We are entering a new era of investing. The 4th Industrial Revolution and the Roaring 20s are commencing, which has already restructured the equity markets. The world's largest publicly traded companies are no longer a diverse set of highly profitable businesses. Tech enterprises have taken over the trade and will be the primary market drivers for decades to come.
We are standing at the edge of a digital revolution that is already transforming the global economy. We are still on the ground floor of many market-disrupting opportunities. With companies releasing their shares to the public markets at a record pace, the profit opportunities appear endless.
Back in September, 2019, I recommended that investors prepare for the 4th Revolution by jumping on Twilio and NVIDIA. Within 16 months they gained +191.2% and +197.3% respectively.
In January, 2020, I directed attention to the FAANG of the Roaring 20’s. One year later, those who bought Sea Limited, CRISPR Therapeutics, Alibaba, NVIDIA (again), and Splunk scored gains up to +413.6%.
If you miss opportunities like these in the months and years ahead, you may never live it down.
Life-changing technologies like cloud computing, the internet of things (IoT), big data, and artificial intelligence (AI) are still in a nascent stage of development. These technologies are becoming essential for enterprises to remain competitive in this digital age.
Analysts estimate significant double-digit annual growth figures for each of these next-generation spaces, and the returns on the right stock picks could be much greater. COVID-19 has accelerated the global economy's digital transformation by years in a matter of months. This has been illustrated in many technology companies' meteoric share price surges since the March lows.
The Pandemic Effect
The microscopic terror that cut off social interaction wasn't enough to shut down corporate America. Our economy survived because of digital technology that has enabled society to work, socialize, shop, play, and be entertained without leaving your room.
Cloud computing, smartphones, laptops, and internet of things devices have allowed us to work and operate from almost anywhere on earth. The adaptation of this technology and other groundbreaking innovations have become essential to today's civilized world. The ability to rapidly acclimate to new technology is now ingrained in our economy and our culture.
Digital advancement is only going to accelerate throughout the Roaring 20s, and the world is more than ready for this digital explosion. The economy's ability to swiftly adapt to fresh innovation is going to drive the prolific investment opportunities in the commencing technological revolution.
Continued . . .
Notice to Zacks Members
Today, we’re temporarily reopening our newest portfolio service to a limited number of investors. Launched in February, demand for this service greatly exceeded expectations. It catches stocks with strong fundamentals and earnings estimate revisions just as they’re ignited by developments in the news.
The rewards can be quick and sometimes very substantial. Zacks stock-picking phenom Daniel Laboe has previously used this approach to catch gains like Tesla’s +810.0% in 13 months … QuantumScape’s +224.3% in 3 months … Target’s +95.0% in 17 months … Square’s +285.4% in 14 months … Sea Limited’s +413.6% in 1 year … and Micro Strategy’s +93.9% in 6 weeks.¹
Deadline for access: Sunday, May 9.
See Stocks Now >>
The Rise of the Retail Investor
There are more retail investors & traders in the market today than ever before, with the financial markets' democratization. Silicon Valley unicorn startup Robinhood and its commission-free mobile trading application took the online brokerage space by storm.
Robinhood forced the hand of all major online brokerage firms to cut their trading fees to 0 in order to remain competitive, players like TD Ameritrade (TD), Charles Schwab (SCHW), Fidelity, and E-Trade (MS). These 4 cohorts had controlled the online brokerage space and its pricing for decades, but not anymore.
With virtually no barriers to entry and extra money, money-hungry retail investors are rushing into the markets like there is no tomorrow. U.S. households saved $2.9 trillion last year and are now putting some of that money to work in the markets.
A new cohort of investors/traders are entering the market at a record pace, and they are doing more than just gambling. The retail-driven short-squeeze in stocks like GameStop (GME), AMC (AMC), and others was just a sideshow. Most retail investors bring about a more rational approach to investing: the classic buy and hold strategy. 2020 was a record year for ETFs with net inflows of more than $500 billion, surpassing the 2017 ETF dash by north of $40 billion. I expect this record to be broken repeatedly as the passive investment strategy outpaces 90% of actively managed hedge funds.
The 10s of millions of new investors buying and holding onto company shares with no intentions of selling in the near future are taking down the broader markets floating shares (or just float). I believe this could have an impact on long-term valuation multiples. Lower share supply (even just marginally) and less selling pressure (with less actively traded funds) could lead to a new standard of higher valuation multiples.
Almost Unfathomable Upside Opportunity
At Zacks we launched a new portfolio service to take full advantage of this historic time for the stock market. Until midnight Sunday, you are invited to gain access to our Headline Trader.
As director of the portfolio, I constantly monitor stocks with strong fundamentals and rising earnings estimates, watching for the first stirring of movement, checking for headlines and upcoming events.
With vaccines in full-blown rollout and pent-up economic demand only starting to unleash, this is an exceptional time to profit from positive news. Using the same approach that Headline Trader is built around, I’ve been able to follow breaking developments to multiple big winners. Here are five examples of my news-based stock recommendations:¹
• Tesla’s +810.0% leap. My article, Tesla, the Year It Finally Meets Management Goals included a recommendation which gave readers the profit from that explosive growth.
• Target’s +95.0% burst was our answer to Who Will Survive the Retail Apocalypse?
• Sea Limited’s ridiculous +413.6% gain could have been shared (along with 4 other soon-to-be stock winners) by readers of The FAANG of the Roaring 20’s.
• Quick +53.8% jump on Goldman Sachs could have been bagged by readers of Election Day Rally.
• Taiwan Semiconductor’s +136.2% boom was presaged by Largest Contracted Chip Manufacturer Set to Open Plant in Arizona.
Less frequently, we can also profit by shorting stocks affected by bad news, so this portfolio can make money no matter which way the markets are heading.
Please note that the number of investors who view our Headline Trader moves is limited. The portfolio was launched last February and then quickly closed due to excessive demand. Now it’s opened up again, but the deadline for entry is Sunday, May 9. Sorry, no extensions.
Check out Zacks’ Headline Trader right now >>
Daniel has expertise in technical trading, corporate finance, and the monitoring and interpretation of breaking news. As editor of our newest portfolio, he invites you to try Zacks Headline Trader.
¹ The results listed above are not (or may not be) representative of the performance of all selections made by Zacks Investment Research's newsletter editors and may represent the partial close of a position.