I’ll admit… I’ve seen a lot in my 15 years as a professional investor. I’ve survived punishing markets like 2008… And enjoyed periods bursting with opportunity, like 2012–2013. During a roughly 1-year stretch, I recommended Amazon (AMZN), Google (GOOG), and Nvidia (NVDA). What a ride! Amazon and Google of course came to dominate tech, and handed out gains of 1,500%+ and 600%+ since then. But you might be surprised to learn Nvidia was by far the most profitable pick of the 3. It’s up as much as 8,376% since I recommended it at a split-adjusted $2.86/share. In fact, it was my 2nd best published stock pick ever (I’ll tell you #1 at the end of this essay). Why did Nvidia’s returns blow away Google’s and Amazon’s? Because unlike Google and Amazon in 2012, Nvidia was small when I found it. Did you know that small stocks, as a group, reliably generate much bigger returns than large stocks? A famous research paper found that, since 1926, “big stocks” returned 9.4% annually, on average. Small stocks returned 11.6%. That difference might not sound huge. But if you know how compounding works... it makes all the difference in the world. The same paper pointed out that, if you’d invested $1,000 in “big stocks” in 1926, you’d now have $4 million. If you’d invested $1,000 in small stocks, you’d have $26 million! And that’s just the long, slow outperformance you can expect if you close your eyes and buy a whole “index” of small stocks. If you can identify the best ones, the financial rewards are huge. That’s not according to me. That’s according to all-time-great investor Warren Buffett… We all know Buffett has a legendary track record at Berkshire Hathaway, having achieved 20% returns per year over the past 54 years. But Buffett admits he could have made much more money focusing on smaller, faster-growing companies. He says: If I had $10,000 to invest, I would focus on smaller companies because there would be a greater chance that something was overlooked in that arena... The highest rates of return I’ve ever achieved were in the 1950s... but I was investing peanuts then. I think I could make you 50% a year on $1 million. No, I know I could. I guarantee that. But you can’t compound $100 million or $1 billion at anything remotely like that rate. Compounding 50% per year is no joke. Even if you start small, with a $20,000 portfolio, and don’t contribute another dime to it, you’ll be a millionaire in 10 years. By year 15, you’ll have $8,757,878. Is this a crazy, unrealistic goal? I don’t think so. My readers and I are living proof that it’s possible to consistently make returns in that ballpark. Since the inception of my Project 5X microcap newsletter at RiskHedge (January 2019), we’ve achieved 47.7% average annual returns. Confirmed by internal audit. That’s through thick and thin—including red-hot markets like early 2021, and ice-cold markets like early 2020. Of course, I haven’t done it for decades yet like Buffett. But I intend to. At the RiskHedge 5X Phase Summit tomorrow at 2:00 pm ET—not only will I show you my #1 secret for identifying small stocks that hand out large returns… I’ll show you why NOW—in early 2022—is the time to strike for 5-fold, 10-fold, or even 20-fold gains—just like the last time markets handed us this setup. ***Important: this is an emergency-style Summit that we organized quickly. To guarantee your spot, you must register in advance. Click here to do so. Thanks for reading, Chris Wood
Chief Investment Officer – RiskHedge PS: When you sign up, you’ll get a copy of my research report on TGAN—which is the tiniest stock on my radar. I’m very intrigued by how this tiny company is disrupting the massive battery industry. Discover more when you sign up for the RiskHedge 5X Phase Summit here | 