5 SIGNS OF A TRILLION DOLLAR STOCK
With stocks like Apple & Microsoft now valued at over $1 trillion each, investors who identified these businesses and invested $1000 in each of them when they first became public (in the 80's) would now have $2.4 MILLION!
In the time that Apple and Microsoft have been on the stock market, thousands of stocks have claimed to be the next big thing but what is it that makes Apple and Microsoft so successful? AND how can investors successfully identify the next stocks that could make you into a MILLIONAIRE!
You want to find a company with a world changing idea in the same way that Microsoft brought us computers and Apple put a smartphone in our hands... Or perhaps even the way Amazon changed the way we shop. There are plenty of innovative stocks out there across well established industries however if you can find a company that pretty much creates a BRAND NEW SERVICE or way of doing something then the potential gains dwarf any stock that resides in an already established sector.
Apple wouldn't have become a trillion dollar company by just selling smartphones! The company has built an ecosystem and found ways to leverage their existing products and services to expand into other areas of the market. Apple has done this successfully with their computers, watches, headphones, speakers, streaming platforms & appstore! A company that can scale and CREATE AN ECOSYSTEM will be far more likely to continue growing whilst being better equipped to withstand competition and handle future disruption.
Apple and Microsoft had great ideas but they would not have become trillion dollar companies without Steve Jobs and Bill Gates! In the same way that Tesla would not be the most valuable car company on the planet right now without Elon Musk at the helm. Companies with highly respected visionaries in charge are far more likely to convince & woo investors into the business. Try and find businesses that are being run by their founders, as statistically they are far more likely to be successful. There are various reasons for why this might be however it's likely because FOUNDERS of a company will own a large portion of the business and therefore their wealth is tied closely to the success of the business.
4) INVEST EARLY
Although large and well known stocks can still produce terrific and more steady returns, you must find and invest in smaller companies if you want to achieve the sort of gains that we've spoken about. To identify such stocks, you need to find those with relatively SMALL MARKET CAPS. A good way to do this is by investing in a company as soon as they become available to trade. Therefore, try to keep up to date with the latest IPO dates as these are the first days that you can invest in certain companies! However, a word of caution - Don't get caught up with the big frenzy that often surrounds most IPO's these days. Make sure that you believe in the long term potential of the industry and the disruptive potential of the stock.
5) TAKE CALCULATED RISKS
Investors that made a lot of money investing in Apple or Microsoft in the early days will more than likely have lost many similar sized investments on other tech stocks that didn't play out so well! However considering that a $1000 investment in Apple back then would now be worth around $900k those investors could have had hundreds of losers and yet still made a huge profit from only the 1 winner!