Anxious investors frequently ask me "how can you get beyond FANG stocks?" and my response is always the same...
...why on earth would you want to??!!
FANG stocks are the single most powerful and profitable investing opportunities ever created.
You know their names ..."F"acebook Inc. (Nasdaq: FB), "A"mazon.com Inc. (Nasdaq: AMZN), "N"etflix Inc. (Nasdaq: NFLX), and "G"oogle - now known as Alphabet Inc. (Nasdaq: GOOGL).
Just $10,000 invested in each when they went public is now worth a staggering...
...$59,953 – Facebook
...$245,193 – Google (now Alphabet)
...$359,978 – Amazon
...$3,388,290 – Netflix
You're missing out if you're not on board.
So, do yourself a favor.
GET on board.
Contrary to what a lot of people believe about 'em being "expensive," the reality is that they're dirt cheap.
I know that's hard to comprehend.
A little perspective might help.
In 1980, Berkshire Hathaway Inc.'s (NYSE: BRK.A) stock stood at $300 a share, and people thought that was impossibly high. By 1990, a single share would set you back $9,000. That was $50,000 a share by 2000. Today, Berkshire trades at a jaw-dropping $317,850.00 per share.
Forget about the individual companies for a moment.
What matters here is that every single one of the FANG stocks is changing the world we live in. That means they are being driven by trillions of dollars in spending that will happen no matter who is in the White House, which countries want to fight over trade, or even the Fed's next move.
They are the very embodiment of an Unstoppable Trend and, as such, forward-looking growth machines best viewed in light of what they will accomplish, not where they've been in the rearview mirror.
Latching on to them will help you grow your money faster, with more certainty, and with bigger profits than you've ever dreamed.
There's an art and even a science to this...
Rare gain could have turned a $10,000 investment into $1.4 million – discover the ONLY type of stock that could also deliver incredible profits today...
The litmus test of whether or not any company – but especially a FANG – is worth your hard-earned investment dollars is whether or not it provides "must-have" products and services the world cannot live without, or simply "nice to haves." The former can generate truly life-changing wealth, while the latter is a risk you don't want to touch with a 10-foot pole.
This really is the secret sauce.
Most investors overlook these two elements and, predictably, fail to achieve the big profits they deserve because they lurch from hot tip to hot tip. Sadly, they usually lose money with each "jump."
Wall Street, of course, loves this because they make billions in fees by keeping you hopping. Don't ever think otherwise. The more confused and uncertain YOU are, the more money THEY make.
Warren Buffett knows this, which is a good part of why he's never split Berkshire's stock. Buffett wants his investors along as partners over the long term. And that subtle shift in thinking is what creates value for long-term investors.
At every short-term market swing!
Case in point, Alphabet, Google's parent company.
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The company was trading at $1,185 on July 23 when I appeared on "Varney & Co." just before their Q2 earnings call after the bell that day. I made the case that the stock was a "Buy" ahead of earnings. Host Stuart Varney was incredulous – but ribbed me, goodnaturedly, when I made my case.
Google would jump 5% to 10% within the next two weeks, I said. Less than 48 hours later, shares were up 6.3% and climbing.
Honestly, I'm not any smarter than the next person, but I do my homework.
I understand the longer-term partner mentality as it relates to true wealth creation, not merely a short-term trading opportunity. That's critically important because the former is truly where you want to be if you're after huge, life-changing "total wealth."
That's the difference.
I knew Alphabet's numbers were going to be strong because of where the company's headed and what the products it brings to market mean for our future. The world's future.
Management didn't disappoint.
Alphabet reported $3.2 billion in net income for Q2, or $4.54 per share. That's a decline from a year ago when the number stood at $5.01 per share and reflects the impact of a massive E.U. antitrust fine of $5 billion.
Take that out of the equation, however, and the number jumps to a staggering $11.75 per share – which positively scorched analyst estimates of $9.64. When I told Stuart that I "did my homework," this is the kind of thinking I was alluding to.
I also believed that the component growth would be good, especially over the longer term. That's a term meaning the individual revenue unit composition of figures Wall Street views in aggregate. And that's why I continue to believe prices will go far higher over time.
My attention is drawn to cloud computing, artificial intelligence (AI), and what the company calls "Other Bets" because these are the things driving our future.
Not coincidentally, these are all developments that will double, triple, or even quadruple your profits over time. And the fact that most investors can't see this coming works in your favor.
Why?
You Have to See It to Believe It: While everyone was sleeping, a former Wall Street insider executed night trades – banking 217% total gains in less than a week. Now, he’s sharing his strategy for the first time ever…
They still think of Google/Alphabet as a "search engine," when there are entirely new businesses developing within that that aren't yet being fully recognized in the company's share price.
