Profit From Disruption ... Before It Happens

Four years ago, my college-age son gave me some heart-stopping news. He took half his tuition money and spent it on cryptocurrencies.

All four of my kids are smart, and I’ve done my best to ensure they’re financially savvy. So it was highly out of character for him, instead of investing in his education, to take a flyer on a little-understood technology called blockchain.

It turns out I was the one who had some learning to do.

Those of you who’ve been reading my Friday columns have watched with me as the crypto space exploded higher. And those who’ve been investing in the stocks I recommend in my Disruptors and Dominators newsletter are going along for the profit ride as technology — as it relates to the crypto trading world and far beyond — moves from mystery to mainstream.

You and I both know, however, that these shifts don’t happen overnight. But if you’re looking out far enough, you can see them coming.

And if you make the right bets at the right time, you can make your money back and then some. Plus, in my son’s case, he was able to prove his dad wrong — which might’ve been an even better outcome for him!

The crypto party is still in its early days. But look at the possible gains it provided for some of its earlier arrivals:

Since my son and I had that conversation, cryptocurrencies like Bitcoin (BTC) have been on fire. And the value of his crypto account has increased by roughly seven times over. His digital wallet is fat enough to cover not only tuition, but a nice used car as well.

I sure wish crypto existed when I went to college.

Disruptive Technologies

OK …  I’ve been wrong about crypto and maybe, being kind, a little late. I’m still not a vocal cheerleader. But its rapid impact makes me ponder how technology has changed our lives. Think about some things that didn’t exist 20 years ago:

•  Social media: Facebook Inc. (Nasdaq: FB), YouTube, Twitter Inc. (NYSE: TWTR), TikTok, Instagram, Snapchat, WhatsApp, LinkedIn.

•  Personal technology: iPhones, iPads, Netflix Inc. (Nasdaq: NFLX), FaceTime, Zoom Video Communications Inc. (Nasdaq: ZM), Google Maps, Skype, Xbox.

•  Companies: SpaceX, Tesla Inc. (Nasdaq: TSLA), Airbnb Inc. (Nasdaq: Unrated), Uber Technologies Inc. (NYSE: UBER).

And, of course, cryptocurrencies like Bitcoin and Ethereum (ETH).

I’ve been investing in disruptive technologies most of my adult life, and I’ll continue to do so until the day I die.

I’m able to get my head around Facebook. Human beings are social creatures, and they like being able to “connect” across whatever time or distance there is between them.

CEO Mark Zuckerberg and his minions are monetizing that impulse. Good for them; there’s some “evolutionary innovation” going on, folks. And I don’t mind owning that.

A share of stock in a company of that nature gives you ownership of a living, breathing, operating business. A bond is a loan to a company or government. In both cases, there’s something physical and tangible behind the investment.

This gets to the heart of why I howled at my son. And it’s the No. 1 reason I haven’t invested in cryptocurrencies:

I only invest in things I understand.

And I still can’t explain what’s behind Bitcoin and other cryptocurrencies. I’m not sure it’s evolutionary innovation (it’s just a digital ledger). But I feel pretty good underselling its “revolutionary” aspects. 

There’s no denying prices for many cryptocurrencies have increased substantially, and in the process, cryptos as a whole have become much more popular. I hear people in coffee shops and grocery stores talking about Bitcoin.

I’ve also listened to folks like Warren Buffett, the Oracle of Omaha who said, “I don’t have any cryptocurrency and I never will.” He also described Bitcoin as “probably rat poison squared.”

At the same time, I’m well aware of all the arguments crypto fans cite in favor of crypto ownership.

There’s no question that cryptocurrencies are a very disruptive technology that will impact many areas of our financial system in the future. But what’s equally important are other disruptive technologies tangibly impacting the economy in front of our very eyes.

In my premium service Disruptors and Dominators, I’ve been targeting companies that implement these disruptive techniques in the best ways possible.

I can’t tell you the recent picks in my last issue, but I will say that subscribers are sitting on open gains of 30% and 20%, respectively, on Costco Wholesale (Nasdaq: COST) and Generac Holdings (Nasdaq: GNRC) in under five and three months, respectively. For comparison, the S&P is up only 11% during that same stretch.

I’m targeting companies dominating the new industries of drone delivery, work-from-anywhere, telemedicine and so much more.

I highly recommend you click here for more information. My next monthly issue comes out next week, and I’ll have more new picks, plus there’s still time to buy the other portfolio positions as these are selected to “buy and forget.”

My son says buy crypto; I say buy other disruptive technologies. Perhaps it’s down to a generational thing. I’d love to hear your thoughts on the issue.

Best wishes,

Tony

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