The tension between high stock market valuations and inflation … how hypergrowth stocks could be the answer … how to track hypergrowth trends for free
There’s always a reason not to invest.
It could be the macro situation — worrying employment numbers, rising tax rates, slowing GDP …
It could be company specific — new competitors, shrinking margins, cutting-edge technologies …
If you look hard enough, you can always find defensible reasons to keep your money out of the market.
But as anxious investors watch, quality stocks often churn higher.
It’s a bit like John Lennon’s quote, “life is what happens while you are busy making other plans.” Except in this case, it’s “stock market wealth is what builds while you are busy finding reasons to be worried.”
Today, there are many reasons to stand on the sidelines — and they’re entirely valid.
In fact, if an investor looked at this market and said “given valuations, the pandemic, and unemployment, I don’t want a piece of this” it would be hard to fault him for such a perspective.
But what then?
In Monday’s Digest, we explored the growing threat of inflation, and how it could erode the purchasing power of dollars in the quarters and years to come.
In light of this, MicroStrategy’s CEO, Michael Saylor just moved the bulk of his company’s $500 million in cash-equivalents into bitcoin because, as he put it, “we really felt we were on a $500M melting ice cube.”
Your savings account is melting too …
Of course, this leaves anxious investors in a tough place.
Put your money in today’s market to generate a return …yet risk a knife-edge drop …
Or leave your money in cash while the slow-erosion of inflation eats away at it …
Today, let’s explore a possible alternative.
It’s not for everyone, and it won’t free you from volatility, but it’s a way to invest that gives you exposure to a climbing market today, and potentially major gains down the road, even if there’s some weakness in between.
***The near- and long-term benefits of investing alongside hypergrowth trends
Hypergrowth trends are exactly what the name implies …
They’re macro trends that are reshaping our world and investment markets, and they’re growing at hyper speeds.
Right now, we see hypergrowth trends emerging from many sectors — 5G technologies, artificial intelligence, electric vehicles, precision medicine, 3D printing, battery technology, green energy, and the budding space travel industry, to name a few.
Today’s top-tier hypergrowth stocks offer investors two benefits …
One, given the excitement swirling about them and their growth prospects, combined with their (usually) very small size, they’re often among the biggest market winners.
So, if you’re looking to capitalize on today’s market-strength, these are the stocks that can help you.
Two, because these stocks are at the cutting-edge of the massive trends that will be reshaping our world over the coming years, they have long legs.
For example, will there be more or fewer electric and autonomous vehicles on the road in a decade? Will demand for solar energy be up or down? Will everyday people be taking more trips into space or fewer trips?
The obvious “more” answer to all these questions helps support the growth of these companies from a long-term investment perspective.
So, we have market-leading gains in a bullish stock environment, and we have long-term fundamental strength thanks to a snowballing trend.
It’s the middle part that gets gray. But more on that in a moment …
***While all of our InvestorPlace analysts help their subscribers benefit from hypergrowth trends to some degree, there’s only one service that’s focused exclusively on them
And that’s The Daily 10X Stock Report, helmed by Luke Lango.
For newer Digest readers, the “Daily 10X,” as we often call it, was created back in the spring for one purpose:
Deliver to your inbox — every day the market is open — a top-notch small-cap stock pick that could rise by 1,000% or more in the long run.
That’s the line-in-the-sand that we believe is possible when investing in leading hypergrowth stocks.
Now, a moment ago, we noted that hypergrowth stocks often are the market leaders, helping investors generate big returns in a strong market.
In light of this, reason would suggest that the Daily 10X would have some big gains attached, even though it’s been around less than a year.
On that note, here’s Luke from his Saturday update to subscribers:
The average return across all 182 of our stock picks since May? A jaw-dropping 117%.
The percent of picks that have had positive returns? An impressive 85%.
How many stocks have doubled? 74 — meaning 40% of our picks have risen at least 100%.
That’s two out of every five picks. So, considering we give you five picks a week, the data says you can expect two picks a week to realistically double.
And, of course, the most important number … how many 10X stock picks have we delivered?
Four so far — and we have plenty of stocks in the up 500%, up 600%, and up 700% range that look ready to soar into 10X territory soon.
