Mindboggling wealth creation is headed our way … using Louis Navellier’s algorithms to sniff out elite Metaverse stocks … investing in tomorrow’s massive winners when they’re private today
Let’s revisit a quote we featured in the Digest less than two weeks ago.
It comes from former hedge fund manager and technology expert, Raoul Pal, speaking about the crypto/blockchain/NFT/Metaverse space:
We have never in all of human history been given an opportunity that an entire asset class, not a stock, not a single token, an entire asset class goes up 100X in value, probably by the end of this decade.
This is I think the largest distribution of wealth and the fastest distribution of wealth in all recorded history.
Because unlike most other wealth distributions, things like railroads, phones, even computers, and even the internet, they accrue to giant companies. This is accruing to tokens which anybody can participate in.
If you missed that Digest, click here to read it. It offers an overview of the value proposition of this amazing sector.
It’s hard to overstate just how enormous this ecosystem will be – both in terms of changing our world, and creating dynastic wealth through the right investments.
Today, let’s dive into “how” to invest in this space because there are countless ways.
You can invest in specific cryptocurrencies… NFTs (non-fungible tokens), which are a bit like “digital art,” but are quickly adding robust functionality as well… then there are stocks like Coinbase that facilitate crypto transactions… stocks like Roblox, that provide games/services within the Metaverse… stocks like Nvidia, that provide crucial components for the sector’s technical buildout… or perhaps Meta (formerly Facebook) which is focusing its entire business strategy on the Metaverse… or even publicly-trade crypto mining companies…
The opportunities are enormous, and over the coming months, quarters, and years, we’ll be unearthing them for you here in the Digest.
Today, let’s look at two ways to get involved.
***Borrowing Louis Navellier’s research to create your own world-class metaverse portfolio
Full credit for this idea goes to my fellow-Digest-writer, Luis Hernandez, whom we feature in our weekly Saturday edition.
Last week, Luis sent me an email suggesting a simple but powerful approach to investing in this space…
Use Louis Navellier’s Portfolio Grader tool to sniff out the top stocks in various Metaverse/blockchain/crypto ETFs, then create your own portfolio.
To make sure newer Digest readers are on the same page, Louis Navellier is a legendary quantitative investor. As a “quant,” he has strict investment rules that are rooted in cold, impartial numbers.
Fortunately for you and me, Louis has codified much of his proprietary system, and now offers it to the investment community in the form of his free Portfolio Grader tool.
Think of it a diagnostic that gives investors an instant snapshot of a stock’s financial strength. It focuses on eight metrics:
- sales growth
- operating margin growth
- earnings growth
- earnings momentum
- earnings surprises
- analyst earnings revisions
- free cash flow
- return on equity
It’s a fast, free, easy way to get a professional-level “report card” on your stocks.
***Applying Luis’ idea to Louis’ stock selection algorithm
There are a handful of Metaverse/blockchain/NFT/crypto ETFs available to investors today.
As three examples, there’s the Roundhill Metaverse ETF (META)… the Amplify Blockchain ETF (BLOK)… and the Fount Metaverse ETF (MTVR).
If we look under the hood of these ETFs at their holdings, we see some of the same names, but plenty of different ones.
Below, I’ve compiled many of the top-10 holdings from each ETF into one master list.
- Unity Software
- Warner Music Group
- Silvergate Capital
- Hut 8 Mining Corp.
- Riot Blockchain
- HIVE Blockchain Technologies.
When we run them through Louis’ proprietary Portfolio Grader, here’s what we find:
Some interesting scores in there.
HIVE Blockchain Technologies and Bitfarms both nab “A” ratings.
Lots of “B” scores.
But “C” comes up a fair amount – even a “D”.
Obviously, if you buy one of these ETFs, you’re not necessarily getting the best of the best. So, why not create your own, superior mini-portfolio using Louis’ strict quantitative algorithms?
By the way, in doing this, you’re avoiding the expense ratios of these ETFS. META’s is 0.75%. BLOK’s is 0.71%. And MTVR’s is 0.70.
***A second, incredibly exciting way to invest in the Metaverse/blockchain/NFT/crypto space
How would you have liked to invest in Amazon years ago…when it was still a tiny, private company?
