be legal marijuana investors is the same advice early Internet investors should have received in 1994. It’s the same advice early Bitcoin owners should have received in 2015. It’s the same advice early personal computer industry investors should have received in 1983:

Focus on the long-term fundamentals… focus on the enormous long-term potential of this new, disruptive, world-altering business. And stay long.

Note: Mark your calendar for Tuesday, December 4th. I don’t know what you have planned for this day right now … But whatever you’re doing, I suggest you rearrange your schedule, because you’ve got the chance to make a heck of a lot of money, beginning on this exact day.

All thanks to the red-hot cannabis industry …

Even if you don’t know a thing about the marijuana markets …

Even if you’ve never bought a stock before …

If you have a just small amount of cash, you could multiply your money many times over beginning just a few weeks from today. What’s going on exactly and how can you cash in?

Click here for my exclusive presentation that tells you the full story.

Let the Marijuana Boom Begin

Today’s the day.

Canada is now the first industrialized nation in the world to legalize marijuana for recreational use from border to border. That puts it at the epicenter of change and growth.

It also means investors have a chance to double or triple their money, perhaps even more.

If you watched marijuana stocks today, you may be wondering what the heck I’m talking about. After all, they were mostly down on this historic day, some quite a bit.

Actually, that’s not a surprise.

October 17 has been marked on a lot of calendars for a long time, especially in Canada. It was almost like Black Friday in the U.S. There were long lines at cannabis stores to be among the first to legally purchase marijuana. I saw one account that said people started lining up at 3:30 in the morning for a store’s 10:00 a.m. opening.

When a date is that well known in advance, we will often see stocks run up ahead of time and then sell off on the actual event or announcement. It happens all the time in the stock market and is referred to as “buy the rumor, sell the news.”

That does not mean the market is down on marijuana stocks. It will take some time for more traditional investors to come around, but I expect the selling will be short-lived. The big-picture outlook for the marijuana sector could not be more bullish, so there are some great buying opportunities out there.

Huge Growth Ahead

We know the marijuana market in Canada will be big, but predictions as to just how big vary greatly. Some researchers believe the black market will continue to thrive while others see a fast move to legal purchases. I think there will always be a black market for marijuana, but when the quality and price in a legal store are more attractive, it will win all day, every day.

Let’s focus on what we know. In 2017, it was estimated that the country generated $5.7 billion in marijuana sales. Almost all of it – over 90% – was on the black market.

By 2019, when recreational use will have been legal for a full year, international accounting firm Deloitte predicts 23% growth as Canadians will spend $7 billion on marijuana in 2019. That’s the legal market alone. The firm sees more than 20% additional growth to $8.7 billion in a few years.

We also know that marijuana in Canada is definitely not a fad. Consumption there increased by 730 tons, or 1,678%, between 1961 and 2017. And remember, that was when marijuana was illegal!

That same scenario is set to play out in the United States. Marijuana remains illegal on the federal level, but 31 states have already legalized it for medical use and nine have legalized it for recreational use.

The free market has responded. In 2015, the legal marijuana market in the U.S. was $5.4 billion. In 2017, it exploded 57.4% to reach $8.5 billion. That was more money than was spent on ice cream! This year, sales should increase another 29.4% to $11 billion.

Canada and the U.S. get a lot of the attention, but this is an international story. There are already over 25 countries where medical marijuana is legal. Most of the largest companies in the industry are already extending their reach around the globe in anticipation of what is to come. A European investment bank predicts that the legal global marijuana market could grow by more than 1,000% over the next decade.

I expect this market will continue to grow significantly in the next 10 years.

Already Making Money…And More to Come

Any time the government opens up a huge new market like legal marijuana, investors can win very big. I’ve been recommending stocks for the last several months in my Investment Opportunities service to get us in position for profits that could easily multiply many times over in the coming years.

The first company I recommended was Canopy Growth (CGC), the largest marijuana company in the world with a market capitalization of $11.6 billion. It has been in the news this year with alcoholic beverage giant Constellation Brands (STZ) making two big investments in the company and bringing its stake up to 38%.

We’re up over 65% in less than five months.

