Happy Monday To The Greatest Living Americans!
A special thank you to all of you guys who read my newsletter every day, I look at all of you as my family and I will continue to do everything in my power to help you navigate the markets, as we move through the largest innovation boom since the early 1900’s.
Another week has begun with some volatility in some of our favorite companies, but that’s ok because we know what we own and we have a longterm view of markets. At G.L.A INVE$T RE$EARCH we understand that markets over the short term are a voting machine or a popularity contest that are swayed up and down by news, opinion, and emotion. We also understand that over the longterm the markets transform into a weighing machine that measures a company’s true value with its fundamentals (revenue, earnings etc.)
Right now the big thing that’s causing the volatility is inflation worries, interest rate worries, which are both bi-products of the war in Iran. The national debt is another real problem, and the only way to solve that problem (IMHO) is for the US to grow our way out of it. This is the belief of ELON MUSK, CATHIE WOOD, ALEX KARP and many of the other tech leaders that I monitor daily. This is where AI, ROBOTICS, ENERGY STORAGE, GENOMICS, and BLOCKCHAIN come in.
In the early 1900’s we had electricity, the telephone, and the automobile that hit mainstream and grew global GDP from roughly 0.6% (where it was from year 1000-1900) to a 2-3% yearly AVG. This time we have 5 platforms mentioned above that are converging at the same time, which is expected to grow global GDP to average above 7% a year by the end of this decade. If that’s the case, what should we do as investors to take advantage of this boom and to protect our wealth? IMHO we need to deploy a strategy that will take advantage of these technologies, with the highest probability of success.
If you look back to 2010 when the cloud was the driver, a buy and hold strategy of “FAANG” (FB,APPLE,AMAZON,NETFLIX,GOOGLE) was the best strategy. Then in 2020, before ChatGPT’s November 2022 launch, the best strategy was a buy and hold of The “MAG 7” (NVDA,AAPL,MSFT,GOOG,AMZN,META,TSLA). An equal weighted portfolio of the FAANG stocks returned an average 34% per year from Sept 2010 to August 2020. Then the MAG 7 (equal weight) averaged 37% per year from 2020 -2025.
The investors who attempted to trade those names didnt even come close to the buy and holders. Believe it or not the average hedge fund returned around 5% annualized from 2010-2019. Yes only 5%!!! From 2020 to 2025 the average hedge fund return an annualized yearly return of 8%. Hedge funds are supposed to be the best of the best, using quants / algo’s and everything under the sun, but they still severely underperformed the S&P500 and were obliterated by a buy and hold strategy of “FAANG” and the “MAG 7”. CNBC won’t tell you this, your stock broker won’t tell you this, your financial advisor won’t tell you this either because they are not incentivized to do so. Wall Street won’t tell you the truth because there is no money in the truth.
Wall Street want’s retail investors to do two things, they want you to be buying and selling to generate fee’s, and they want retail investors to think the markets and investing is super hard so you need to hire a so called “PRO”, When in reality a small concentrated portfolio in the best diversified tech companies with a buy and hold strategy has proven to be the best approach. Obviously this is not investment advice, these are just my thoughts and observations from the last 25 years.
Every investor has different goals, different time frames, and different investment objectives, so make sure you take into account all of these things when you build your portfolio and strategy. Also think deeply about your risk tolerance and your volatility tolerance because both will be tested over the next few years as the innovation hits and the disruption that comes with it. Remember that volatility is absolutely part of this game, you cannot achieve big returns without it.
The G.L.A INVE$T APEX 10 INNOVATION PORTFOLIO(NOTINVESTMENTADVICE)
#1.TESLA – (TSLA)
#2. SPACEX -(SPCX)
#3. PALANTIR -(PLTR)
#4.STRATEGY -(MSTR)
#5.ROBINHOOD – (HOOD)
#6.NVIDIA (NVDA) / CEREBRAS (CBRS)
#7.GOOGLE (GOOG)
#8.AMAZON (AMZN)
#9.LEMONAIDE (LMND)
#10. STRC – STRATEGY 10% DIVIDEND (DIGITAL CREDIT)
HONORABLE MENTIONS – BMNR ASTS MSFT TEM OKLO BE MU CRSP
INVEST IN VISIONARY FOUNDERS WHO ARE FOCUSED ON CREATING THE BEST, MUST HAVE PRODUCTS AND SERVICES, THE COMPANIES THAT SOLVE THE BIGGEST PROBLEMS WILL HAVE THE LARGEST RETURNS.