Happy Monday!
I set the tone for my week by jumping out of bed right when my alarm goes off every Monday.
No hitting the snooze button. Get up early, win the day… win the week… win life.
I use this beaten-up old Fitbit as an alarm:
Now, let’s get to it…
First, some perspective.
What’s happening in Israel is horrific. We’re lucky we can discuss what it means for our money rather than for our lives or our kids.
We looked at how stocks performed around 50 major conflicts since the 1950s.
US stocks typically dip at the outbreak of a war… then recover quickly. One year after the onset of the war, they gain 11%, on average.
The S&P 500 didn’t even drop this time around, which tells me stocks want to move higher.
As investors, we shouldn’t fear war. Stick to our game plan: Buy great businesses profiting from disruption.
I’m about to show you one of the most important charts in investing today…
One that will lead to lots of new moneymaking opportunities for us.
Spending on new American factories is on track to hit $200 billion this year. How’s that for “hockey stick” growth?
If you don’t think it’s a big deal, you’re not paying attention.
The past 40 years have been a slow death of American manufacturing. Jobs moved overseas while the Rust Belt rotted away.
Well, grab a tissue and wipe away those tears. Because Made in the USA is being reborn before our eyes.
Most of that $200 billion is being spent building computer chip plants and electric vehicle (EV) factories.
Honda Motor Co. (HMC) and LG (KRX) just broke ground on a new EV battery facility in Ohio. The $4.4 billion plant is the size of 60 football fields and is slated to start production in two years.
It’s no Las Vegas Sphere. But that star-spangled banner with the backdrop of those giant steel girders looks damn good.
The future is being built, in America.
Are you excited? Because I sure am!
Profiting from the rebirth of “Made in the USA” is a core megatrend in our Disruption Investor advisory. I’m glad to see it finally getting some media attention.
In 2011, legendary venture capitalist Marc Andreessen predicted the future.
He wrote, “Software is eating the world. We are in the middle of a dramatic technological shift in which software companies are poised to take over large swaths of the economy.”
Andreessen was right on the money.
Software stocks destroyed pretty much every other group of stocks. The BVP Nasdaq Emerging Cloud Index 8X’d the S&P 500’s performance over the past decade:
Now it’s AI’s turn to eat the world.
Just as Netflix used software to disrupt the cable cartel… and Uber used it to crack open the taxi monopoly… AI will transform many of the world’s most important industries.
Take farming, the ultimate old-world industry. We’ll soon be eating AI-harvested fruits and vegetables.
John Deere (DE) is the LAST company you think about when you hear “AI.” But it recently shipped its first fleet of fully self-driving tractors.
Soon, the most successful Midwestern farmers will have a fleet of flying robots working for them.
A start-up called Precision AI just debuted its weed-killing AI drones. The crop-spraying flying robots slash chemical use by up to 90%!
AI weed-killing drones and self-driving tractors… the future is going to rock.
As usual, Nvidia (NVDA) is a clear-cut winner. Its chips power all the world’s best AI systems.
We’re also keeping an eye on the most promising AI companies that could soon go public. More on this soon.
“FAANG is old news. The big bucks will be made investing in up-and-coming disruptors.”
That’s what I told you the other week. And today, I have more numbers to share with you.
Facebook… Apple… Amazon… Netflix... and Google were “must-own” stocks for the past decade.
These companies have been so good to investors for so long that you’re almost a weirdo if you don’t own them.
But guess what? The largest, most-dominant companies almost never stay on top.
Look at this great chart below.
It shows the returns of stocks before and after they become one of the 10 largest companies in America.
The best time to own stocks is usually BEFORE they join the top 10. Returns slump dramatically once they reach the top:
FAANG stocks have somewhat bucked this trend so far. But I think their reign is over.
If you’re sitting on big gains in these stocks, great job.
It’s time to reinvest those profits in the “up and comers”... the companies that will knock the FAANGs off their perch.
These new winners will emerge from fast-growing megatrends like AI, chips, and EVs.
Stephen McBride
Chief Analyst, RiskHedge