CGC Chart

We’re also up over 60% in less than three months in the leading e-commerce cannabis company – the Amazon of Marijuana if you will.

And we have 20% gains in just 10 weeks in a “picks and shovels” play – a supplier to the industry.

And just today, I sent my readers a Flash Alert recommending the company I view as the best positioned to profit from pot now being legal in Canada. It is one of the largest marijuana companies in that country and has supply agreements in every province as well as the Yukon Territory. That means it has the opportunity to sell to 98.5% of the Canadian population. No other company can match that.

Canada’s legalization opens the gates to massive growth, and much of the rest of the world should not be far behind. The opportunity in legal weed is much like the opportunity internet stocks offered in 1994 … or that bitcoin offered in 2015. It’s set to grow many multiples of its current size – larger than the coffee business even. This incredible growth will send the value of the best legal marijuana businesses up 10X, 20X, even 50X over the coming years.

If you’re not starting to get in on this opportunity, now is the time.

The International Conglomerate Most Folks Don’t Know About

Would you like to invest in a stock that gained 67,000% in the 14 years it has been publicly traded?

I sure hope your answer is yes. If not, you can probably stop reading right now.

Here’s another question: Would you like to invest in a stock that is down 40% over the last eight months?

If your answer to that one is also yes, then…you’re right!

They are actually the same company. A company that is not a household name – at least not in the United States –and yet is right smack in the middle of several of the most exciting investing themes today. That 40% drop is getting a lot of attention, but in my mind it’s a buying opportunity that may not come back around for a long time.

One Company, Multiple Themes

The company is Tencent Holdings (TCEHY), a Chinese tech conglomerate that was one of the top contenders with Alphabet (GOOGL) and Microsoft (MSFT) to join Apple (AAPL) and Amazon (AMZN) in the trillion-dollar market cap club.

Pressure on Chinese stocks has weighed on Tencent, along with a crackdown on China’s gaming sector, trade issues in the U.S., concerns about valuations in tech stocks, and more. The series of headlines has given investors an excuse to sell and taken $220 billion out of the market cap, which is now at $337 billion.

So why the heck would this be a buying opportunity?

Let me count the ways.

1. eGaming: Tencent Games is the largest gaming company in the world. It owns a 40% stake in Epic Games, the company behind the number one videogame in the world, Fortnite. It owns Riot Games, maker of League of Legends.

2. Messaging: WeChat is the number one messaging service in China with one billion users.

3. Music: Tencent Music is the largest music-streaming service in China with over 800 million monthly users. And here’s a kicker: The company has filed to bring Tencent Music public in the U.S. – the symbol will be TME – which could easily be a boost for the company.

4. Economic strength: China is the world’s second-largest economy and still one of the fastest growing in the world, even when it hits a few bumps.

And we haven’t even gotten to the fact that Tencent is a company of companies. Tencent Holdings owns a bunch of big-time businesses in the U.S. and China. It has double-digit stakes in JD.com (JD), China’s largest retailer; 58.com (WUBA), China’s largest classified ads site; Sogou (SOGO), a leading search engine in China, and many more. All told, Tencent has invested more than $20 billion in over 600 deals.

It’s almost like owning an exchange-traded fund or mutual fund, but with a lot more potential.

Tencent, by the way, also has stakes in American companies such as Snap (SNAP), Activision Blizzard (ATVI), and Uber. It owns 7.5% of Spotify (SPOT), which is based in Sweden but trades in the U.S.

There is more to come, too, as the company continues to invest in startups through its venture capital arm. A lot of investors probably don’t even know this exists, but its importance should not be overlooked. For example, just this week Tencent ponied up $180 million for a stake in a Brazilian financial technology company.

Big Upside Potential

Tencent is a terrific long-term holding with big potential over time. It has been a favorite of mine for a long time, and as you can see, it is tied to many of the mega-trends that will lead the next bull market.

Here’s another one: artificial intelligence (AI). Tencent is one of the leaders of China’s big investment in AI. In fact, the company has just joined forces with a London company to use AI in diagnosing Parkinson’s disease.

