Why buy and hold investing isn’t enough in the AI era
In business and investing, we can’t underestimate the importance of seeing what’s coming next.
This isn’t about reading tea leaves or using a Magic 8 Ball. It’s about analyzing facts and positioning yourself to benefit from what’s coming.
For example, Jeff Bezos didn’t just stumble into Amazon. He noticed internet adoption was growing rapidly and had an idea about what the future would look like. He quit a successful Wall Street career and launched an online bookstore before most people had even logged onto the web.
Netflix has a similar story. CEO Reed Hastings saw that broadband adoption would eventually make streaming viable. While Blockbuster was collecting late fees, he built Netflix to take advantage of streaming even before the infrastructure was fully in place.
While traveling in Italy, Howard Schulz noticed that coffee was about more than just getting your morning caffeine – it was about culture, ritual, and experience. While others sold beans, Schultz built Starbucks into a global lifestyle brand.
The lesson is simple: success often belongs to those who spot the opportunity before it’s obvious and act decisively.
But in the investing world, the dominant narrative is different.
Everyone wants to be like Warren Buffett.
It only makes sense. His track record at Berkshire-Hathaway is a marvel to behold.
According to Bloomberg, from 1965 to 2024, Berkshire-Hathaway averaged annualized returns of 19.9%.
Buffett’s net worth is estimated to be $154 billion as of August 2025, according to Forbes. This makes him the 6th wealthiest individual in the world.
Buffett grew his wealth using a strategy he describes as “buying good companies at a fair price.”
When it comes to holding periods, Buffett is famously quoted as saying, “Our favorite holding period is forever.”
But forever is a long time.
Bezos, Hastings and Schulz remind us that markets don’t reward patience alone. They reward timing.
A method exists to determine the right time to buy a stock and take profits without holding forever.
Investing for Cash Flow
At the InvestorPlace, we’re big believers in holding stocks for long periods. It’s a great way to build long-term wealth.
But it’s also true that part of your portfolio can be dedicated to picking up the fast cash that the market offers right now. Money that can be used to fund your long-term holdings … or a vacation, or college tuition, or maybe just helping you reduce financial worry.
How can you take advantage of these cash-generating opportunities? By finding stocks that are breaking into rapid, sustained uptrends.
Most investors don’t appreciate that stocks don’t move in a straight line. They move in stages.
Even great companies experience long stretches when they do little more than drift sideways. Take a great company like Microsoft – it went sideways for more than a decade.
And while you’re waiting for those kinds of stocks to rise, inflation chips away at your gains and better opportunities pass you by.
So, how do you spot cash-generating moments?
Every stock follows the same predictable pattern with four phases – Phase 1: Introduction, Phase 2: Growth, Phase 3: Maturity, Phase 4: Decline. In some of those phases, stocks rise. In other phases, stocks fall.
The key to making income during a short period in any stock, in any market, at any time, is to buy stocks during Phase 2, the growth phase, and selling when they enter Phase 3, the maturity phase.
It is a simple secret to generating wealth on Wall Street. Yet, few people do it because the Warren Buffett “buy-and-hold-forever” narrative is so dominant.
If you learn about this hidden pattern, you could be equipped with an almost unfair advantage over every other investor.
Hypergrowth investing expert Luke Lango has developed a specific system to find stocks just as they enter Phase 2 – in that sweet spot before everyone else moves into the stock and sends it soaring.
And right now, the AI megatrend is sending stocks higher faster than ever before. Here is how he describes it:
There’s something really unique happening in the markets right now. More and more companies are leveraging the power of AI to develop new technologies, become more productive, and save on costs.
And this isn’t just improving their businesses by a little.
It’s causing some businesses to absolutely boom, as we’ve never seen before.
And their stock prices are responding by going absolutely vertical.
One great example is Super Micro Computer Inc. (SMCI). You can see below that SMCI entered Phase 2 in January 2024 and rolled over into Phase 3 just two months later.
In between, knowledgeable investors – those who knew how to find stocks at the right phase – had the chance to make more than 300% in about two months.
And the number of stocks offering these kinds of opportunities is only growing due to the AI megatrend. AI investing is dominating the media, but the headlines mostly focus on big stocks such as Nvidia or Microsoft.
You usually don’t hear about the smaller stocks that are soaring like SMCI.
People are missing out on the story of these stocks and their rapid growth. But Luke’s system is sending him signals that many opportunities like SMCI are still coming. Here is Luke again:
There’s still a lot of these AI Income Events that are going to be showing up in the markets in the next several months.
Including three really big moves my team and I just uncovered.
You see, I’ve found a systematic way to help me and my team pinpoint these events before they happen.
And each one could result in a huge payout opportunity.
AI is moving rapidly from an experimental phase to widespread implementation. As this happens, investment opportunities are going to occur that we may never see again in our lifetimes.
But this window of multiple stocks entering Phase 2 isn’t going to last forever.
Luke believes there are only 12 to 18 months before AI reaches maturity. When that happens, these explosive AI Income Events will become much rarer.
AI itself is currently in Phase 2 – the growth phase. This means investors have an opportunity to capture these big moves before the technology reaches maturity.
Holding high quality stocks for a long period is a great way to invest, but dedicating a slice of your portfolio to short-term, high-conviction Phase 2 plays isn’t reckless—it’s practical.
It’s about putting your capital where the momentum is strongest and generating cash you can use. That’s what Luke explains about how to find these AI Income Events. You can view the free presentation by clicking here.
The buy-and-hold crowd may wait forever for their payday. But smart investors know: forever is too long to wait.
Enjoy your weekend
Luis Hernandez
Editor in Chief, InvestorPlace
