We’ve talked a lot this year about ways investors can shore up their defense and maintain a cushion against shocks.
You’re either in that zone at this point or you enjoy the rollercoaster ride. A financial cushion against shocks gives you the confidence to turn off the market noise for a few days, weeks or even months.
After all, life is only a random walk when investors who should look to the long term get stuck in the short-term news cycle. We look beyond the news cycle every week on my Millionaire Makers radio show. Now there’s a podcast as well to keep you focused on opportunities to build real wealth while avoiding obvious threats. (Click here for a list of stations and archived episodes.)
That’s how my subscribers keep finding great stocks, year after year. We leave 2020 headlines to the day traders who can’t see beyond tomorrow. Our portfolios are built to make money in the short term, but the real prize is the way they mature in years to come.
Companies with tremendous growth potential dominate GameChangers, where the goal is finding stocks that are obscure today but are expanding so fast that Wall Street won’t be able to ignore them for long. Whether Wall Street has a good day or a bad one, that trajectory doesn’t change.
And while I am happy to cash out after a few months to make sure our money keeps working as hard as possible, many of those stocks have doubled, tripled or, in some cases, climbed 1,000% over time. You just need the discipline to hang on for a few years.
That’s what I’m all about today. We’re going to look at a stock that might take five years to mature, but if you have that much time and that much patience, the ultimate outcome should be worth the ride. Of course, if we get that triple-digit-percentage payout faster, I am not going to complain.
Concentrate on the Long View: Chasing 300% Returns Requires Discipline
The stock I am eyeing is Bluebird Bio Inc. (NASDAQ:BLUE). Maybe you’ve heard me talk about it on the radio. Even though it currently trades around $50, I’ve done the math and believe that, conservatively, its fair value can easily climb above $200 in the foreseeable future.
That’s a 300% return. There are only two questions: how long will that journey take, and how good are the odds that we’ll get to the $200 destination?
BLUE is a leading developer of gene therapy, which effectively rewrites cells to eliminate errors that can create inherited disorders or even feed the aging process itself. Faulty genes get replaced. Malfunctioning ones get turned off.
The most advanced applications target age-old medical targets like blood cancer, sickle cell anemia and genetic brain disorders. Any of them could change life for millions of people.
But science as advanced as this takes time to reach the clinical stage, much less figure out how to treat the patients. Think of the COVID-19 vaccine hunt, only a lot more complicated.
BLUE is unlikely to see a real breakthrough before 2022, and sales might hit $1 billion a year in 2025 if everything goes right in the meantime. That’s a five-year window.
In the intervening time, a lot can go wrong. A lot can go unexpectedly right as well. BLUE could run out of cash or hit a clinical obstacle. Wall Street could fall in love with the company and bid the stock up to $200 overnight.
That’s just how life works. Day by day, the world keeps throwing surprises at all of us. Some are immediately constructive, taking us toward our goals. Others shake our confidence and erase what might have looked like healthy progress.
BLUE’s management has impressed me with long-term dedication. They want to cure these diseases. They’re looking to 2025 and beyond. Meanwhile, they keep doing what they’re doing, day by day.
Ultimately, the odds are good that this will be a $200 stock. If not, that’s how life works. And even if it takes five years to get there, that’s all right.
The S&P 500 earns about 10% a year on its long-term trajectory. Over time, investors have been able to count on roughly that annualized return for about a century now.
In 2025, I suspect the S&P 500 will be around 60% above where it is. Investors will be obsessed with current headlines. Today’s news will be relegated to footnotes.
Would I rather own BLUE for the long haul or trade the S&P 500? There’s a place for both in any healthy portfolio.
Concentrate on the Long View: Your Mindset Matters
Incremental progress is the key to all good things. Take the good surprises with the bad ones, and the overall bias remains positive. On Wall Street, stocks have generally trended upward, through good and bad years. That’s a bedrock statistical fact.
But when the noise gets too loud, it’s easy to lose sight of that foundation that generations of investors built. We become reactive, jumping to adjust our portfolio exposure with every tick in the market. Then, when the pendulum swings, we jump again.
We have an expression for this shell-shocked mentality: risk on / risk off. Good days make bad news feel remote, so investors with no long-term plan buy the hottest stocks they can find. Then, on the bad days, they panic and sell.
That’s the famous “random walk.” Those who react to every headline take that walk to nowhere in particular. It’s a zero-sum journey.
I can assure you that today’s headlines will not be a factor when we get to 2025. People will be talking about companies like BLUE. Stocks that most of my subscribers haven’t even heard of today (unless they have the IPO Edge) will dominate the discussion.
Throughout the process, nervous investors will want a cushion to protect against the shocks. That’s where Value Authority is essential and why I insist on the ability to exploit the market’s short-term mood swings in trading services like 2-Day Trader.
After all, the road to 2025 and beyond leads to a good place. That’s locked in. Stocks like BLUE will take care of that.
The short-term bumps are taken care of, too. That’s your cushion. With the long- and the short-term perspectives locked in, we can afford to have a little fun with Wall Street’s dithering. The random walk is our friend.
Cannabis Corner: Never Mind Aurora
Aurora Cannabis Inc. (NYSE:ACB) lost a big friend this week when billionaire Nelson Peltz resigned from the board of directors after losing interest in the company.
I don’t really blame him. ACB lost a staggering 52% of its market capitalization last month, vaporizing $740 million in shareholder capital.
Other cannabis investors felt sympathetic pain. In all, nearly $3 billion vanished from the stocks I track.
But it isn’t the end of the world at all. ACB has a flawed business model and is shrinking fast from its once-dominant industry role, but there are plenty of better opportunities available.