The recent rout has created a terrific buying opportunity. I can’t tell you the exact moment the stock will turn higher, but over time I look for it to double and possibly more from where it is today. I expect the regulatory issues with gaming in China will start to lighten soon, and when the trade issues with the U.S. are smoothed out, it will be a huge boost to Chinese stocks. Tencent should be one of the winners for a long time to come.

China Stocks: Opportunity or Danger?

Chinese stocks have long been both fascinating and fearsome to American investors.

On the one hand, it’s easy to understand the potential in a nation of 1.4 billion people, many of whom are joining the ranks of the middle class. It’s also easy to understand consistently high economic growth rates, even if they have slowed from nearly 15% 10 years ago to just under 7% today.

On the other hand, risk can be higher. China is not a democracy, and the government can change things at any time.

That said, this combination of higher perceived political and geographic risk often leads to attractive valuations in stocks.

Most recently, the talk of a potential trade war between the U.S. and China has hit Chinese stocks hard. The Shanghai Composite Index is down 20% from its highs set early in 2018 – shown in the chart of the KraneShares Bosera MSCI China A ETF below – and many are now trading at valuations not seen in years.

KBA Chart

So what’s the right move?

Definitely Buy But Be Selective

The opportunities in select Chinese stocks are simply too good to pass up. That doesn’t mean I’m an all-out China bull, and it doesn’t mean all Chinese stocks are equal. It does mean there is big potential for big money in certain companies and sectors.

Part of the reason is valuations. The P/E ratio for the Shanghai Index is now down near 10, well below 17.5 for the S&P 500. Valuations become even more attractive when you consider that earnings growth in China is expected to increase at a faster pace than the U.S.

The discount comes down to the fear of a trade war, and some investors are not willing to bet on a resolution between the two countries. I never believed a full-blown trade war would be the end game, and based on what we’ve seen so far, I still don’t. Yes, there are headlines and posturing, but neither country wants or needs to go that far.

Plus, the stocks I would be buying are the ones with tons of potential over time, even if there was a short-lived trade war.

The Netflix of China

I especially like opportunities in companies that have the potential to become the Chinese version of a wildly successful counterpart in the United States or other countries.

For instance, I’ve been recommending a company that is set to become the Netflix of China. Here’s why it has so much potential. In 2002, Netflix (NFLX) had less than three million subscribers. By 2018, it had reached 125 million subscribers. The company now sports a market valuation of $165 billion.

To give you an idea of how an investor would have done with an early Netflix stake, consider that NFLX fell to a split-adjusted low of $0.35 per share in 2002. Even if you had invested not at the bottom but at $0.50 per share, a $5,000 investment would now be worth $3.67 million.

The market gave investors another big Netflix opportunity in 2012. Back then, the stock dipped to $7.58 per share because of concerns about the large losses the company was incurring due to rising costs. An investment of $5,000 at that time would have ballooned to $242,381 in less than six years (a 48-fold win).

Think about it. The companies that dominate social media, video games, media, and the internet in the United States are some of the biggest stock market winners of the past 20 years. I’m talking about Google (GOOGL, now known as Alphabet), Facebook (FB), Netflix and video game giant Activision Blizzard (ATVI). They remain the leaders of the current bull market 20 years after they started to take off. If their Chinese counterparts follow the same path, there is more than a decade’s worth of gains ahead.

The population of the U.S. is about 330 million. The population of China is 1.38 billion. The Chinese government uses laws and regulations to restrict (and sometimes prohibit) non-Chinese companies doing business in China. This policy allows home-grown businesses to do well.

The Netflix of China is a company called iQIYI (IQ), which I believe will emerge as one of China’s major media and entertainment winners. I shared my full analysis on the company with my Investment Opportunities readers a few months ago, and the recent pressure on Chinese stocks in general means it’s still a great buy.

It’s not too late to learn all you need to know about this company and the opportunity ahead. There are others as well. The recent weakness has provided some great buying opportunities, but you need to stay selective.

IPOs: Profits and Perils

Initial public offerings have long held a certain mystique for investors, going all the way back more than 400 years to when the Dutch East India Company came the first “modern” IPO. They have even more of a mystique today in our always connected world of instant information.

Some of the allure is the hope for big and fast gains, though that doesn’t always work out. We saw another example of this just today as SurveyMonkey (SVMK) made its trading debut. The stock priced its IPO at $12, opened at $18.75, got as high as $20 and closed the day at $17.

