Investor Insights:
- In 2017, blind optimism reigned on Wall Street.
- Today, investors want something other than promises in the stocks they buy.
- It’s why huge companies such as Apple have seen their share prices rise to new all-time highs.
If there’s anything we can learn from the WeWork debacle — the IPO-less, profitless poster child of Wall Street’s now-dead “unicorn era” — it’s this…
The stock market has seasons.
Different seasons require different strategies.
For example, in 2017, blind optimism reigned on Wall Street. The Nasdaq Composite Index rose more than 30% that year. The S&P 500 Index rose 20%.
I believe a WeWork IPO in that time frame would have gone off without a hitch.
Back then, investors wanted “stories,” not profits.
Think of Redfin and Snap, companies that went public. Both claimed to be revolutionizing their industries in real estate and social media. Whether they made money or not was secondary.
But seasons change. The sooner you recognize that fact, the better you will do as an investor.
More Than Just Promises
These days, in an economy facing uncertainty over trade and other challenges, investors want something other than promises in the stocks they buy. They want streams of income and assured profits.
If the company is too young to have profits, investors at least want proof in the form of cash flow that the company is on the right track.
So, if you can find a company with all that — rising profitability, a great story and real value — in the same package, it’s tough to beat.
I recommended one such biotech firm to my subscribers at Total Wealth Insider back in June. I called it the tech stock revolutionizing the health care industry.
It’s also the reason why huge companies such as Apple or Microsoft have seen their share prices rise to new all-time highs in recent months.
Your Task as an Investor Today
Neither is setting the world on fire with revenue growth. In fact, Apple finished its 2019 fiscal year by earning a few pennies less than the year before.
But both companies have assured streams of income that few companies can hope for.
That’s your task as an investor today.
If your goal is to see huge gains in a stock’s price, you need to look for the undiscovered Apples and Microsofts that have assured streams of growth and profits.
Investors will gladly pay a premium to own these companies tomorrow.
Best of good buys,
Editor, Total Wealth Insider
P.S. I found a $5 biotech stock that’s a prime takeover target. It could see its price double, or even triple, overnight if it’s acquired. That’s why I put together a new presentation that details why this stock is my No. 1 recommendation right now. Click here to watch it.