Aphria Corp. (NASDAQ:APHA) is one of my long-term favorites. With ACB’s decline, it’s now the second-biggest cultivator stock, only behind Canopy Growth Corp. (NYSE:CGC).
Unlike ACB or CGC, APHA never lost sight of the core medicinal sales opportunity in pursuit of wildcat “recreational” markets. We now see the wisdom of that strategy.
And retail remains the hottest end of the cannabis business. My IPO Edge subscribers are already having fun there. There’s more ahead.
Update on Private ‘Off the Record’ Post-Election Summit
Finally, we are really excited to let you know about what is the first actual, in-person get together we’ve had since very early this year, and it is the just-confirmed, just-verified and ready to rock and roll financial event of this post-lockdown year.
Today, we are cordially inviting you to our private, in-person “off the record,” financial summit sponsored by the Investment Club of America. This confidential meeting will take place on Nov. 6-7 (right after the elections) in an undisclosed location in Las Vegas.
Why is this gathering so secretive? Because our First Amendment rights are being abridged by power-hungry politicians, and we need to maintain a low profile in an era of big government.
We live in dangerous times, in which our freedoms and wealth are threatened as never before. The November 2020 election has become the most important election of the 21st century due to the stark differences between the two parties. Trump and the Republicans are struggling to maintain power in the face of a never-ending pandemic. Their policies of tax cuts, deregulation and appointing conservative justices could be overturned soon.
As it stands today, the election betting odds still favor the Democrats. If the Biden/Harris ticket wins and the Democrats take over the House and the Senate, what will this mean for investors, entrepreneurs and the citizens of America? Will the stock market crash and gold soar?
Biden & Co. have promised massive tax increases on wealthy entrepreneurs, elimination of the long-term capital gains ‘break’ on stocks, bonds, gold, silver and real estate (with tax rates exceeding 50%).
They have also promised socialistic programs like Medicare for All, free college tuition, a New Green Deal, a wealth tax, severe limitations on free speech, a new Supreme Court, all on top of out-of-control government spending. The Great Suppression has begun!
That’s why we are holding this Post-Election Summit. It is critical to your pocketbook and your way of life.
And to help make sense of it all, we have brought together some of the world’s top experts to discuss the outcome of the November elections. What will it mean in terms of our citizens’ rights to speak out, to run our businesses, to invest, to travel, to assemble and to be left alone?
Will our freedoms and standard of living be curtailed due to new government policies? Will our wealth come under attack with new taxes, inflation and regulation? Will tech and gold continue to be the favorite stocks after the November elections?
We have brought out the best and the brightest analysts in finance, economics and politics to provide their analysis and answer your questions.
The Post-Election Global Financial Summit is an “in person,” face-to-face event – not a “virtual” conference. Due to legal restrictions, attendance at this in-person event will be limited. We urge you to register now and not be disappointed.
The price for this two-day event is $299. There are no discounts and we expect to sell out quickly. To learn more about the conference, go to https://globalfinancialsummit.co/.
After you register, you will be given the name and location of the Las Vegas hotel, and you then can reserve your room and make your travel arrangements. The hotel is only $99 per night, plus tax. There is no resort fee. Parking is free. We arranged a great deal for you!
Special Note: Please do not discuss this conference on social media. This is a private conference by special invitation only. Thank you.
Our Confirmed Speakers for This event:
Mark Skousen, veteran editor of Forecasts & Strategies and the producer of FreedomFest, will analyze the impact of the November elections on the economy, the dollar, taxes and your wealth. He will give specific recommendations — what to buy, what to sell and what to expect in the next year for stocks, bonds, the dollar, real estate and commodities.
Jo Ann Skousen, associate editor of Forecasts & Strategies and director of the Anthem Film Festival, will discuss her greatest concerns for the future — the protection of the twin pillars of freedom.
John Fund, senior editor of National Review and the nation’s foremost authority on politics and elections, will assess the good, the bad and the ugly coming out of the November elections.
Sean Flynn, economics professor at Scripps College (Clermont) and principal author of the top economics textbook in the country, will assess the “New Normal” after the elections — how to survive and prosper in an age of higher taxes, growing deficits and more regulations. As the author of “The Cure That Works,” he will update us on the future of health care and the pandemic.
Jim Woods, known as the Renaissance Man, the #1 financial blogger in the world according to Tip Ranks, and co-editor of Fast Money Alert with me, will discuss his favorite investment strategies for 2021.
Hilary Kramer, editor of the popular 2-Day Trader, a talk show host and a graduate of the MBA program at the Wharton School of the University of Pennsylvania, will discuss how the November elections will be a “GameChanger” (the title of her most popular book that was #1 on Amazon this year and was also on the Wall Street Journal bestseller list).
Bryan Perry, editor of the prestigious Cash Machine advisory service, will offer his best post-election investment choices in high-tech and high-income.
Adrian Day, founder of Adrian Day Asset Management and the world’s top authority on global investing and mining stocks, will offer specific advice on the outlook for global investing, the dollar, and commodities, with specific recommendations from blue-chip miners to penny stocks that are likely to double or triple in the coming year.
We just confirmed Barbara Kolm, vice president of the central bank of Austria, who will give us an update on Europe.
More speakers will be added soon and Roger Michalski, publisher of Eagle Financial Publications, will moderate.
Time is short, and now is the time to act if you wish to be part of this historic gathering. Attendance is strictly limited, so sign up today at https://globalfinancialsummit.co/.
Which business will transform the aging world and bring investors life-changing profits? Hilary Kramer knows. She reveals the name of this company – “The Final Human Frontier: An Aging World” – and much more in her blockbuster new book, GameChanger Investing: How to Profit from Tomorrow’s Billion-Dollar Trends.
To get a FREE e-copy of the chapter naming “The Final Human Frontier: An Aging World,” simply tell us where to send it in the box below.