One stock. One day of trading. Big difference in returns.

Those who were able to get in on the true IPO price of $12 (which means basically nobody except insiders and institutions): +42%.

Those who bought at the opening price of $18.75: -9%.

And those who bought late morning around the high of $20: -15%

Such is the nature of IPOs.

You can indeed make big money, but it involves real analysis and research. It also involves knowing the trading rhythm of stocks after they go public, pouncing at the right time, and then holding on for big gains.

The IPO of the Year

For me, the most telling IPO so far this year happened on July 19 when a small, virtually-unknown company named Tilray (TLRY) went public on the NASDAQ stock exchange.

Tilray was the first “pure play” marijuana-focused company to IPO on a major U.S. exchange. It produces medical cannabis for research and public consumption.

To say the company’s debut was a success is a gross understatement.

In the first month after going public and selling ownership stakes to individual investors, Tilray had climbed $13 per share, a 60% gain. It was a heck of a first month… and it got even better.

As investors grew more and more interested in the legalization of marijuana and the $100 billion+ market that it could create, Tilray gained another $277 per share after two months of trading, a 1,237% gain over its IPO price.

It’s one of the greatest short-term wealth creation events we’ve seen in the stock market over the past decade. And although Tilray’s huge gain is easily one of the highest profile financial events of 2018, it’s not the only legal marijuana stock to create incredible wealth for its shareholders.

The Hot IPO Market

As you read this, there is an historic boom taking place in the legal marijuana business… which in turn is creating an historic boom in legal marijuana stocks.

Medical marijuana is now legal in 30 states and Washington, D.C., and three weeks from today, recreational marijuana will become legal throughout Canada.

Legal Marijuana States

In 2015, the legal marijuana market was $5.4 billion in the United States. In 2017, that market exploded 57.4% to reach $8.5 billion – more money than was spent on ice cream! This year, sales should increase another 29.4% to $11 billion, and I expect this market will continue to grow significantly in the next 10 years.

Any time the government opens up a huge new market like legal marijuana, investors can win big. That’s true when it comes to companies that are already publicly traded and those that are still to come.

The historic marijuana boom should fuel a healthy marijuana IPO market for years.

We’re still in the very early innings of this game, but it has already been an interesting year for marijuana IPOs. I’ve recommended some in my newsletters, and I know there will be more big-money opportunities in the coming years as the U.S. and the world shift to legalized marijuana.

In fact, I think it’s so important to stay on top of the marijuana IPO market that I’m creating a special interactive calendar. I’ll have more details soon as we get closer to finishing it up, and I’ll also share my thoughts on how to pick the winners and avoid the losers when it comes to IPOs.

Big Changes, Big Profits: The Car’s Historic Transformation

The car as we know it is on the verge of a transformative change not seen since Karl Benz invented it more than 130 years ago. In fact, the whole transportation sector is now poised for its version of 2.0, and I’m not exaggerating when I say this will lead to trillions of dollars in money sloshing around in the coming decades.

When Benz produced the first prototype in 1885, I’m sure he did not fully grasp that his invention was a major pivot point in human history. Cars made us much more mobile. They led us to scour the world in search of iron ore, oil, copper, and rubber resources. They led us to build millions of miles of highways. They led to muscle cars, the Daytona 500, commuter traffic, trucking, the suburbs, food and package delivery, drive-through restaurants – I could go on and on.

We are now on the cusp of a similar demarcation line, the beginning of a new chapter that will again reshape the world we live in. What’s coming is big. That’s why Intel (INTC) bet $15 billion on it. It’s why Alphabet (GOOGL), Apple (AAPL), Tesla (TSLA), General Motors (GM), Ford (F), Toyota (TM) and more are also betting big on it.

A Mountain of Money

When I say trillions of dollars will slosh around, I’m not kidding. Vehicle sales, supplies, and service are already a $7 trillion industry – and one that is about to be changed forever. I guarantee that whatever you can envision right now is only the tip of the iceberg. It’s just like 10 years ago when the first iPhone was released. Very few people imagined how that device would change our world.
There are two main areas of transformation: cars powered by electricity and cars that drive themselves. Investors need to be in both, but if I had to pick one, I would go with autonomous vehicles (AVs). They have huge upside potential.

