I first noticed it in December…
China was reporting flu-like symptoms in patients in the city of Wuhan. By early January, it was clear we were in the early stages of exponential growth in the outbreak.
By now, we all know the story. The virus – COVID-19 – spread globally by early spring. Aside from the obvious health consequences, the virus – and the subsequent economic lockdowns – caused an unprecedented level of fear and uncertainty in the equities market.
The S&P 500 fell more than 33% in early spring. Some well-known companies like American Airlines, Carnival, and Hertz shed more than half their market capitalization. Hertz even declared bankruptcy and is now down 90% from its February high.
Of course, we also know what happened next…
From the March lows, the equities markets began an incredible run. As I write, the S&P 500 is up more than 57%. The technology-rich Nasdaq is up more than 71% from its lows.
By now, I know what many investors are likely thinking. Did we miss our chance? Is it too late to get into incredible investments?
The answer is no.
There is still a way to build an incredible portfolio of quality companies at reasonable valuations… if you know where to look.
The Biggest Winners This Year
As I write, the S&P 500 is up only about 8% on the year. But some other well-known companies have done much better.
The FAANG stocks (Facebook, Apple, Amazon, Netflix, and Google) have been on an incredible run since the fear-induced selling in late February and early March.
All five stocks are up double-digits for the year. Amazon alone is up an impressive 84%.
This is very logical.
In the wake of the COVID-19 lockdowns, the world turned to a variety of technologies to carry on with daily tasks.
Can’t go to the grocery store? Order groceries or everyday products on Amazon’s e-commerce platform.
A company’s workforce can’t go into the office? They must rely on cloud-based applications supported by Amazon’s AWS.
Stuck at home? Turn on Netflix or browse the web, where Google can serve us more ads.
Need to stay in touch with friends and family? Scroll through Facebook or Instagram to communicate.
That’s a very high-level explanation. But it demonstrates how these companies have been supplying the essential technology for a world on lockdown.
But the FAANGs haven’t been the only winners.
A Golden Age of Biotech
We’re entering a golden age of biotechnology.
Thanks to COVID-19, the biotech industry is progressing at a pace I have never seen in all my years as an analyst. Breakthroughs that would typically take years are happening in months or weeks.
Suddenly, the world is aware how quickly we can sequence a virus and develop potential vaccines… use artificial intelligence (AI) to find compounds that might bind to COVID-19 and render it ineffective… and how we can create antibodies that can fight a virus in a matter of weeks.
Every venture capitalist and private equity house has just woken up to how powerful these technologies are and how quickly biotech can move. We’re going to see an acceleration in biotech investment, early-stage companies, and IPOs (initial public offerings) as a result.
And many biotech companies are not impacted by supply-chain problems. They don’t care if the market is volatile. And when they make progress with their research and development, the stocks run higher.
And then there’s one more sector that has benefited from this new world…
A Tsunami of Data
My longtime readers already know this, but the COVID-19 lockdowns caused data traffic to spike dramatically.
In the weeks after lockdowns were initiated, videoconferencing traffic – for both work and socializing – spiked 300%. Gaming traffic exploded 400%… probably because the kids are staying home from school.
Our current network infrastructure just can’t handle this volume of data traffic effectively. The world needs 5G more than ever.
For companies that provide 5G technology, business is booming. And that’s shown up in a number of 5G stocks.
Take SBA Communications (SBAC). This is a company that erects and maintains wireless infrastructure, including 5G wireless architecture. I recommended this company to readers of my large-cap investing service, The Near Future Report, in June 2018.
SBAC sold off with the rest of the market earlier this year. But once the market realized how essential 5G technology would be for a world in quarantine, the stock rallied.
It regained all its losses and even made a new 52-week high. We sold SBAC for a 90% gain in less than two years. Outstanding.
We must remember that 5G is not a “nice to have” technology. It’s an essential piece of national architecture on par with roads, bridges, and tunnels.
5G is coming no matter what the economy is doing. In the event of a depression – which I don’t expect – quality 5G companies will weather the storm better than the broader market.
And consider one more thing…
It can be useful to analyze where “smart money” is being invested. That can show us where to invest.
For example, where have venture capitalists, private equity firms, corporations, and even governments been investing during the last six months?
The answer? 5G wireless technology and infrastructure, biotechnology, cloud-based services, AI, and semiconductor technology.
We can find great investment opportunities, regardless of the economic environment, by following where the money flows.
Building a Million-Dollar Tech Portfolio from Scratch
At the top of this essay, I posed a question: Is it too late?
As I said, the answer is no.
It is still possible to build a million-dollar tech portfolio from scratch in today’s market. But it’s important we’re investing in the right companies in the right sectors.
That’s why I’m hosting an investing summit on Wednesday, October 21 at 8 p.m. ET. We’re calling it Jeff Brown: Beyond Exponential.
On that date, I’ll show you the stocks to buy today to build your own million-dollar tech portfolio from scratch. So be sure you mark that date and sign up right here. And I’ll see you there.
Editor, The Bleeding Edge
P.S. For those who attend my summit, I’ll send you a bonus report with my No. 1 tech watchlist company. This is a stock I believe could rival the monster gains some of my followers have seen with NVIDIA – which has climbed more than 1,800% since I recommended it in February 2016.
You can get the name of that stock by signing up right here.