Tuesday, October 01, 2019
Tech stock profits are over.
Or at least, that’s what the mainstream media would have you believe.
Thanks to the awful performance of recent tech IPOs, the media has issued an obituary for the entire sector. Many “experts” are advising investors to dump tech stocks and hide their heads in the sand.
But as I’ll explain today, that would be a huge mistake.
You see, this is far from the end of the tech bull market…
On the contrary, we’re at the beginning of one of the greatest “tech booms” of our time.
The Tech Bull Market is… Over!?
It’s been nasty out there recently.
Uber, Lyft, and Slack — as well as a long list of other tech companies — have all crashed and burned in their public market debuts.
As their stocks plummet, more and more headlines are pronouncing the death of the tech sector.
But here’s my advice: ignore them!
Remember, the press has to write about something. That’s what they do.
The reality is that we’re nowhere near the end of the tech boom.
As you’re about to learn, this is just the beginning…
The Public Market Reckoning
If you look under the hood of these failed IPOs, their performance starts to make sense.
Why? Because most of these companies were vastly overvalued!
For example, many of the tech companies going public right now sport price-to-sales ratios of nearly 15. That’s compared to an historical average of just 3.7.
How did valuations get so out of whack? It’s simple, really. As private startups, they’d raised massive amounts of funding over many years.
This funding kept pushing their valuations up — despite the fact that they were losing huge sums of money and had fundamental problems with their business models.
So, by punishing their stocks when they finally go public, the market is doing what it should be doing:
Pricing them rationally!
Tech Growth Far from Done
The fact that investors are now valuing these companies rationally is a good thing.
A rational market has room to run — which means there’s more upside.
For example, look at Amazon...
Given that its valuation has already reached $1 trillion, you might think it doesn’t have room for growth.
But consider this:
As a whole, online retail spending in the U.S. currently accounts for just 10% of the overall market. Now compare that to Asia, where online spending accounts for 20% or 30% of the overall market.
Clearly, as U.S. consumers continue to shift their spending to online channels, Amazon’s sales could soon double or even triple.
With that in mind, it wouldn’t be unreasonable if Amazon’s share price doubled or tripled, too. That would make it the first $2 trillion to $3 trillion-dollar market cap company.
That would be a decent return for Amazon investors.
But here’s the thing:
That’s not where I believe the next great wealth-generating opportunity is in tech…
In fact, a double or triple is nothing compared to the opportunity we’re tracking currently.
If you’re looking for big investment returns in the tech sector, there’s something you need to understand…
Once the leaders in a new sector are generating big profits (like Amazon is in e-commerce), you might still earn a decent return by investing there — but you won’t earn life-changing wealth.
To earn 10x to 100x your money, you need to focus on sectors and companies that are creating major innovations — or as I refer to them, breakthrough technologies.
So, over the next few weeks, I’ll be introducing you to several sectors and companies that are creating these breakthrough technologies…
Tech’s Next Great Wealth Generator
As you’ll see, by investing in these companies today, you could earn massive returns.
In the coming weeks, right here in the Crowdability newsletter, I’ll share the names of specific companies and investment ideas with you.
In fact, as soon as I finish writing this article, I’ll get back to wrapping up a new research recommendation for you.
The tech company in my upcoming report could hand investors gains of 52,442%. That would be like turning a small $1,000 investment into $525,400.
Next week, I’ll tell you more about the trends that will push tech stocks like this one to new highs…
So be sure to tune in next Tuesday at 11:00 AM EST!
Ahead of the tape,