Consider this: Sales of AVs are expected to go from zero today to 33 million self-driving cars in 2040. The first key year will be 2021. That’s when individuals like you and me will be able to buy AVs. One research firm, IHS Markit, estimates 51,000 vehicles will be sold that year, and then the momentum kicks in. By 2025, sales should grow 1,860% to one million AVs and continue ramping up for the next 15 years. Add it all up and the period from 2021 to 2040 will see annual sales of AVs grow by 660-fold!

Where to Start Investing

Imagine going home from work in crawling rush hour traffic on a Friday afternoon. Instead of your blood pressure spiking, you can sit back and relax in the privacy of your own vehicle. Maybe even have a friend or two with you for an early start on happy hour. After all, you’re not driving. The car is!
It’s fun to imagine various ways we would use AVs, but the important point is that automated vehicles will save lives, time, and money – and that’s why sales are going to take off.

As you can imagine, a ton of components are necessary for a car to drive itself, and right now I think the makers of these parts are the best investing opportunities as the big boys race to get the first AVs to market. It’s the classic “picks and shovels” strategy, and it can make you a fortune.

For example, when you think of cars, you may not be used to thinking about semiconductors. Cars of the future will be loaded with semis that will gather data, process it, share it, and connect to the rest of the world. For example, a driverless car from Waymo, an Alphabet subsidiary, gathers nearly 1 gigabyte (GB) of sensor data per second.

Data is king in AVs. In order for it to move quickly enough, there needs to be an update to the network. That is why the 5G Revolution is so important – another exciting investment theme I will write more about soon.

Without a driver, an AV must be equipped with sensors to detect the environment around it. There could be up to 30 different sensors on each AV to accurately gain a 360-degree view.

In addition, there will be cameras around the outside and interior of the AVs. One of the most important of these technologies will be what is called LiDAR, which is short for “LIght Detection And Ranging.” It is similar to radar, except it uses light from a laser pulse instead of radio waves. The system measures how long it takes for the lasers to come back after hitting an object, and these continuous pulses help create a 3-D map of what is around the vehicle. Growth in the LiDAR market is expected to soar from $325 million last year to $5.2 billion by 2023 and on to $28 billion by 2032. That equates to an 86-bagger!

Waymo has a big and early lead in mapping, which could be a treasure trove of information for the company in the future. There are also a number of large global companies working in software and hardware development. I’ve recommended one major player in my Investment Opportunities service, and other leaders include Intel, Nvidia (NVDA), NXP Semiconductors (NXPI), Samsung, Bosch, and others.

You can see the possibilities, and you can see why I said investing in the disruption of the transportation industry is similar to investing in anything Apple-related 10 years ago. Those who invested in the suppliers made fortunes. The same will be said in 10 years for the investors who understand the AV industry and buy with a long-term approach.

Matt has just recommended three lesser-known companies well-positioned for big gains as the race for autonomous vehicles continues full speed ahead. One is a rare pure play, one is a leader in LiDAR technology and the third is a chip company focusing on the most disruptive industries. Investment Opportunities subscribers can log in here. If you are not a member, you can still get immediate access to his full report on AVs and his three brand new recommendations with a risk-free trial subscription to Investment Opportunities. Click here to learn more and get started right away!

How to Cash in on the Legal Sports Betting Boom

A New Kind of Croupier Business is About to Thrive. Here’s Why That Can Make Us a Fortune

Yesterday, I showed you how big the sports betting market really is, and how some of the biggest players in sports betting – including the sports leagues themselves – are preparing to cash in on this new opportunity to expand their businesses!

Today, I am going to give you another huge reason why I’m so bullish on sports betting, especially the betting platforms: They employ a unique, extremely powerful business model that is often called the “croupier” model.

Croupier is a French word – pronounced like “croo-pee-ay.” A croupier is someone at a gambling table that runs the game and helps gamblers place their bets. He also takes a small cut of the total bets placed.

