I want to take some time to introduce myself to those of you who may not know me, as well as talk a little about what's in store for my upcoming sit-down interview with Jared Levy at the Extreme Tech Profits summit on Wednesday.
I began trading and investing in stocks in 1996. I was a young professor back then, teaching philosophy at a liberal arts college in Ohio. Because I needed to supplement my salary to support a growing family, I took some money earned teaching summer school and opened my first brokerage account. After several years of mediocre results, I buckled down and took steps to improve my investing performance.
As part of that process, I put myself under the tutelage of some of the best investors and traders in the business. I studied under Martin Zweig, famed hedge fund manager... William O'Neil, founder of Investor's Business Daily... and from Dr. Len Zacks, the MIT PhD who founded Zacks Investment Research.
Once I combined three key tenets I learned from each of these masters into a stock-selection system and added a few rules from technical analysis for timing my entries and exits, I started to see real success.
This success led me, in 2002, to launch my first stock market advisory service. In 2014, I stepped down from university teaching to work full time at helping people profit from the markets. Today, I serve over 15,000 clients as market advisor, trading coach, and money manager.
I won't go into a lot of the details of my stock selection methodology today (for the sake of time), but those of you interested can find out more in the second edition of my bestselling book, Trend Trading for a Living (McGraw-Hill), due out in December this year.
The first edition of the book, much to my surprise (and much to the surprise of a publisher who turned it down!) sold over 50,000 copies and was translated into several languages. The book distills my many years of study into ten proprietary trading systems that help you find the market's next big winners -- strategies that I'll be sharing with you in the Extreme Tech Profits summit.
I've Been Finding Big Gains In Tech For Years
Take, for instance, my discovery of the company NVIDIA (Nasdaq: NVDA) back in 2015.
Prior to that time, NVIDIA was known as the premier maker of superfast video cards, but that was about it. That changed when NVIDIA launched a line of "deep learning" (artificial intelligence) products, including NVIDIA Shield and NVIDIA Drive, with applications in the smart home and self-driving car markets, respectively. This new product innovation created an acceleration in growth, along with exuberant analyst support, that has persisted to this day.
I first advised my clients to buy shares of NVDA at a price of $22 per share. Those shares are up more than 1,000% less than three years later.
Another stock that has been on my radar a long time is Tesla (Nasdaq: TSLA), the electric car manufacturer founded by Elon Musk.
On the surface, Tesla is a car maker. But behind the scenes, there is much more going on. After Tesla's buyout of SolarCity Corp., the nation's largest solar panel installer, Musk has quietly been moving his car company into the "smart home" market with his solar shingles, Powerwall, and AI-driven home energy grid. Musk is also pushing Tesla to lead the way in developing self-driving cars, and keeping those cars safe through cybersecurity technology.
Tesla first came to my attention back in early May 2013, after issuing blow-out earnings. At that time, shares of TSLA were trading around $50. Within a month, my shares doubled. They would double again, and then again, over the next four months. In recent trading, I saw my original position come close to a 700% gain.
This brings me to the purpose of the Extreme Tech Profits live summit.
We're On The Verge Of Another Tech Revolution
I invest in and trade every sector of the market, from oil and gas to retail, from financials to industrials, and everything in between. But by far the most exciting sector -- certainly the fastest-growing sector -- and arguably the most lucrative sector going forward, is technology.
In 2017, the technology sector offered the highest returns of all ranked market sectors, with a whopping return on investment (ROI) of 34.3% versus 21.8% for the S&P 500. If we compare all sectors over the past 10 years, we see that technology has been the leader in six of those years, and it holds the highest average annual sector return (13.1%) for the period, putting investors over 500 basis points -- each and every year -- ahead of the S&P 500.
But in truth, the real story for tech has yet to be written.
My research reveals that the only sector showing increasing yields in growth over the past three years is the tech sector. And this acceleration is itself accelerating, while we are seeing deceleration in growth in key economy sectors such as manufacturing, retail, and financials.
If we project these numbers forward, it is not a stretch to imagine that in years to come, the only sector worth investing in will be technology.
