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In case you haven’t noticed, the stock market hasn’t been so hot lately. Almost nothing gives a plus sign. However, I have my eye on a sector that I expect to deliver a lot of upside in the coming months, and to start doing so much earlier than most other stocks…
I’m talking about green hydrogen.
Like most other stock market sectors, green hydrogen stocks performed well between July and August.
But the stock market’s summer gains were nearly nullified—modest gains turned into sizable losses. Speculative stocks such as those in the green hydrogen sector bore the brunt of this decline.
But speculative stocks often expose investors to stomach-churning volatility on their way to outsized profits.
Let’s consider a handful of classic examples…
Even the biggest stocks stumble
In 2000, Amazon.com Inc. (AMZN) shares fell 66% between January 3 and October 10. If you had bought the stock that day, your investment would have gone down another 80% in the next 12 months!
But if you had held your position, you would have recouped your losses and doubled your investment in three years. After four years, this profit would increase to 400%, after 13 years to 1000% and after 20 years to 10,000%.
Remember, these are the returns you would reap from a stock that dropped 80% right after you bought it.
Apple Inc. (AAPL) stocks have undergone a similar metamorphosis – from mega-loser to mega-winner.
In the first months of 2000, they fell by 66%. If you had bought the stock then, your investment would have declined by an additional 42% over the next three months.
But if you persisted, this investment would have recouped its losses and generated returns of 400% in five years, 1,000% in seven years, 2,000% in 10 years, and a staggering 35,000% in 20 years.
These selected examples may not be typical, but they are more common than one might expect, especially in the universe of speculative, ambitious companies like those that represent the green hydrogen sector.
The oil trade is not over yet
The mainstream public would have you think that the energy swan song has only started because oil is falling again.
But this belief could cost you a lot of money.
In fact, I’ve spotted such a potentially lucrative opportunity in the energy space that I’m willing to tag it for FREE.
The past does not determine the future
In many ways, these not-for-profit companies are similar to “junior” mining companies or early-stage biotech companies. They are brimming with potential, but lack the kind of success that generates profit growth.
A promising start-up mining company, for example, may have a large resource project but not enough capital to advance that project into production. At this stage, mining stock is a faith-based investment; many pieces must fall into place to reward that faith with a profitable outcome.
Early-stage biotech companies are the same. They enter the stock market as for-profit companies with promising technologies and big dreams, while rarely having enough capital to advance those dreams through clinical trials.
Many early-stage biotech companies fail, as do many junior mining companies. Similarly, I expect many green hydrogen companies to fail – or at least fail to deliver on their promises. But early failures and/or severe stock market selloffs are not reliable indicators of future success.
During a panel discussion at an investment conference in 2015, the moderator asked those of us on the panel to name our favorite mining stock of the moment.
I named Ivanhoe Mines (IVPAF)a stock that has plummeted 86% over the past three years and continues to fall another 25% in the next six months.
But Ivanhoe recovered and rose more than 1,100% since the day I gave the thumbs up at the conference.
Thanks to the knowledge of this stock, I took the opportunity to recommend it Speculator readers during the stock market sale in early 2020.
Ivanhoe could easily be abandoned; it has performed so poorly for so long that many investors have probably given up on it, understandably so. But even the biggest speculative stocks can deliver disappointing results for uncomfortably long periods.
Stay the course and don’t give up
I remain bullish on the speculative stocks that populate the green hydrogen industry.
This industry is still in its infancy, so many of the stocks I have my eye on are struggling to establish a dominant presence in it. They might not succeed, but it’s too early to tell.
The ultimate success of these stocks is not certain, but so what does seems close, is the long-term success and growth potential of the entire green hydrogen industry.
Bottom line: The green hydrogen story deserves your attention.
And if you’re ready to take this emerging green hydrogen bull market by the horns, I have two more recent recommendations Fry’s Investment Report.
Both recommendations, like Amazon and Apple in the history lesson above, are declining, but as I illustrated in this article, I expect good things from both in the future.
Click here to learn how to gain access to them.
With respect,
Eric
MY NUMBER 1 RECOMMENDATION TO CREATE FULL TIME INCOME ONLINE: CLICK HERE