A good croupier business is a wonderful, wonderful thing. The croupier is not one of the gamblers taking huge risks. He doesn’t bet at all, but makes a little bit of money from each and every bet. He is the guy skimming small amounts from huge volumes. Eventually, all the small amounts add up to a big pile of money.

Croupier businesses can include stock exchanges, commodity exchanges, brokerages, and, of course, casinos. They are toll roads on the world’s financial highways. Trillions of dollars travel around the world every day. That travel is not free. The croupiers always get their cut.

But it gets better. Croupiers are also often insulated from competitive threats because of regulatory barriers to entry or because they moved into their market first, became established, became trusted, and made it so it was insane to compete with them. Their businesses often have “wide moats” around them. A wide moat – or a set of circumstances that makes it very hard for other businesses to compete – is a quality treasured by the legendary investor Warren Buffett.

For example, the Chicago Mercantile Exchange (CME) is one of the world’s largest and most important financial exchanges. It’s where investors, speculators, and businesses go to transact in financial instruments like currencies and commodities. Businesses use CME’s exchanges to hedge currency exposure. Large commodity producers use CME’s exchanges to lock in the prices at which they will sell their future production. Speculators use the CME’s exchanges to bet on stocks, bonds, and commodities.

The CME doesn’t risk money on the direction of any of these things. It doesn’t care if the price of oil goes up or down. It’s just the middle man, taking a small cut from each transaction. CME’s dominant position in the marketplace makes it very difficult to compete with it.

This business model has made CME a fantastic investment. From 2004 to mid-2018, CME shares returned 1,675% (including dividends), an incredible return compared to the broad market’s return of 150% (including dividends) during the same time.

Chart

CME isn’t an isolated case of a croupier proving to be an incredible investment.

Below is a chart showing the returns generated by another croupier, a large financial exchange called IntercontinentalExchange Group (ICE), compared to the broad market from 2004 to mid-2018. ICE returned 1,427% against the broad market’s 150%.

Chart

And the chart below displays the return generated by the powerful London Stock Exchange Group (LSE.L) compared to the return generated by the broad market from 2004 to mid-2018. LSE returned 1,951% compared to the broad market’s 150% return.

Chart

Collecting small fees on millions and millions of transactions…

Acting as the toll taker on the world’s financial highways…

That’s the croupier business.

That’s a kind of business we want to own.

Investment Opportunities

The sports gambling trend is clearly in motion, and everything points to a strong boom in sports gambling following the monumental SCOTUS decision.

There are multiple ways to profit. One idea is to bet a lot of money on your favorite football team in hopes of a quick double. That would be a dumb idea, even if it sounds exhilarating. There are far smarter ways to profit, and that’s where we rely on our extensive research to find the winners.

There are a number of players in the industry that can all succeed and take a big piece of the growing sports gambling pie. The most obvious would be the casinos that can easily add a sportsbook and attract gamblers who are already on their properties. They also have another advantage because in most states you must have a physical property, such as a casino or racetrack, to obtain a sports gambling license.

Plus, technology is needed to power the gambling experience on land and on mobile. In the coming years, the majority of wagers will be placed via apps, and we want to own companies that are at the forefront of this technology.

Then there are the bookmakers that have been around for years overseas, predominantly in the UK. Paddy Power Betfair is already making a big move into the United States with the FanDuel purchase we talked about.

And then there are the leagues and the teams themselves. There are only a few publicly traded sports teams in the United States, and my favorite has the makings of a big winner thanks to the SCOTUS decision.

How to Get Rich Without Trying or Thinking Very Hard

When an industry enjoys years and years of robust growth it’s often said to have a “tailwind.”

When an industry has a strong tailwind blowing behind it – like Internet stocks enjoyed in the 1990s – practically anyone can make lots of money in it.

Achieving success in these situations can be like hopping on a boat that is headed down river. You can practically float your way to success.

You can make good money in a slow growing industry, but making big money is a heck of a lot easier and your chances of doing so are a heck of a lot higher if you focus on industries with powerful, long-term tailwinds at their backs. When you do this, you can get rich without trying or thinking very hard.

This is just the situation we have in the sports betting industry. A very powerful long-term tailwind is about to start blowing at its back. Invest accordingly.