I'm sitting down with Jared Levy on Wednesday, August 15th in order to help investors like you navigate and leverage this trend. I will be focusing on four key segments of the tech economy: artificial intelligence, cloud computing, the internet of things, and cybersecurity. These are the four subsectors in tech that show the highest degree of innovative and disruptive potential. Each is poised to become a huge part of our economy over the next decade.
These Trends Are Fueling Each Other
Consider robotics, for example. It has been said that there will soon be only two jobs available: making robots and fixing robots (of course, we will also need people to sell robots!). That's an exaggeration, of course. But consider this: According to McKinsey Global Institute, Automation could destroy as many as 73 million jobs in the United States by 2030.
Now, a robot is a piece of hardware that is run on artificial intelligence (AI), and that AI is stored in the cloud, and the cloud-based AI is connected to the robot using internet of things (IoT) technology, and that connectivity is protected from hackers by cybersecurity software, which itself is embedded in the cloud, harnesses AI, and communicates with the robot via IoT.
Do you see where I'm going with this? The world is becoming more and more technologically connected, and these four subsectors -- AI, cloud, IoT, and cybersecurity -- are at the heart of that revolution. Companies that have established themselves as the suppliers of that revolution -- the picks and shovels salesmen of this new gold rush, if you will -- will be the best places for your investment dollars for the foreseeable future.
Those are the companies I'm going to be talking about in the Extreme Tech Profits live summit.
I'm Looking For The Next Big Winners
My focus in the summit will be on finding those smaller companies that are on their way to becoming the next NVIDIA or Tesla.
I've tooled my market scans to find small to midcap-sized firms that specialize in only one or two of these segments, whose proven product lines are poised to grow exponentially, and which are on the verge of attracting the attention of deep-pocketed fund managers. This is where the best bang for the buck is to be found.
Take, for example, my top pick in the artificial intelligence space. This is a huge market with several huge players that dominate the space. But this little David among the Goliaths has carved out for itself a unique niche: data preparation, connection, and retrieval. My top pick was able to grow earnings per share 42% this year and over 60% quarter on quarter. Insiders are buying shares, analysts are raising their price targets, and the stock just keeps heading higher.
In the cloud computing space, my top pick is helping companies streamline their customer service platforms and, in turn, increase brand loyalty. This company's disruptive approach is now starting to land some very big deals with brands like AirBnB, Uber, Fossil, Squarespace, and Dollar Shave Club. This success has helped the company grow sales 62% per year over the past five years, with super-accelerated growth this year. And things are just getting started.
My top pick in the Internet of Things space also has its sights set on the cybersecurity arena. Of course, the two go hand in hand. As luck (or sheer genius) would have it, one of this company's primary products -- its big-data platform, which enables users to analyze data generated by various IoT endpoints -- can also be used to detect malicious activity in that data. This IoT-security play has also been shopping lately. It's bought out five small companies in the past 18 months, three of which strengthen their big data analytics platform, but two of which are in the cybersecurity space. Earnings grew 30% this year and are slated to grow nearly 45% in the coming year. That's a nice rate of acceleration.
Finally, my top pick in cybersecurity is one I've known about for a while now. I first began putting clients into shares when they were trading around $42. They recently peaked at $70. But this is only the beginning. This profitable enterprise with no debt, huge margins, and lots of love from the analysts (who have raised estimates three times in the past two months), has been quietly but steadily beating estimates in each of the past 14 quarters. But the real story is just beginning to emerge. With our own midterm elections coming up, and with elections around the world worried about hacking and fraud, all eyes will be on this company.
Join Me On August 15
I'd like to personally invite you to join me at the Extreme Tech Profits summit on August 15. I plan on discussing these opportunities -- and a lot more -- live at 1 pm (ET) on Wednesday.
I'll also reveal my Five-Point Tech Profit System for the first time ever to anyone outside of my own personal clients.
Again, this won't be shown to the public -- and seats are limited -- so I urge you to sign up now by clicking at the link below.
See you there,
Dr. Thomas Carr