Talk about crummy timing.
In early February, I released a special portfolio of small stocks to my Early Stage Investor readers.
These stocks met all my strict criteria, and I had big expectations that they could make my readers a lot of money over time.
I know this year is fuzzy for all of us, so let me remind you that early February was right before COVID-19 started to get bad in the United States.
I released the portfolio exactly two weeks before the market began falling into what would become the fastest bear market in history.
So yeah, crummy timing. But I learned a long time ago that the best way to build life-changing wealth doesn’t depend on timing the market
It depends on timing your investment. You want to invest early in innovative companies operating in hypergrowth trends.
Even if my timing in the market isn’t perfect, these smaller companies still have the ability to greatly outperform the larger stock indexes …
More than eight months after I started this portfolio and we endured a 20%+ drop in the indexes, the basket of small stocks now posts an average return of 63%.
The Dow is still down since February 5.
The S&P 500 is a little better, up 4.5%, but this portfolio is beating it by more than 13X.
The Nasdaq has been the strongest index, but our portfolio is still more than double its 23% gain.
What makes this portfolio special? It’s filled with small companies on the cutting edge of innovation. Three have more than doubled … and one has more than tripled in just eight months.
Here’s the important takeaway:
A small company that is part of a long-term growth trend and meets our criteria tends to soar no matter what the economy or stock market is doing.
That said, all small stocks are not created equal. I think we know that. The key is finding the right ones.
I’ll talk much more about my criteria and what I look for when finding these potentially big winners in our special Bull Market Confidential webinar on Tuesday, October 20 at 4 p.m. ET. (It’s free to attend, and you can register quickly here.) But let me share one with you right now …
You want to find companies that are hunting elephants and not mice.
There’s a more technical way to determine that. It’s analyzing the company’s total addressable market, or TAM for short. Simply by doing that, you’re on your way to finding stocks that can turn the average investor into a millionaire.
The TAM is basically the potential size of a specific sector or trend in dollars. The larger the TAM, the bigger a company’s potential.
For example, a restaurant that offers everything from burgers to pizza to vegetarian food has a much larger TAM — or potential market — than a more narrowly focused restaurant that might offer only one thing, say plant-based Ethiopian food.
One good example of a microcap stock that went after a big market and succeeded is Monster Beverage (NASDAQ:MNST).
Monster’s flagship product is an energy drink, full of sugar, caffeine, and other stimulants. It might sound like a niche business, especially if you like to stick with coffee. But Monster Energy became a phenomenon in the early 2000s when a huge shift in consumer tastes was going on. Millennials didn’t want Folgers Coffee. They wanted energy drinks.
The company’s drink revenue went from $50 million in 2003 to $1.7 billion by 2011. And by late 2007, the stock had already gained 16,000%!
Today, this pioneer in energy drinks is a household name, and the stock is now valued at $42.5 billion. The shares have climbed 43% in the past year, which is great, but wouldn’t you prefer those huge early gains?
That’s what Bull Market Confidential is all about.
Buy a stock like that early and you stand to make exponentially more money than you would otherwise.
Yet, in their early days, these companies are rarely followed by Wall Street analysts … often ignored by mainstream news outlets… and completely misunderstood by the average investor.
That’s what makes them such amazing opportunities … and it’s why I’m holding the special online event on Tuesday, October 20.
It’s free to attend, and I hope you’ll be able to join me to learn more about this important opportunity. I’ll even tell you about a specific stock I think has 1,000% potential.
All I ask is that you register, which you can do easily by clicking here now.
I look forward to seeing you then.
On the date of publication, Matthew McCall did not have (either directly or indirectly) any positions in the securities mentioned in this article.
Matthew McCall left Wall Street to actually help investors — by getting them into the world’s biggest, most revolutionary trends BEFORE anyone else. Click here to see what Matt has up his sleeve now.