Being A Passive Investor Won’t Get You Far in 2019

Here’s a question for you. But before you answer it you have to promise you won’t cheat the answer. Don’t Google it, don’t search for it, just off the top of your head provide the answer you think is right.

Ready?

What public company was the biggest in the world by market cap at the end of 2018?

Quick. What’s your answer?

Good chance you’ve probably just said Apple. Or if you half suspected the question itself would indicate it wasn’t who you thought it was you might have answered Amazon.

In both instances you’d be wrong.

Microsoft was the world’s biggest company by market cap at the end of 2018. With a market cap of approximately US$772 billion, Microsoft pipped Apple (US$747 billion) and Amazon (US$747 billion) by a cool US$25 billion.

Actually, now you should go and try search for the answer anyway — just in case you don’t believe me.

Good luck. It’s not exactly headliner news that the world’s ‘boring’ tech company is now the most valuable. Also, have a guess at the last time Microsoft was valued (by market cap) as the world’s biggest?

2002.

While the likes of Apple and Amazon have taken near 30% haircuts, Microsoft has been relatively stable. What’s super interesting is that over the rolling year Microsoft is worth more than it was this time last year.

Not a lot of tech companies can say that. Apple, Tesla, NVIDIA, IBM, Intel are all trading lower than a year ago, or marginally higher. It’s not much, but Microsoft is a decent 14% higher over the year. Not bad considering the wider NASDAQ Composite is lower as well.

The maths are indisputable. $1,000 in Microsoft at the start of 2018 would be worth more today. Simple. Now we’ve established that as fact the next question is simple.

What’s this ‘tech crash’ that everyone’s banging on about?

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Are we really experiencing a ‘tech crash’?

Okay, okay, a lot of tech companies are worth less than they were around September. Even Microsoft has taken a clip. But the truth is in every market you’re going to find winners. Even when there’s a purported ‘crash’ of which, there’s clearly not, you will still find winners to invest in.

Take for instance a recent recommendation we sold out of in our premium Revolutionary Tech Investor advisory service. In April 2018 we put a BUY recommendation out for Cronos Group Inc [NASDAQ:CRON] at a price of US$6.37.

Cronos was a company involved in the legal marijuana industry in Canada. We could see it had a lot of potential. And that proved to be correct. Now the ride was wild. At one point, infamous short seller ‘research’ firm Citron research put out a scathing report on Cronos and its share price plunged almost 30% in a day.

Investors were asking and questioning the potential of the stock. But we didn’t question it. Then in December US$92 billion tobacco giant Altria kicked in US$1.8 billion to buy a stake in Cronos.

That was enough for us to decide to take profits. And on the 12 December we decided to sell the position. That banked a 101% return in eight months. All this amidst a supposed tech ‘crash’.

Nothing is truly as it seems when it comes to markets. And if you know how to pick winners in a supposedly ‘tough’ market then you can set investors up for unbelievable windfall.

The best way to invest in 2019

That’s why in 2019 the best advice I can give you is to not be a lazy, passive investor. Get up off your backside and take control of what you invest in and where you invest your money.

The worst thing you can do is to look at everything as a whole and just follow the trend of the masses. Nothing is as it seems, so take the impetus to get to the depths of the real money maker opportunities in 2019.

For example, maybe you caught wind that ‘passive investing’ was all the rage a few years ago. And you decided to plonk a bunch of funds into ETFs.

Early in 2018 the ASX published an article on their site from a State Street Global Advisors ETF strategist.

They explained that, ‘2017 proved to be another high-water mark for the Australian ETF industry, with inflows approaching $6 billion and funds under management topping $33 billion.’

Globally the ETF industry was topping more than $4.5 trillion in assets.

This of course came on the back of an epic market bull run, which made ETF investing easy. Only problem is that’s also lazy investing. And lazy investing caught up with ETF buyers in 2018.

This is a stock pickers’ market. Always has been, always will be. ETFs, fund of funds, these passive investment options, are a cop out. It’s lazy investing. It’s a game for the average punter looking for average returns.

Don’t be the average punter.

The only way to play the market in 2018 was to pick your stocks. Picking the right ones carefully has the potential to deliver profits against the flow of the tide. The only way to play the markets again is to pick your stocks. And there’s no better playground to pick stocks than from the hundreds, thousands of small-cap stocks on the ASX.

Has the cannabis craze fallen away? We don’t think so. New Zealand is set to hold a referendum in their 2020 general election to legalise recreational consumption. We expect it to pass and for NZ to follow the Canada model. But when will the time be to get into NZ exposed cannabis stocks? 2019, not 2020 when the masses get wind of what’s coming.

Then once the Australia government sees the windfall these nations will make from the legal green rush, how long do you think it will be until they follow suit?

Likewise, the fallout from the Banking Royal Commission has yet to fully shake down the incumbent banks. As it does there’s opportunity galore in the next wave of fintech stars on the ASX. The future of banking is up for grabs but the stocks you want to be invested in aren’t the one’s you’ll find in an ETF. They won’t get coverage on CommSec’s daily update. They’ll almost never get listed in the AFR.

Those who say this isn’t a stock pickers’ market simply don’t know about the thousands of cracking small-cap companies on the ASX to pick from. Of course, it’s not an easy game to investigate, filter, and then actually dig out the small-cap ASX winners — that’s why you need the right guidance, the right advice and the right team to help you on your way.

Regards,

Sam Volkering,
Editor, Secret Crypto Network

PS: Aussie expert reveals his free step-by-step small-cap guide. Read now. Download your free report now.


Phillip J Anderson is an Australian academic, author and student of stock, commodity and real estate cycles. Drawing on the work of British economist Fred Harrison and American technical analyst WD Gann, Phil developed his own theory about 18-year real estate cycles in the early 1990s. Since then, Phil has been using cycle theory to guide his own investment decisions — crediting the phenomenon with his decision to move to a 100% cash position in July of 2007, just before the GFC wreaked havoc on the Australian stock market. He has also built up a lucrative property portfolio here and in the UK. Phil is currently predicting a 14-year boom in Australian house prices; an idea he expands on more in a brand new Port Phillip Publishing film, ‘Remembering the Future’.


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