Last week, we learned that Chinese real estate giant/corporate conglomerate Evergrande (OTCMKTS:EGRNY) is severely lacking in liquidity and couldn’t make payments on its debts.
You don’t need me to tell you that the markets have been quick to react.
The U.S. markets began this week in the red… and are still down more than 2% from their recent peaks.
However, I’ve been preparing you for just such a situation by focusing in on the “megatrends” that will lead us to the best and boldest profit opportunities for the rest of this year and next.
These are the kinds of trends and stocks that should, as I say below, “carry us out of this low”… and thrive over the months and years to come.
- The Second Electric Revolution space, which has gone from a fun “competition” to a foregone conclusion in recent years. Long-duration Vanadium batteries as a partial replacement for “not so green” lithium-ion batteries is one of my favorite stories within this megatrend.
- The long beaten-down travel sector, which is experiencing a “darkness before the dawn.” And with the Covid-19 ban against European travelers being lifted in the U.S. earlier this week, the dawn may come sooner rather than later.
- Lastly, cybersecurity is a major profit opportunity. And with 5G inching ever closer to global deployment, it’s only going to become bigger.
On Tuesday, Sept. 14, I sat down with InvestorPlace CEO Brian Hunt for a special members-only videocast for members of my elite trading service. We talked about each of these trends more in depth — including how they’ve played out for readers of The Speculator.
Because that conversation went so well — and because what we talked about directly connects to this week’s market moves, I’ve decided to share some of it here.
Check out a snippet of our conversation below…
Big Challenges, Big Opportunities
Brian Hunt: So, Eric, over the last 12 months or so, you’ve scored several handfuls of giant gains — 200%, 800%, 1,000% even — and no surprise to me, these gains have largely occurred in some of the megatrends you’ve been writing about over the past several years. So, I was wondering if we could start off talking about the status of these megatrends, how they played out in the last year, and where you see them going over the next few years.
Eric Fry: Sure, well, let’s extend the calendar a bit to the last 18 months. From the lows of the post-Covid-selloff, looking back at that period of time, in hindsight, it was a great time to invest in the stock market — in almost anything. The market tanked, and you had the opportunity to buy a lot of great stocks, but it was obviously a scary time to invest. You had to focus on what’s going to carry out of this low — no matter what. So, we’ve been focusing on trends like what I call the “Second Electric Revolution,” which is the whole transformation of global transportation and power generation network from oil-centric to electric. Electric vehicles, energy storage, and that entire supply chain that goes into those things.
That’s been a big focus for The Speculator, and a number of our big winners have been in that area, in some part of that supply chain. A lot of them have been in the battery metals area, things like the Freeport-McMoRan trade, which delivered over 1,000% gains. And then [our emerging copper play] has been a big winner, and more recently [my nickel-manganese trade] been a big winner… And I think we’re still early in that trade. So, that’s why I closed out the Freeport-McMoRan position that we established at the lows of March 2020, and then reestablished a new trade. Because I think we’ve had a correction in the copper market, and now we’re going to see that market take off again, and we’re going to see battery metals take off again. So that’s a great place to be, I think.
BH: You know, something you frequently point out that really makes the case — we’re really early on in this game, the “Second Electric Revolution.” So much of it is related to what’s going on in transportation, the switch from combustion engines to battery-powered vehicles is the, correct me if I’m wrong, the percentage of vehicles sold in the United States that are electric is still under 5%, right?
EF: That’s correct, yes.
BH: So as big as we think this thing is now, it’s still a relatively small part of the transportation industry.
EF: It’s a tiny market still, but it’s growing. The thing about this revolution is that, like many revolutions, people initially focus on the things that they can see. You know, like a Tesla. That’s the most obvious change. But I don’t even think two years ago that you or I would’ve guessed how electric bicycles would take off, or scooters would take off. So, they’re all over the place now. Every kid’s got an electric bicycle — and that’s not just in the United States. It’s a global phenomenon.
So that’s also incremental demand for things like copper, nickel, and lithium. It isn’t just electric vehicles; when you layer in technologies like energy storage, about which I am extremely bullish, and which I believe is going to surprise almost all experts on the upside because of its adoption, you now have one more layer of demand. So anywhere a company sits there in the supply chain, they should do pretty well.
Call Dibs on the Second Electric Revolution — Before Everyone Else Does
As I repeatedly said during Brian’s and my videocast – and as I repeatedly say here — all investors should keep their eyes on something “the Second Electric Revolution.”
This revolution is powering ahead… and it is creating spectacular opportunities everywhere it goes. But finding the best ways to invest in this revolution is no easy task.
Many leading companies in the electric vehicle (EV) and energy storage sector are losing money. The Chinese EV company Nio (NYSE:NIO) is one high-profile example, but it’s hardly alone.
According to calculations from FT Alphaville, a representative selection of 23 EV manufacturers, nine battery/cell producers and nine charging station businesses recently reached a staggering combined market value of $1.6 trillion.
Incredibly, only six of these 41 EV companies managed to generate a gross profit over the last 12 months. The other 35 were losers.
Therefore, rather than invest in money losers in the EV sector, I have recommended companies that provide essential ingredients to the EV and energy storage industries.
I’m talking about “battery metals.”
To capitalize on these prospective booms, I’ve recommended many battery metals plays, including Freeport-McMoRan (NYSE:FCX) here — up nearly 205% since I made it my entry in the InvestorPlace 10 Best Stocks for 2020 contest.
And I just added a new name to that list (learn how you can get details on this pick here).
So, stay tuned. As more megatrends emerge, you’ll be the first to know.
P.S. I took first place in Wall Street’s biggest investment competition, topping 650 investors. What $56 trillion opportunity is on my radar now? Click here to learn more.
NOTE: On the date of publication, Eric Fry did not own either directly or indirectly any positions in the securities mentioned in this article.
Eric Fry is an award-winning stock picker with numerous “10-bagger” calls — in good markets AND bad. How? By finding potent global megatrends… before they take off. In fact, Eric has recommended 41 different 1,000%+ stock market winners in his career. Plus, he beat 650 of the world’s most famous investors (including Bill Ackman and David Einhorn) in a contest. And today he’s revealing his next potential 1,000% winner for free, right here.