It’s funny. When you are in the midst of something, you don’t always realize the grandeur of certain events going on in your life.
I would go so far as to suggest we’re in the midst of something magnificent today that has the potential to 10x some of your investment capital.
My First 10x
When I was in college, I was witness to an incredible stock market boom – the dot-com boom. Wow, what a fascinating time! There was money being thrown out to all sorts of ideas from VC firms flush with cash. I can clearly remember, Amazon just being an online bookstore. It was an Internet darling (AMZN) that sported a $100+ price tag for a while in the year 2000.
After 9/11, Amazon’s stock was decimated and dropped to single digits! I was in awe.
I was still learning about stock market fundamentals, so I didn’t really know how to analyze Amazon as a company. But, what I did know was that it held on after the crash and kept chugging along.
I knew that I was still using them personally and even venturing out to purchase other non-book related items, like tech, etc. So, I thought it had the potential to be a good purchase and I wanted in.
Once I started working, I began to have a little discretionary income and began investing by setting up a ROTH IRA. I didn’t have a lot of money back then, so I purchased 50 shares of AMZN at ~$10 per share. I sat on this for about a year and saw my share price more than double. I decided to sell it off to capture my profits and felt pretty smug about doubling my money in little over a year. However, I just took out the “purchase price” and kept the remaining 15 shares as “gravy”. Not bad, right?
Well, as I continued to watch the company grow, I decided to throw some more money into it. Again, I was able to purchase it low and sell it high, once again locking in some handsome profits. Finally, I convinced my wife to purchase some into her Roth IRA portfolio, but by this time it was all the way to $48.58 per share (4-5x’s where I had been purchasing it). We didn’t know if could go much higher, so we decided to pick up just 15 shares.
It’s How Much Now?
So, if you didn’t know, Amazon has had a pretty good run in the past decade. Not only do they sell everything under the sun online, they also have a massive data and cloud infrastructure business that many corporations have come to rely on. Additionally, they’ve entered into numerous other verticals, including TV and movie production.
Today their stock price is $980.35!
Boy, I wish I had kept all of my original stock… it would have been worth over $100k today… ah well. 🙂
I shouldn’t complain. After all, I trounced 10x returns with this purchase.
In the Know
I wasn’t looking at their fundamentals at the time, rather their momentum and infrastructure growth. Their EPS could have been much lower that their competition, but I hadn’t a clue on how to compare them back then.
Nevertheless, what I did notice, was their data business before a lot of other people did. This was probably because I was in I.T. at the time and virtual servers were rather hard to comprehend from other investors. So, it truly does pay to know what the other guy doesn’t and also okay to ride a wave of momentum up!
So, great theory, or dumb luck? Truth is, I don’t really know. However, I do know that if I sat on the sideline, I wouldn’t have made a dime.
Fast track to FIRE
Reaching FIRE sooner than later takes a certain amount of risk. Although I’m risk averse by nature, I’m also keenly aware that there’s no glory without some skin in the game.
If you’re making a good income and looking to FIRE, equities is certainly an investment vehicle that can get you there. Or, if you’re like me, you can use a combination of different vehicles – savings, stocks/equities, real estate, and businesses.
My Outlook Today
With regards to equities, I should note quickly, that my individual stock purchases were more like “side bets” because the bulk of my investments were being funneled into the markets slowly and steadily via the likes of ShareBuilder and Etrade.
I did and still do have a small “play” account where I’m able to take some additional risks/gamble to seek out higher gains and keep my interest going. I’ve definitely been burned before but also hit a few winners like AMZN along the way.
The Million Dollar Question?
So, where’s the next 10x opportunity? Any ideas? Why?
Sectors and Tech I Like
Here are some areas that have caught my interest recently and I’m trying to figure out the best way to make a play in one or more of these areas.
VR & Augmented Reality
I mentioned this in one of my previous newsletters. VR and AR are going to change the way we see the world… literally! That means there’s going to be a huge opportunity for the companies who are able to innovate in this new dimension.
For example, I’d love to invest into a company that focuses on a VR exercising experience. Not only is it cool, but you could take a killing with a VR gym. Imagine not having to drive to the gym, but having the same interaction with people and looking around in a real life gym environment from the comfort of your own home.
Some of the bigger VR players currently are Facebook (who bought and owns Oculus Rift) and Samsung. They make the most sophisticated headsets currently.
Cryptocurrency (eg. BitCoin)
It’s pretty cool to see a new currency emerge out of nothing. Cryptocurrencies are likely here to stay. In fact, some countries are beginning to embrace it – like Japan!
I don’t pretend to know that much about BitCoin, but I believe you can purchase it on an open exchange.
Again, as the Internet becomes more and more prevalent in our lives, people are going to want a quick way to receive/spend money
I’m pretty excited to see and imagine what’s next.
I don’t have a crystal ball, but I do have enough tenacity to take an alternate perspective from the average investor.
Readers, what do you think? What are your million-dollar ideas? Are you going to do take action to seek your own 10x return?
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