By Kris Sayce, editor, Casey Daily Dispatch
It’s hard to resist.
The appeal of a quick buck.
Who doesn’t want to make two, three, or five times their money in short order?
Weeks… days… hours!
Trouble is, it’s almost impossible to do that with any regularity. Besides, who wants the stress, and who has the time for it?
The truth is, there’s a better way. It’s proven, too.
And according to one investing expert, now is the perfect time to put it into practice…
We’ll come back to that investing expert shortly. But first, if this is your first time reading the Dispatch, welcome. If you’ve been here before, welcome back.
At the Dispatch, we have two goals:
To introduce you to the most important investing themes of the day, and
To show you how to profit from them.
We do this by showcasing ideas from our in-house investing experts: Dave Forest, Nick Giambruno, and the founder of our business, Doug Casey.
In today’s Dispatch, we’ll show how the most important part of investing is the one thing most investors forget…
Four Criteria for “100 to 1” Stocks
We learned this from our favorite investing book, 100 to 1 in the Stock Market: A Distinguished Security Analyst Tells How to Make More of Your Investment Opportunities by Thomas William Phelps.
Perhaps you’ve heard of it. It was first published in 1972.
We like the book for two reasons. The first is how simply the author gets his message across… using real-life investing examples.
The second reason is that it fits right into the Casey Research approach to investing. It’s the strategy that, more than any other we’ve seen, follows our approach to buying, holding, and investing in stocks.
(Remember… we’re looking to fill our columns in the “10 x 10” Approach with investing ideas that can give us 1,000% returns over various timeframes.)
Phelps tells the story of Paul Garrett, a former executive at General Motors… and an avid investor. According to Phelps, Garrett had four simple criteria when selecting a stock:
It must be small.
It must be relatively unknown.
It must have a unique product that would do an essential job better, cheaper, and/or faster than before, or provide a new service with prospects of great and long-continued sales increases.
It must have a strong, progressive, research-minded management.
And ultimately, it’s important for investors to “buy right, and hold on.”
To prove that the strategy works, Phelps found that from 1932 to 1971, there were 365 stocks that would have turned every dollar invested into $100 or more. That’s 9,990%. An amazing statistic.
This brings us to the most important part of investing. Not when to buy or when to sell… the most important part is “time.”
You see, Garrett bought well. Sometimes he sold well, too. But most of all, knowing that he had done the research and had bought good companies, he let time do its work.
That’s how he came to “buy right, and hold on.”
It’s this kind of approach that has worked extraordinarily well for one of our investment experts, Dave Forest…
We Bet Only One in 10,000 Investors Has Heard of This
Looking at Garrett’s criteria, the companies and the trend that Dave has tapped for the biggest potential fit perfectly.
His top pick is small – it has a market cap less than $1 billion.
His top pick is relatively unknown – we would wager that not one in 10,000 investors have ever heard of it.
Based on what we’ve learned, it certainly meets the criteria of providing a better service, and it most definitely has great prospects for sales growth.
And for the last four years, at least, it has met the industry average of spending more than 10% of its revenue on research and development.
To our mind (and most importantly, Dave’s mind), it ticks the boxes for a company that’s the right one to buy now – and then hold on to for long-term growth.
That’s especially so when you consider that the company in question is involved in one of the biggest tech trends of the last 10 years – the 5G infrastructure rollout.
But what makes this opportunity so special is that the company has developed a technology that helps cure one of the 5G network’s biggest problems – “dead spots.”
Specifically, 5G’s lack of reliability inside buildings. You can be next to a 5G tower outside and have great data downloads… yet walk into a coffee shop less than 100 feet away… and no longer have access to the 5G network.
And now, your expensive new 5G smartphone is no better than an old model.
As you can imagine, that’s a big deal. One of the biggest trends since the release of Apple’s iPhone in 2007 is the continued move towards wireless data.
That move shows no signs of stopping. According to data analyst Perficient, in 2016, 56% of website traffic was accessed through a mobile device. By 2020, that had grown to 64%.
With This Idea, Everyone Benefits
So if there are any problems at all with 5G, especially inside buildings, it’s a big deal. Remember, this isn’t just about casual use inside a coffee shop, restaurant, or office building.
As mobile usage has taken off, more and more people are ditching fixed line internet connections. A mobile device is often the only access to the internet that many people have.
Hence the rush to fix any potential flaws in 5G technology. And Dave says one company has that solution. That’s why he’s so excited, not just about that one company, but about the whole sector.
Because if one company can help ensure a smooth rollout of 5G networks, it won’t just benefit them…
Everyone will benefit. Including many other sectors.
Just be aware, these aren’t quick-hit gains.
These are “buy right, and hold on” plays. The type of investment where you buy today and watch it compound year after year after year… turning every $1 down into $10, $40, $70, or $100 or more.
We can feel Dave’s excitement on this one. It’s been a while since we’ve seen him pound the table this hard on an idea. That’s why we’re devoting this entire week to sharing it with you.
The opportunity is that big.
And tomorrow, we’ll show you more, including some of the sectors and industries that are set to benefit the most from the 5G rollout. Make sure you don’t miss any of it.
Editor, Casey Daily Dispatch