You remember those FANG stocks? They were the stocks you couldn’t afford not to own for years. There was, as we have discussed many times, simply no reason to leave ’em behind.
You’ve got to reshuffle the proverbial deck if you want to stay in the hunt for big profits. And you want to start by investing in a group of very special companies that pay you to buy their stock.
I call ’em the “Big A’s” – and they could return five times the broader markets over the next five years.
They could also account for more than 50% of all stock market gains in the next decade.
The “Big A’s” are where you want to line up big future profits now. So, let’s get to it…
“Big A” Stock No. 1: Amazon.com Inc.
Amazon.com Inc. (NASDAQ: AMZN)‘s story is one we’ve talked about many times. The company has gone from selling books to “whatever” the heck it wants.
Any industry with high margins and staid competition is at risk in a situation that is very much “Amazon versus everyone else.”
The argument for Amazon is very simple and super profitable.
The company is perhaps the biggest single consumer data repository in recorded history, has developed unprecedented artificial intelligence, is one of the largest cloud data providers ever, and has a nearly unlimited cash supply.
I think the stock will double to $3,500 in less than five years.
“Big A” Stock No. 2: Alphabet Inc.
Founded initially as a search engine, the company is under terrific pressure from zealous regulators chasing the wrong horse. Don’t fall for their shenanigans.
Like Amazon, Alphabet Inc. (NASDAQ: GOOG) is a company in transition. In fact, there are nearly a dozen businesses ranging from AI to apps to shopping, and from finance to medical research in place within it – none of which have been valued by the markets as of yet. But they will be.
I don’t think the stock will double under regulatory scrutiny, but that’s not a reason to avoid it. Quite the opposite is true, actually.
You’ll want to buy Alphabet because Congress can’t kill it. I’m betting that the company is a repeat of the Ma Bell breakup, which saw the companies split, build entirely new business ranges worth billions… then recombine.
I’m looking for $1,900 within two years here. Then a double for every component within five if the breakup actually happens.
“Big A” Stock No. 3: Apple Inc.
Unbelievably, many people still think of Apple Inc. (NASDAQ: AAPL) as a device maker. That’s not only naïve, but a sign that whoever makes that statement is hopelessly trapped in the past.
The real key to Apple’s success is a critical pivot into medical devices and personal information, where the margins are dramatically higher than any physical device it’s produced since inception. I broke that story years ago, and the market narrative has just come to us.
The addressable medical market here in the United States alone may be three times the global iPhone market. Factor in big data, a move into financials, and subscription services, and you can easily see the potential like I do.
I called for a double at the beginning of 2019, something many analysts thought impossible. Many weren’t so kind in their assessment of what I had to say.
Now, Apple is trading around $270 per share, up 71% in 2019 year to date.
I still think it hits $300 a share by Jan. 1, although, admittedly, the headlines leading into this year’s election cycle could alter the trajectory a bit.
Don’t get too caught up in that, though. I think the stock doubles again – and then some – within three years. Perhaps five to seven times in five years.
“Big A” Stock No. 4: Alibaba Group Holding Ltd.
That brings me to the most unlikely of the “Big A’s” and a stock that many people either don’t understand or – dare I say it – love to hate: Alibaba Group Holding Ltd. (NYSE: BABA).
The company is commonly thought of as the Chinese “Amazon,” but that’s a disservice. It’s a much more dynamic, and far larger, player than that.
Like all of the other Big A’s, Alibaba is involved in everything from retail consumer sales to big data, AI, and technology.
The key to Alibaba’s success, though, is its reach. People just don’t understand the volume Chinese consumers represent, so they underestimate it or dismiss it.
That’s a mistake of colossal proportions when it comes to your money.
Take Singles Day, for example. Alibaba sold more than $38 billion worth of goods this year – a substantial increase from last year’s already impressive record of $30.7 billion. The company hit $1 billion in sales in just 68 seconds and $10 billion in the first 30 minutes.
By comparison, U.S. retailers reportedly sold $7.9 billion combined last year on Cyber Monday, with total online sales over Thanksgiving Day and Black Friday approximately $3.7 billion and $6.2 billion respectively, according to Adobe.
Trade deal or not, there are approximately 700 million middle class consumers – nearly all of whom have smartphones and shop online – that can power Alibaba for decades. Even without its other businesses.
Three Ways to Get On Board Right Now
First, you can buy any of the Big A shares, individually or all at once.
Tuck ’em away in the Global Growth and Income segment of your portfolio. That’s the “40” in the proprietary 50-40-10 Model I created for my Money Map Report subscribers. Even just a single share – if that’s all you can afford today – will make a huge difference years from now.
Second, you can buy a fund like the Fidelity Contrafund (NASDAQ: FCNTX), which I also recommend as one of 10 “26(f)” investments for readers in the Money Map Report.
Or, third, if you’re a bit more sophisticated and fancy an income-oriented trading approach, consider selling “bullish put spreads” every time one of the Big A’s falters or there’s a general downturn.
That’s a blended, limited-risk option strategy using two put options that can help put some cash in your bank account over time as each of these stocks rises.
In closing, I hear from investors frequently that these stocks are “expensive.”
Not so. The reality is they’re dirt cheap. I know that’s hard to comprehend, especially with the market hitting new highs.
But let’s think back to 1980.
Berkshire Hathaway Inc. (NYSE: BRK.A)‘s stock stood at $300 a share, and people thought that was impossibly high. By 1990, a single share would have set you back $9,000. By 2000, it climbed up to $50,000 a share. Today, Berkshire trades at a jaw-dropping $328,650 per share.
Forget about the individual companies for a moment.
What matters here is that every single one of the Big A’s is changing the world we live in. They’re driven by trillions of dollars in spending that will happen no matter who is in the White House, which countries want to fight over trade, or even the Fed’s next move.
They are the very embodiment of the Unstoppable Trends we prioritize, meaning they’re best examined (and purchased) because they’re forward-looking growth machines valued in terms of what they will accomplish, not what they already have.
Latching on to them now will help you grow your money faster, with more certainty, and with bigger profits than you’ve ever dreamed.
— Keith Fitz-Gerald
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Source: Money Morning