Many of the monster Metaverse/blockchain/NFT/crypto winners of tomorrow are small, private companies today.
Now, yes – many, if not most start-up companies won’t make it. But an elite few will. And by the time they go public, attracting the investment dollars of the masses, early investors stand to have made – literally – thousands of percent returns on their initial investments.
That’s not hyperbole.
When Snap Inc. went public back in 2017, Lightspeed Venture partners saw their $8M early investment grow to about $2B. That’s a 24,900% return, or nearly a 250-bagger.
When Cisco acquired Cerent back in 1999. Kleiner Perkins Caufield & Byers turned another $8 million into $2.1 billion. That was a 26,150% return, or a 261-bagger.
Then there’s Chris Sacca of Lowercase Capital and the hit show, Shark Tank. He’s reported to have turned $2.45 million into $2 billion from his early stake in Uber. That’s a return of more than 81,000%, or an 815-bagger.
***Our own private investing expert, Cody Shirk, believes enormous wealth will be created by the Metaverse and its broader ecosystem
From Cody’s recent issue of Venture Capital Digest:
When I see an obvious trend that most people are ignoring, I immediately know there is an enormous opportunity to create massive amounts of wealth…
To be fair, there is already a lot of traction in this market. The metaverse is not as “hidden” as other private investment opportunities.
But the sheer size of this new trend makes up for the fact that there are already billions of dollars being made.
In Cody’s update, he walks through lots of ways to begin making a return from Metaverse investments today. But he points out that investors who go the “public” route aren’t maximizing their potential returns.
Back to Cody:
From an investment perspective, you can take the easy road and just buy stock in companies, such as Meta/FB, that are jumping on the metaverse trend.
But that’s not how I maximize returns on new trends.
The most strategic and profitable way to target a new trend is to find private companies that haven’t hit the public markets yet.
There is far, far more upside in private companies… especially private companies that are targeting trends in their infancy.
In past Digests, Cody has recommended investors look into private investing platforms such as WeFunder, Republic, and SeedInvest.
Cody says that on those sites, you can “browse through deals just as if you were looking at a magazine with cool bicycles or something. Think of it as window-shopping, looking at what kind of deals are out there.”
***Right now – today – you can sign up for these investment platforms and find private companies doing amazing things in this sector
I can tell you from personal experience that there’s rapid growth here.
In mid-September, I invested in a private company through the Angel List platform. Its goal is to simplify the creation, buying, and selling of NFTs.
I invested in a round in which this company was valuing itself at $15 million.
Barely six weeks later, this same company was back in the private equity market. And based on its growth in that interim, it was raising money at a new, $40 million valuation.
Now, this doesn’t mean the investment will be a homerun. But it reflects the massive growth in this market.
Also, consider if this specific company goes public one day, eventually trading at an average large-cap valuation of, say, $5 billion.
That puts the market-cap growth percentage at more than 33,200%. Now, this ignores the reality of dilution. And the odds of this potential investment being such a monster winner are low. But these stories happen.
Back to Cody:
While there have already been numerous eye-popping transactions with billions of dollars changing hands on a weekly basis, we’re only scratching the surface of this metaverse trend.
Where things will end up is anyone’s guess. But as private investors, this is an opportunity we can’t ignore.
By learning about all of this now (and taking some small investment positions), we’ll be putting ourselves into a very strategic position to make enormous gains over the coming years.
We’ll be revisiting this trend in the coming months.
And we’re keeping an eye out for attractive private investments. Specifically, I’m looking for companies that are building the infrastructure that facilitates the functionality of the metaverse.
By the way, Cody’s comments come from his free investment newsletter, the Venture Capital Digest. In it, Cody shares tips and tricks to private investing… trends he’s tracking… even deals that catch his eye. It’s a fantastic way to keep a finger on the pulse of the venture capital world. Click here to sign up.
Bottom-line, we’re in the right place at the right time to be a part of extraordinary wealth creation this decade. We can’t wait to keep you up to speed here in the Digest as this amazing world comes to life before our eyes.
Have a good evening,