Here’s our Daily 10X Monthly Scorecard:
What’s most interesting to me about all of this is Luke’s perspective — it ties in with our earlier conversation about short-term gains versus long-term investment wealth.
Back to Luke (underline added):
The world is changing faster today than it ever has before.
Self-driving cars are becoming a reality. Artificial intelligence is automating tasks. Robots are replacing jobs. Plant-based foods are taking over grocery stores. Genetic editing is giving us a chance to cure disease. Clean energy is replacing fossil fuel.
And by investing in all of the world’s most powerful and disruptive forces, we aren’t here to score a quick buck — we’re here to generate life-changing wealth.
It’s almost as though the recent, fast gains are an afterthought … or rather, a preview of bigger gains to come.
So, with leading hypergrowth stocks, we have advantages in the near-term as well as the long-term.
***But what about that gray middle area?
At the top of this Digest, we noted how a hypergrowth stock strategy isn’t for everyone.
That’s not because hypergrowth stocks have some intrinsic flaw, but because even high-quality stocks can suffer major drawdowns.
Today, there are legitimate reasons why the market could sell off sharply. You should not have your money invested unless you’re aware of these reasons and are comfortable with that risk.
Given this, if you’re approaching or in retirement with a nest egg that can’t take a big hit, we wouldn’t recommend you have a significant chunk of your assets in stocks. Or, if you do, it’s critical that you use stop-losses or position-sizing to prevent a greater loss than you could afford.
But for those of you who have the ability to invest and let your money ride, then top-tier hypergrowth stocks offers a powerful answer to “what do I do with my money today?”
***To understand why, remember the distinction between a stock price and core business operations
Let’s say the market tanks 35% tomorrow.
Hypergrowth Stock A is caught up in this and loses, let’s call it, 44%, of value. That would be painful for any investor in Hypergrowth Stock A, no doubt about it.
But a stock collapse isn’t the same as a business collapse. So, what happens in the coming quarters and years?
Well, let’s say that the sector continues growing thanks to a major trend … meanwhile, more people become customers of this hypergrowth business … market share grows … profits continue snowballing …
When the stock market eventually turns from bad to good, what happens to Hypergrowth Stock A? It goes back to being a market leader.
As easy illustration is Apple.
From September 18, 2012 through April 19, 2013, Apple fell 44% — same as our hypothetical above …
But Apple’s stock wasn’t the same as Apple’s core business.
During that time, the company was still innovating, growing, exploring new opportunities …
Eventually, the market woke up to the value that Apple had been creating while Wall Street had been punishing the stock.
The investors who had focused on Apple’s business, rather than its stock price, were rewarded.
Starting from that same September 18, 2012 date and including the 44% drawdown that was directly in front of it, Apple’s stock is now up 527%.
This distinction between a company’s stock and its fundamental operations has been at the heart of Warren Buffett’s approach for years.
I never attempt to make money on the stock market. I buy on the assumption that they could close the market the next day and not reopen it for five years.
Yes, hypergrowth stocks can pop higher in the near-term. Luke’s track record is evidence of this. And if this market continues climbing, these stocks should be at the top of the leaderboard.
But if this market turns over, the trends powering these companies aren’t going anywhere. We’re still going to need 5G, and electric cars, and innovative healthcare …
So, as long as the hypergrowth-company continues to grow too, the stock price will take care of itself in time.
If you’re not sure what to do with your money today, look at top-tier hypergrowth stocks. As a start, I’d recommend you sign up for Luke’s free e-letter, Hypergrowth Investing.
Each week, he provides his insights into the cutting-edge breakthroughs that are reshaping our world.
In recent months, he has been zeroing in on green energy, 3D printing, aviation technology, the robotic revolution, electric vehicles, next-gen fintech, software, and legalized sports betting, in addition to the early trends we named.
Best of all, just for signing up, you’ll get Luke’s report “7 Hypergrowth Stocks to Buy for 2021” — it’s a free bonus report for signing up for a free service … not a bad deal.
We’ll continue to keep you up to speed on Luke’s hypergrowth trends here in the Digest.
Have a good evening,