In other words, they're trapped in a bias based on the past, when the far more profitable vision is always forward-looking. Every "expensive" stock was "cheap" once.
That's your opening.
For example, Google's non-advertising-related businesses include cloud computing, Google Home, the Pixel smartphone, and mobile app revenue from Google Play. Those segments hit $4.43 billion in Q2, up from $3.09 billion a year ago.
The company's speculative "Other Bets" – that's seriously what they call it – reported an operating loss of $732 million... which sounds bad until you realize that's largely the cost of investing in future products and services. Flip that around and what you're really seeing is the emergence of nearly $1 billion in new concepts that haven't yet begun to be properly valued.
Then there's AI. I said more than a year ago, when the company was trading at "only" $800 per share, that it would start to move the needle this year and during Q2 2018 specifically. Fortunately, that's yet another observation that's proven right on target.
Paid clicks are up 58% year over year as Google's homegrown AI continues to refine user-specific behavior and serve up even more relevant content which, in turn, increases paid clicks. Interestingly, AI was mentioned 38 times during the most recent earnings call, which tells me the "Buzzword Bingo" count is alive and well. The previous record was 26 mentions.
So, now what?
The concern that Google/Alphabet is still an expensive stock is very valid.
But, stop and think about this for a second.
Imagine how inexpensive Google's going to look...
... a year from now.
... three years from now.
... or five to ten years from now.
I do not want to see you in the unenviable position of having to chase one of the world's strongest, best-run, and well-capitalized companies. Especially when we have talked so many times about what a great investment the company is and how much life-changing wealth it has yet to create.
Every $10,000 invested in August 2004, when Google went public, is now worth a jaw-dropping $249,032.
Every $10,000 invested today may be worth $31,758 just five years from now, if the percentages hold. Or, $1,007,210 another 20 years from now. And, that's all just assuming that the average growth per year stays the same as they have been since the IPO at roughly 26% a year.
I'm not aware of a single investor who can throw away that kind of money.
Three Ways to Get On Board Right Now
First, you can buy Alphabet shares individually or all at once.
Tuck 'em away in the Global Growth and Income segment of your portfolio. That's the "40" in the proprietary 50-40-10 Model I created for our sister publication, the Money Map Report. Even just a single share – if that's all you can afford today – will make a huge difference years from now.
Second, you can buy LEAPS call options that allow you to control a much larger block of shares as they grow for comparatively far less money.
One strike "in the money" is where I'd start, and right now that means a look at the GOOGL Jan. 17, 2020 $1,240 Call (GOOGL200117C01240000) at $172.60 per contract as I write. That's an 86.25% savings versus the $1,255 per share, as I write, that you'll have to pay if you're buying the stock itself. Options, of course, come with their own unique risks, so you'll want to understand those before you buy. Each contract = a "lot."
Or third, you can buy a fund like the Fidelity Contrafund (Nasdaq: FCNTX) which I recommend as one of 10 "26(f)" investments for readers in the Money Map Report. Just click here for more information.
Alphabet's a "top 10" holding, which means you're going to tap into the best that it has to offer while also getting a number of other terrific tech companies as part of the bargain, including Amazon, Microsoft Corp. (Nasdaq: MSFT), Netflix, and Visa Inc. (NYSE: V) to name a few.
In closing, I hope I've made my point.
Now, more than ever, you want to stick with winners for the simple reason that every great company producing great profits is also producing new highs.
That's NOT a coincidence.
Even at $1,256.27 a share.
The FANG stocks - and Alphabet in particular - are a great way to build long-term wealth. But Keith has been researching even more aggressive income potential, too. He’s found a special class of investments he calls “26(f) programs,” which give investors the opportunity to tap into huge monthly income – $2,000… $5,000… or more – every month for the rest of their lives. Click here to learn how it works…
The post Q - How Do You Get Beyond FANG? appeared first on Total Wealth.
About the Author
Keith is a seasoned market analyst and professional trader with more than 37 years of global experience. He is one of very few experts to correctly see both the dot.bomb crisis and the ongoing financial crisis coming ahead of time - and one of even fewer to help millions of investors around the world successfully navigate them both. Forbes hailed him as a "Market Visionary." He is a regular on FOX Business News and Yahoo! Finance, and his observations have been featured in Bloomberg, The Wall Street Journal, WIRED, and MarketWatch. Keith previously led The Money Map Report, Money Map's flagship newsletter, as Chief Investment Strategist, from 20007 to 2020. Keith holds a BS in management and finance from Skidmore College and an MS in international finance (with a focus on Japanese business science) from Chaminade University. He regularly travels the world in search of investment opportunities others don't yet see or understand.