This may sound like a late night infomercial, but I think you have what it takes to double your money in the stock market. That’s right, you have the knowledge and skills to turn $1k into $2k, $10k into $20k, and more! Okay, what really comes to mind when you hear about doubling your money via Mr. Market?
A scam? Super-shady-multinational-conglomerates? Sitting in front of 5 monitors making trades every minute on the minute? Leonardo Dicaprio?
While those may be feasible strategies for some, I’m writing to you about a much simpler approach, IMO. Chances are, you’re already doing 90% of the work required. It begins with your unique outlook on the world and its economy. Your job, hobbies, friends/family, and education all play a part in the hodge-podge that is your undiscovered investing prowess.
Think about it, there’s an industry that you know more about than anyone you know. You follow the trends and news regarding that area religiously and spend most of your free time consuming related content. Maybe it’s cosmetics and beauty products, fashion, video games, biomedical engineering, renewable energy, or whatever – it’s time to monetize your advantage.
Below you’ll find three stories of companies who’ve doubled, tripled, and even quadrupled investments in recent history. The best part? You’ll know two of the three companies very well, and even if you’re unfamiliar with the third, you’ll definitely recognize its products. These companies were no hidden gems that required tons of research or subscribing to a “newsletter” for insider information. Instead, your tip to invest in the companies below could’ve been discovered in places like Twitter and Instagram, chilling with your significant other, or even playing video games.
Note: It’s easy to pick winners in hindsight. That’s not the purpose of this article. The purpose, rather, is that the more you know about the past, the better prepared you’ll be for the future.
The king of DVD delivery turned streaming has created quite the culture shift over the past few years. From binge watching our favorite past times to entire seasons of their more recent Netflix Originals, this company has quickly become a part of our everyday life. Many Americans are now “cord cutting” and ditching cable TV for options like Netflix and Amazon Prime Video due to their endless content selections. This shift in consumer interest and need has certainly been good for business, and patient shareholders of Netflix have been rewarded, especially as of late.
Netflix has been around for quite some time (publicly traded since 2002), and they’ve certainly seen their ups and downs. But let’s say you were well behind the IPO, like me, when could/should we have started to notice the positive tailwinds?
It actually started years before but in 2014, Netflix started to catch fire in common internet speak and language. Verbs like Netflixing, to Netflix, and the infamous Netflix and Chill took the internet by storm. Nearly a year later, “Netflix and Chill” was officially added to Urban Dictionary. Nikki Minaj and Netflix themselves both joined in on the fun on social media (linked posts). At this point, it would’ve been fair to assume that Netflix was onto something.
In early April of 2015, shares were priced around $60. Compare that to today’s current share price of $131, and Netflix shares are up 120% since, 110% higher than the S&P 500. April ’15 marked the beginning of a bullish run for Netflix, where shares ballooned to over $120 in August of 2015. Who would’ve guessed?
A $10,000 investment exactly two years (1/10/2015) before this writing (1/10/2017) would be worth $28,750.
With the House of Mouse approaching its 90th-anniversary next year, it’s safe to say that this company is a bonafide piece of American history. Most of us grew up watching their movies, playing with Disney-themed toys, or even touring their theme parks. Personally, I didn’t just like Simba, I was Simba. Disney was an integral part of my childhood, and they continue to be prevalent through acquisitions like the Star Wars franchise.
Disney stock, however, hasn’t always reflected their omnipresence in our culture. In the last ten years, shares of Disney have been volatile, to say the least, with lows below $30/share and highs above $120/share. Despite the volatility, Disney continues to dominate the entertainment and content creation world and make great investments and acquisitions. Here are a few examples of businesses in their portfolio:
- TV Networks such as ESPN, ABC, A&E, and History
- Marvel Studios (The Avengers, Iron Man, Daredevil and other Netflix originals)
- Star Wars
- Pixar and animated franchises (Toy Story, The Incredibles, Finding Nemo, Cars, Up, etc.)
To maintain the theme of “buying signs” and moments in recent history where Disney would’ve been a great investment, let’s look at a few pivotal moves.
Disney acquired Pixar in January of 2006, while Disney hovered around $26 per share. Adding an incredible set of franchises and the top animated movie studio didn’t seem to impress many, as shares increased slightly, only to fall below $30 again in 2008/2009.
Disney acquired Marvel in August of 2009. Two months later, a share of Disney was going for only $28 per share. At this point in time, buying shares or adding to your position would have returned over 350%. ($10,000 invested at the low point of 2009 ($14/share) would be worth $75,000 today.)
Disney acquired Lucasfilm and the Star Wars franchise in 2012 for 4 billion dollars. That may sound like a lot of quiche, but Disney has already grossed over 3 billion for the first two of six planned Star Wars films. It’s hard to fathom this franchise losing relevance in our lifetime and should continue delivering returns like Pixar, Marvel, and ESPN have done historically. Oh, and BTW, $DIS shares were in the $45-$50 range for nearly all of 2012. Entering at this point would have returned 150% of your investment ($10k to $25k).
Activision Blizzard ($ATVI)
Whether you have personally thrown controllers and screamed profanities at teenagers through your headset or had a significant other ignore you for hours on end, there’s a good chance you are familiar with the Call of Duty franchise. It’s been around since 2003 but didn’t make a significant impact until 2007, when Call of Duty: Modern Warfare was released. This iteration, along with faster internet speeds and the ubiquity of Adderall, changed the game (see what I did there?) for first person shooters and competitive online console gaming.
If you had taken note of the game’s publisher, Activision, and researched the company, you would’ve discovered other titles such as Tony Hawk’s Pro Skater, Guitar Hero, and World of Warcraft (post-July 2008 after an acquisition of Blizzard Entertainment). An impressive lineup, eh?
So let’s say you invested even a year after CODMW’s release, you would have earned nearly 400% on your investment. Even if you were late to the party and invested shortly after another hit release years later in October of 2014, Destiny, you would have nearly doubled your money in the two years since.
- Buying a share of a company makes you a part owner of that company. Invest in great companies that you know, love, and want to be an owner in for years to come.
- Winners tend to keep winning. Don’t let a stock’s recent “pop” or increase deter you from investing. As you see with these three examples, the top is never the top. Great companies will continue to rise along with the market over time.
- While overreacting to daily market news about a business is a bad idea, being aware of trends and potential cultural shifts that favor one business or another could pay dividends.
- Do you know any teenagers? What are they into? That’s a great place to start.
Final disclaimer: I may own shares in the companies I mention and this guide, or any other investing and finance-related information on masonwoodruff.com, is not intended to be investment advice.