"Selling shovels in a gold rush" is one of the oldest and most profitable investing strategies there is.
So, why is it that so few investors pay attention?
The allure of "easy money."
Most would rather risk everything they own in search of the next "best" thing when the next "sure" investment is always far more profitable.
I'd like to share a new recommendation with a $50 billion company that most investors have never heard of to get your 2018 started with a bang… and lots of profit potential, too!
But first, let me give you an example to drive my point home.
It's a story with roots beyond living memory, yet it remains critically important to your money today.
Lured by the prospect of easy money, hundreds of thousands of people sold everything they had in 1849, threw their goods in covered wagons or shipping trunks, and headed to California's gold fields. Most died penniless in the hills. Those who didn't moved on… never to recover the wealth they'd given up to make the journey.
A precious few, though, made out like kings and became fabulously wealthy because they understood that selling "must-have" goods and services that their customers could not live without was the surer path to profits – just as we do today.
Levi Strauss, for example, made durable pants for miners who needed tough clothing. Today, Levi Strauss & Co. is a multibillion-dollar company.
Merchant Sam Brannan sold shovels and supplies to miners en-route from San Francisco to California's gold fields. He reportedly made $150,000 a month at just one of his stores… roughly $4 million in today's money.
Faxon Dean Atherton and Thomas Larkin financed ships inbound with critical supplies. The two men served as bankers, middlemen, and merchants by purchasing entire ship cargos upon arrival in San Francisco and reselling it all at hugely inflated profits to fortune hunters hoping to strike it rich. They reportedly doubled their capital every few months.
A biographer would later write that Atherton and Larkin, in particular, became two of the state's richest men because they understood that it was far more profitable to follow a strategy "built on essential elements" than it was to sell.
Back then, that meant "foodstuffs, dependable commodities, and investment in land," according to his diary, which was later published by the California Historical Society in 1964. Today, there's another "gold rush" at hand.
McKinsey research suggests that big tech companies invested $20 billion into artificial intelligence last year alone, and that worldwide AI-related revenue will top $46 billion less than two years from now. Robotics spending, a closely related industry, will top $188 billion over the same timeframe, according to IDC. That's a combined total of $234 billion in just the next 24 months.
What gets my attention, though, is a far more impressive number: revenue from artificial intelligence – of which robotics is a closely related critical part – is expected to grow by 50% a year. That's a double every two years and enough to turn every $10,000 invested into a staggering $576,650 in only a decade.
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.