Investors who take my advice often ask me this question: Who do you listen to?
Not other investment advisors, generally.
I prefer to do my own due diligence and reach my conclusions based on my research, plus 36 years of experience.
However, there are a few individuals who have taught me a lot and – indirectly – helped make my readers a lot of money.
One of them is Peter Diamandis.
Diamandis is not an economist, business analyst or stock picker.
He is an engineer, physician, entrepreneur and bestselling author with his finger on the pulse of dramatic innovations occurring in virtually every field today.
He is the founder and chairman of the X Prize Foundation, executive founder and director of Singularity University, co-founder of the Zero Gravity Corporation, co-founder and vice chairman of Space Adventures, founder and chairman of Rocket Racing League, co-founder of International Space University, co-founder of Planetary Resources, co-founder of Celularity, founder of Students for the Exploration and Development of Space, and vice chairman and co-founder of Human Longevity Inc.
It’s hard to look at that list and not feel like a bit of an underachiever.
Diamandis is tied to developments taking place in biotechnology, cloud computing, networks, sensors, robotics, artificial intelligence, genetics, 3D printing, nanotechnology, blockchain, automated and virtual reality (AR/VR), and dozens of other fields.
Some call Diamandis a “techno-optimist.”
He believes that innovations in science, technology and medicine are leading us into an era of unprecedented prosperity.
I would call him a rational optimist.
Like me, he maintains a data-based optimism about the future.
While most people fret about failures, setbacks and even full-blown crises like the pandemic, Diamandis focuses on technological progress happening at an exponential rate.
And he expects it to accelerate in the months and years ahead, thanks to what he calls the “Six D’s.”
- Digitization. Communications, news, knowledge, photos, videos, music and much more now travel the world instantly.
- Deception. We don’t notice exponential growth in the digital realm because it is invisible to the naked eye. (But the impact is impossible to ignore.)
- Disruption. Digital technologies improve effectiveness and reduce costs, disrupting and transforming existing industries.
- Demonetization. As technology becomes cheaper, money becomes less of a factor. (You can already download limitless apps to access terabytes of information – and a multitude of services – at a cost approaching zero.)
- Dematerialization. Physical products that you used to buy – calculators, alarm clocks, CDs, DVDs, maps, GPS devices, radios, cameras, camcorders, voice recorders and much more – now sit on the smartphone in your pocket instead.
- Democracy. Once something is digitized, more people have access to it. Powerful technologies now belong to us all, not just governments, big business and the uber-wealthy.
What does all this have to do with making money in stocks?
If you want to generate higher returns in the market, stop trying to outguess the economy and the market. Instead, think about business.
Especially the great innovators.
For example, my subscribers locked in profits in dozens of companies last year.
The list includes companies like Datadog, ServiceNow, Neurocrine Biosciences, Teradyne, Tyler Technologies, Quidel, Evoqua Water Technologies, Pacira BioSciences, Axon Enterprise, 10x Genomics, ZTO Express and SolarEdge Technologies.
These are cutting-edge companies that dominate their fields. But it’s not just the gee-whiz science that makes them attractive.
These tend to be businesses with double-digit sales growth, expanding market share, better-than-expected earnings, high returns on equity, new products and services, heavy institutional support, and strong technical indicators.
They lead the market in both profit growth and price action.
Just as importantly, they are also leading us – as Peter Diamandis would concur – to a healthier, greener, safer, richer world.
These companies tend to be “momentum stocks.”
And if you want to boost your investment returns, make sure to include them in your portfolio.