Do you know who said, “If I had asked people what they wanted, they would have said faster horses.”
It’s attributed to Henry Ford, inventor of the first mass-produced car. Ford knew an important truth: People have no clue what they really want until you show it to them.
In a rare interview with Harvard Business School that was published online earlier this month, (it has since been taken down) value investor Seth Klarman spoke at length about his investment process, philosophy and the changes value investors have had to overcome during the past decade. Klarman’s hedge fund, the Boston-based Baupost has one of Read More
That’s because of “faulty wiring” in the human brain. We humans default to thinking “linearly.” We’re good at observing what’s happening today and extrapolating it to tomorrow, which lets us anticipate small, slow, incremental changes.
But when something BIG changes in the markets and something totally new comes along, like today, linear thinkers get left behind.
You see, “linear thinking” is fine in most areas of life: but it’s poison to your investment returns. Linear thinkers can anticipate “ordinary” progress just fine. Computers get a little faster every year, cars get a little safer, video game graphics get a little crisper.
Any ordinary investor knows this. That’s why you’ll be settling for ordinary investment returns of 4–8% per year if you invest in companies making improvements little by little.
On the other hand, you’ll make BIG money if you invest in the non-linear “leaps” in progress that are happening all around us. If you can break away from the same old way of thinking and investing that everyone else uses, you’ll have no shortage of opportunities to make 200%, 250%, 300% profits on hypergrowing stocks within months.
As you probably know, the know the world is changing faster than ever. And dozens of new technologies are breaking through at supersonic speed.
But right now, in the autumn of 2020, we’ve reached a tipping point. This rapid growth is spilling over into the stock market like never before. It’s created a quiet bonanza in fast-growing stocks. And if you act decisively, you stand to collect bigger investing profits in the next year than most folks see in a decade.
3 New Investing Forces You Can't Ignore
- Businesses are growing faster than ever before.
Today a small team of computer programmers can quickly build a fast-growing business to a size that used to require thousands of employees to pull off.
Consider that Apple took 23 years to reach a $10 billion market cap. Microsoft did it in 11. But today’s new tech businesses are running circles around them. Taxi disruptor Uber went from zero to $10 billion in about 3 years. Social network Snapchat achieved it in 2 ½ years. Most recently, electronic cigarette company Juul Labs achieved it in just 7 months!
- New and exciting industries are being born every day.
Blink and you’ll miss them. And I’m not talking about 5G and 3D printing. Those are “old news” compared to what’s happening right now.
New industries like “connected fitness” and “telehealth” seemingly came out of nowhere to mint huge stock market profits. Telehealth pioneers Livongo (LVGO) and Teladoc (TDOC) shot up 464% and 160% this year. Virtual exercise company Peloton (PTON) has soared 257%.
Then there’s “synthetic biology,” which allows scientists to “program” living things like you would a computer! This one leap in progress alone is already starting to carve out half a dozen new industries.
You’ve also got space stocks, holographic meetings, and hydrogen-powered trucks. The list goes on and on, and will be bigger tomorrow.
- New money is gushing, and it’s not going to stop.
Take a quick look at this chart from the US government. It shows the amount of money in circulation in America:
You can see it’s shot off like a geyser, as trillions of new dollars are being created and shoved into the economy. The amount of money being borrowed and spent right now is off the charts.
According to Reuters, global governments will flood the world with $15 trillion this year to fight the coronavirus economic freeze.
All of this new money is guaranteed to boost the price of certain stocks. If you can correctly apply this knowledge to the stock market, the rewards you stand to make are massive On their own, each of these investing forces would be a huge opportunity. But today, they’re all merging for the first time ever. And that’s something you can’t afford to ignore.
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Article By Stephen McBride