Beyond Bitcoin — The Big Investment Opportunities To Come in Australia

Think you’ve missed the decade long share market boom?

Sat out the unbelievable cryptocurrency boom?

In my opinion, you’ve not seen anything yet.

And it’s not too late to get a stake in the biggest opportunity in decades.

Over the next week I’m going lay out something extraordinary that’s happening.

It’s been bubbling away in 2017. But I think it will explode massively in 2018.

Most people aren’t even aware of it yet. I’ve been speaking to my contacts in the investing industry and it’s clear it’s not even on their radars.

But I’ve been looking into this for months. Carefully joining the dots. And over the next week I’ll share my findings.

It’s the secret boom within the boom.

Let’s take a closer look at what’s happening beneath the surface…

Since Trump’s election back in 8 November 2016, the US stock market has been on a tear.

The two most popular indices — the Dow Jones Industrial Index and the S&P 500 — are up 18.9% and 23.85% respectively.

Record highs all round, thank you very much.

But behind the indices is a bigger story.

You see, investor money doesn’t go into every sector and every stock on an even basis. And the index return doesn’t tell the real story of what’s happening behind the scenes.

Whole sectors in an index can remain virtually ignored by big money for years at a time.

Like Australian mining for the past decade

Instead this is what really happens…

So-called ‘hot’ money chases the best prospects, crowding into specific sectors and stocks. And this avalanche of money is what creates the biggest gains.

It’s a simple case of supply and demand.

The zeitgeist of the market — the defining spirit at a particular time — is a very real phenomenon. It moves money through the market with an invisible attraction.

Understanding this is how you could make life-changing gains.

Let me show you some examples.

Take a look at the sectors that have done best since Donald Trump came to power:

Major sector ETFs since President Trump’s election

Major sector ETFs since President Trump’s election 16-10-17
Source: FactSet
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The defence sector is the big winner here.

With the North Korean situation and Trump’s provocative style of international relations, the Aerospace and Defence fund Exchange Traded Fund is up almost 40% in just under one year.

Was this predictable? Or is this a total surprise?

I’d argue that, with a bit of research, it was a good bet at the very least.

And it’s a lesson in why big moments makes money. If you recognise them and invest accordingly.

Truly big moments are relatively rare events.

Like an election in a powerful country. Or a game-changing invention.

But if you see them early enough, you can invest well ahead of the herd, and make huge profits when the avalanche of money comes pouring in.

For example, if you had joined the dots — and invested in the defence sector — back in November 2016, you’d have made double the returns over average of the top 500 companies.

It’s clear that pivotal moments create massive investment opportunities.

And it’s something you should always looks for.

Because if, like me, you want to find stocks set to explode in value, it’s the key to success.

But here’s the real point I want to make… 

Explosive gains here

You could have made even bigger gains if you’d invested where the big money is afraid to go.

The Russell 2000 is a small-cap index of the bottom 2,000 stocks in the Russell 3,000 index.

So, if the S&P 500 is a proxy for how big businesses stocks are going, the Russell 2,000 is the same for small-caps.

The average index return was 26.4%.

That’s a better return on ‘risky’ small-caps than ‘safe’ blue chips.

And if you really want to get ‘jump out of your seat’ excited, take a look a bit deeper. Some of the individual stocks made truly mouth-watering gains.

These opportunities had nothing to do with Trump and everything to do with a growing trend that’s slowly bubbling under the surface.

Look at some of these YTD-gains (in just 10 months):

YTD-gains (in just 10 months) 16-10-17
Source: CNN/Russell 2000
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Actually, five of the top 15 performing stocks in the first half of 2017 were chip makers.

The surge in cryptocurrency ‘mining’ — the process by which the blockchain is kept accurate — meant a surge in demand for special microchips.

This ‘surprise’ demand created a host of unhappy game console operators, who now had supply shortages to contend with.

At the same time, the world’s growing obsession with internet-enabled devices has bolstered earnings for semiconductor manufacturers.

The chip makers cleaned up. As did their shareholders.

You won’t read about it on the front pages of the Australian Financial Review, but big money is being made right now in small spaces.

Check out this chart for an example of the exponential gains you can make if you get into the right spaces at the right time.

NVIDEOS Cumulative Return 16-10-17

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Big investment opportunities in small spaces

Imagine getting in on stocks like these.

It’s how to create life-changing wealth.

And a lot better than the Aussie market’s meagre returns. Which, as I mentioned on Friday, is languishing behind the world.

But there are big opportunities at home in the Australian market as well.

If you know where to look…

It would only take four or five years to grow a substantial fortune from a relatively small grubstake. If you could sustain such results of course.

And that’s a lot easier said than done.

But if you knew what was going to drive the next five years, then it would be possible to create a fantastic portfolio of high growth stocks.

When I say drive, I mean the single biggest thing that makes the economy grow in a certain way. In the early 20th century this was oil. In the second half it was electronics.

And in the last two decades it has been the internet.

Or in Australia, the China led mining boom.

These drivers flow through the economy in numerous ways.

Tomorrow, I’m going to look at the pivotal moments of the past, to see if there is anything we can learn going forward.

And over the next week or two I’m going to share some special research I’ve been conducting over the past three months.

I can’t say much yet…

But I can say I think there’s a huge boom coming in 2018. One that will dwarf the hype in 2017 around ‘pot stocks’ and bitcoin.

It’s what comes after bitcoin. Cryptocurrencies are — in part — a red herring. And the smart money is starting to position itself.

And it’s going to be a pivotal moment in history, just like the ones I’ll be talking about tomorrow.

Stay tuned…

Good investing,

Ryan Dinse,
Editor, Money Morning


Ryan Dinse is an Editor at Money Morning.

He has worked in finance and investing for the past two decades as a financial planner, senior credit analyst, equity trader and fintech entrepreneur.

With an academic background in economics, he believes that the key to making good investments is investing appropriately at each stage of the economic cycle.

Different market conditions provide different opportunities. Ryan combines fundamental, technical and economic analysis with the goal of making sure you are in the right investments at the right time.

Ryan's premium publications include:


Money Morning Australia