My windshield was smashed. Everything of value in my car was gone. They had rifled through every single thing in my car, leaving a mess.
That’s what happened to me the first time I took my car to New York City.
This was in 1989. My entire summer job’s earnings were in this car that I had paid $800 for.
It was a nine-year-old, unpleasantly yellow two-door Toyota Tercel. Still, it worked, and best of all, I had a car for the first time since I’d come to the United States.
So, of course, one of the first things I did when I got back to college … was drive it to New York City.
Back then, New York City was crime-ridden. Bryant Park, which is now a fancy place, had so much drug activity that you’d see needles scattered through the park.
So, why am bringing this up to you today? You see, the stock market is a bit like New York City in the 1980s. There is incredible risk if you’re buying the wrong stocks, and you’ll end up losing more than you bargained for…
Learning the Hard Way
People had warned me: Don’t take your car to New York City. Just take the bus.
Or if you take your car, park it in a paid parking lot. They told me my car would be safe because someone was watching the lot.
Of course, I didn’t follow any of this advice. I was a poor college student, and the idea that I was going to stand around waiting for a bus, then pay $12 for round-trip tickets seemed silly when I had a car.
Paying $15 for parking also sounded ludicrous, especially when parking on the streets of New York City was free.
You can say I learned my lesson the hard way.
To repair my windshield cost $100. The value of the things in my car was another $40. Then, to add insult to injury, I was ticketed because I stayed over the time limit for the spot I parked in. That was another $50.
Following the guidance of people who had experience would have saved me valuable money.
Right now, if you make the wrong moves in the market, I believe you’re going to find yourself in a similar position. Not, however, if you look to mega trends.
The Lens of Mega Trends
You see, many people think that the market is too expensive. They use backward-looking statistical measures like cyclically adjusted price to earnings, or CAPE, to justify their view.
However, the problem with CAPE is that it’s incredibly backward-looking. It looks backward, when stock markets look forward.
And when you look forward using the lens of mega trends like the Internet of Things (IoT), CAPE looks wrong. Completely wrong. The reason for this is productivity growth.
Most economists think this is a fluke. However, the stock market is a better forecaster than any economist. The S&P 500 is up 3.2% since this was announced.
I believe this is the beginning of a huge rise in productivity growth that’s going to go on for years, thanks to these mega trends.
More Money in Your Pocket
The causes of productivity growth are hard to see in the data today. However, I believe it’s the early dividend due to the rising use of IoT technology like Big Data, artificial intelligence and robotics. These technologies are being used in more countries and in a rising number of industries.
This is why I am optimistic about where the prices of stocks can go in the U.S. and many parts of the world. In fact, the No. 1 stock for subscribers of my Profits Unlimited service is up over 200%, and it’s an international sensor/chip company that’s involved in every facet of the IoT.
As productivity rises, we’re going to see this stock and others continue to rise.
The bottom line is, doing the right thing now means more money in your pocket later. And based on what I’m seeing today, I believe that the right thing to do is own stocks in general, and then to focus on those that are exposed to rising growth and productivity.
Editor, Profits Unlimited
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