Hello from Beijing!
That’s right. I’m writing to you from China. It was a long journey to get here, but it’s worth it, because I am taking full advantage and doing some of the boots-on-the-ground research that is so important. It’s something a lot of analysts don’t make the effort to do.
My timing worked out well because China has once again been in the headlines amid the back-and-forth on tariffs and trade issues with the U.S. It’s clearly affected the market, which has been driven by tweets, headlines, and rumors.
Is it all just noise? Or something more concerning?
I see it more as noise… like an annoying rattle in your car that you really want to get rid of but doesn’t mean the car is broken. Both sides want a deal. And from what I’ve seen, the overriding theme in China is that they want a deal ASAP.
President Trump and Chinese President Xi Jinping are scheduled to meet at the G-20 summit in Japan next month, and a lot of us will be watching closely. But until a new trade deal is locked in, we should expect more volatility.
Remember two things:
- The best way to build wealth is to go after huge profits in massive trends that will play out over many years. Don’t stress over short-term price swings.
- Volatility is your friend. It creates great buying opportunities.
You want to take full advantage of those opportunities. And that’s definitely the story with China right now.
Growth and Government Support
A lot of investors are staying away from China, but that’s a mistake. The opportunities here are varied – from leading technologies like artificial intelligence and autonomous vehicles (AVs) to an emerging biotechnology industry.
Let’s start with biotech. This is a rare 100X opportunity – yes you read that right – that I am confident will hand early investors gigantic returns over the next five-10 years.
How do I figure that? Well, the first answer is that the government has basically told us.
The powerful Chinese government has publicly stated that the country’s biotech industry should grow 116X… in just two years! That’s bold even by Chinese government standards, but the government wouldn’t make that proclamation if it didn’t mean it. And if it ends up taking five years to get there instead of two, who really cares when you’re talking about that kind of growth?
This isn’t the first time the Chinese government has backed an industry with what appeared to be unrealistic goals. Ten years ago, the government was determined to grow the nation’s technology industry. It was a great opportunity for investors.
During the same time, a little known technology company was starting to gather assets and extend its tentacles into all aspects of tech. It was a major beneficiary of the government’s support.
Today, Tencent Holdings (TCEHY) is one of the largest companies in the world. At one point last year its valuation topped $550 billion. It was even mentioned as one of the leading candidates to be the next trillion dollar stock behind Apple (AAPL) and Amazon (AMZN).
Tencent rose an eye-popping 67,000% from its IPO in 2004 through January 2018 before it was hit with the Chinese market sell-off. Shares are once again rallying since their recent low last October. The company’s market cap is back up to $440 billion, so even with last year’s weakness, the gains in Tencent and other Chinese technology companies helped make average investors wealthy.
That’s exactly what I expect will happen with the Chinese biotech industry in the coming years. I will share more with you in the coming weeks.
Joining the AV Revolution
Chinese biotech isn’t the only opportunity brewing in the second-largest economy in the world. The government is also pushing to catch up in the race (so to speak) toward self-driving cars.
The government’s target date for widespread adoption of early stage autonomous vehicles is 2020. Ten years later, it wants 10% of all new vehicles to be fully self-driving.
In fact, one of my recommended companies in Investment Opportunities recently announced it will open a center in China to focus on “level four” driving technologies. That’s one level away from fully autonomous. Management sees strong demand for AVs in China, and I think they’re right.
Why the focus on AVs?
Because they are the catalyst for a historic economic revolution… one that will totally reshape the way we work, play, communicate, and travel.
Think something as impactful as the printing press, the internet, or the telephone.
This revolution will not be measured in the billions of dollars, but in the trillions of dollars. Intel says the market could be worth $7 trillion in annual revenue when the situation fully plays out. And yes, you read that right. It is $7 trillion with a “T”.
Believe, me, Intel knows a thing or two about this sector. It invested an astounding $15.3 billion to buy the self-driving car technology leader Mobileye.
In fact, many of the world’s smartest, richest, most powerful entrepreneurs and investors are working day and night to dominate the self-driving car market. The companies trying to get their share of this enormous market represent a “who’s who” of the technology and manufacturing world.
And early investors stand to make a windfall. I have no doubt the winners of this AV race will see their stock market values multiply many times over… taking investors along for the ride of their lives. I expect China, with the backing of its government, to be a major player.
P.S. As autonomous vehicles go mainstream in China and around the world, I’m absolutely convinced their adoption will create huge fortunes at incredible rates of speed. If you can claim a small stake in the companies developing this technology now, you could benefit from one of the rarest, most powerful economic forces in history.
I just recommended a Chinese company that is the leader in AV miles driven here in Beijing. The pullback is giving us a great buying opportunity in this successful company.
Plus, the absolute best self-driving car stock isn’t well-known like Google or Uber. This is a company I can all but guarantee you’ve never heard of. But a modest one-time investment now could turn into an absolute fortune over time. Learn more about this incredible story right here.
Learn where Matt McCall sees
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