How To Invest In The New Revolutions That Will Change The World

“Honey, I know, I know, I know times are changing
It’s time we all reach out, For something new, that means you tooYou say you want a leader, But you can’t seem to make up your mind
I think you better close it, And let me guide you to the purple rain” — Prince And The Revolution

Quite a rally in the markets this week and the move in the big cap tech stocks this year has been remarkable. Apple is now worth more than than all the small cap stocks in the Russell 2000 Index combined. In fact, the combined market cap of Apple, Amazon, Google and Microsoft is now almost $8 trillion. Long-time Trading With Cody know that I somewhat famously predicted these stocks would have break the trillion dollar market cap barrier many years before they did so.

And as bullish as I have been on on Revolutionary stocks like AAPL, AMZN, GOOG, NVDA and META back years ago when their market caps were a small fraction of what they currently are, I’m not loving these or other names at their current valuations. I’ve explained for the last ten years or so that I think these names are “Forever Positions” in my personal account and that has been the right approach over time. As Peter Lynch used to say, it’s not timing the market that matters but it’s time in the market that matters.

Buying equity in companies that are set to change the world — before they have changed the world — is the key to long-term outperformance. And that’s what I have Bryce and I spending most of our time on these days — finding stocks that have the kind of upside that those names had in them before they went up 1,000% or even 10,000 % in the years after we bought them. 30%, 50% and even 100% moves are nice, but we want to find companies that are positioned to change the world over the next five, ten and twenty years but that are undiscovered by retail investors, and mostly uncovered by Wall Street analysts.

In that vein, how many people are talking about the trillions of dollars that will be made in The Space Revolution over the next twenty years? How many people are talking about how small modular nuclear reactors could be a trillion dollar industry in fifteen years?

When I was buying Apple at a split-adjusted less then 20 cents a share back in 2003, because I thought that they’d eventually have what I used to call a “Mini-MacBook-Pro-For-Your-Pocket” in five years and that being able to watch any movie on your phone anytime you wanted from almost anywhere in the country would be possible in ten years or so. AAPL the stock didn’t go straight up after I bought it either. It took a few months for it to make any sustainable move higher and even then it ebbed and crashed a few times in 2004 and 2005 and 2006 and 2007. In 2008, I could see in my mind clearly that after the iPhone came out that Apple would eventually generate hundreds of billions of dollars in revenue from hardware sales and very high margin software/services sales in five or ten years. But for the first five, ten years that we owned Apple, we had to ride the ups and downs and overcome the doubters and haters to get to this current $2.7 trillion market cap.

Every time I talked about how Nvidia would eventually be a key to The AI Revolution in 2016 and 2017, people think I was nuts.

When I published my book called 30 Stocks For The Cloud Revolution few people even knew what the cloud was.

When I started buying bitcoin and publishing articles about The Cryptocurrency Revolution, some of my followers canceled their subscriptions because they thought I was wasting their time.

When we I first bought Tesla and pitched the idea at a Value Conference full of very smart money managers in Vail, they literally laughed at the idea.

Now everybody on CNBC can tell you how the ecosystem that Apple built upon the iPhone platform is uniquely valuable. They can tell you how ChatGPT and Google Bard AI system wouldn’t be able to run without Nvidia’s chips powering the AI. Cloud Stocks are all the rage right now and there are dozens of Cloud Stock ETFs tracking the industry. Wall Street has embraced bitcoin and cryptocurrency is widely understood by retail investors now.

But those people buying these stocks and cryptos today and those pundits who have recently become experts on the importance and technical aspects of these ideas, concepts and platforms have missed the first 87,000%, 4,000%, 5,000%, 20,000% and 1,000% moves respectively in AAPL, NVDA, GOOG, bitcoin and Tesla that long-time followers of mine actually did catch in these names.

I’m not saying we should sell these stocks but I’m not terribly interested in putting new money into these names at these levels when they are so mainstream and broadly owned.

So what are the industries, and companies in the industries that will become the trillion dollar platforms, concepts, and ideas in seven or ten or fifteen years from now?

The AI Revolution, certainly. But it’s crowded right now and most of the companies hyping their AI concepts are going to fail to catch traction. I’d stay away from stocks like C3.AI (symbol is AI) and Sprout Social, SoundHound AI and Spriklr. Google, Microsoft, Tesla, Meta, Apple and Nvidia are the best plays on The AI Revolution but much of the AI upside is already baked into their current valuations after the huge moves they’ve made this year.

The Alternative Energy Revolution. My favorite undiscovered name in this sector is NuScale (SMR) which makes small modular reactors that I expect many electric utility companies will be using in ten to fifteen years. Solar Edge (SEDG), which I’ve owned and written about since the stock was at $13 a share seven years ago is my favorite solar. I don’t like wind energy because of all the movements and equipment that can break compared to solar and nuclear.

The Fab Revolution. Intel and TSM are the best plays for this. Intel’s reinventing itself somewhat in like Apple did when it because an iPod/iPhone company in addition to being a PC company back in 2002 and 2003. You have to picture Intel as an almost completely different company in ten years when they will likely be the leading semiconductor factory company in the western world. I’ve owned TSM since 2016 and plan to hold onto it even with the looming threat that China could invade Taiwan in the next few years.

The Space Revolution. RocketLab is my favorite publicly-traded space stock although I have much more money invested in the 800-pound space gorilla, SpaceX in the private markets. I also have some small exposure to a basket of other space stocks including, Planet PL, Redwire RDW and Blacksky BKSY.

It won’t be easy to buy and hold onto these names through the ups and downs, the crashes and bubbles over the next seven to twenty years in the same way that it wasn’t easy to hold onto our biggest winners over the last seven to twenty years. But by the time these Revolutions are mainstream, the best stocks in these New Revolutions will be up 1000% or more. Bryce and I will continue to do our homework to find other names in these New Revolutions and to find other burgeoning trillion dollar Revolutions to get in front of in coming months and years too.