Over the past year, our Shoot the Moon Stock Picks have included:
· Veritone at $2 in February 2020. Current value $49.
· Nio* at $1 in October of 2019 (found by MM in a retreat). Current value $63.
· Zoom $90 in March of 2020. Current value $432.
· Aphria at $1.95 in March of 2021. Current value $27.
*Nio was found at our October 2019 Investor Educational Retreat by Mitchell Marcy, who was using our Stock Report Card, 4 Questions and 3-Ingredient Recipe for Cooking Up Profits.
There is a fundamental difference between these Shoot the Moon Stock Picks and GameStop, which has lost almost 90% of its value over the last two weeks. Gamestop is a retailer who is struggling financially, losing sales and revenue and taking on debt to survive. Veritone, Nio, Zoom and Aphria are companies with increasing revenue that are investing in ways to keep up with high demand.
The Difference Between GameStop and Veritone, Nio, Zoom and Aphria.
Any investment that is promoted can be very popular today and completely out-of-favor quickly – unless there is a fundamental reason why this company and its products are rapidly increasing in sales and revenue. (This applies to real estate and other assets, as well.) During the Gamestop Short Squeeze, Brendan Kennedy, the Tilray CEO, discussed how the same tactic took his company’s share price to $300 on September 19, 2018, after which the stock dropped precipitously. Tilray’s stock was trading at $2.43/share in March 2020, and had been trading well under $40/share from May 2019 until yesterday.
Sometimes the promotion is an intentional pump-and-dump scheme. The promoter and/or his client already hold positions. They get a frenzy worked up on social media or through an online advertising or email campaign. As the stock soars, the insiders sell at the highest price possible, causing a knife-like drop in the share price and massive losses for those who purchased after the promotion. There were penny pot stock scams and pump-and-dump schemes galore in 2017 and 2018, leading up to Canada’s decriminalization of cannabis.
GameStop’s trajectory over the last few weeks bears the hallmark of a pump-and-dump scheme. Someone made a lot of money selling GameStop high. One thing the Reddit moderators weren’t telling their fans is that the only way you keep your gains is to sell high. Any reader who bought above $60/share and held the line has lost money. Some have lost quite a lot. Hopefully nobody gambled with their rent money.
Typically, this kind of share price manipulation occurs on the penny stocks that are trading off the boards. This is another educational tool that you need to be aware of because companies that are trading on the pink sheets carry exponentially higher risk than publicly traded companies.
How to Tell the Difference Between Great Companies and Promotional Advertising
If you want to invest in individual companies, then it pays to learn how to properly evaluate them. If not, since one person is buying and the other selling, then it is akin to you stepping on a tennis court to challenge Serena Williams to a game. Serena has spent quite a lot of time practicing her tennis. You don’t have a shot against her, just as your shot against professional traders is slim if you don’t know what you’re doing.
If you happen to know something they might have overlooked or haven’t factored in yet, that’s when you can find a Shoot the Moon stock. And, yes, that’s possible when you use the right tools and ask the right questions. Things always happen before they show up on an earnings report. The 10Q tells the story of what happened in the last quarter (trailing earnings).
Discovering something that wasn’t yet making headlines in the mainstream, using the tools outlined in my bestseller Put Your Money Where Your Heart Is (also known as You Vs. Wall Street in paperback) and taught at my Investor Educational Retreats, is what happened with each of the companies above. When you find one of these, and then Reddit or Motley Fool or Jim Cramer discovers what you already know and starts crowing from the rooftops about the investment, you’re the one riding the wave to the moon and benefiting from the promotion.
· Veritone had an edge in artificial intelligence with its facial recognition software. They were partnering with Oracle and Microsoft to get it to government agencies on the national and local levels. This company was first featured in February of 2020.
· Nio was selling electric vehicles in China – where there was a strong incentive for consumers to purchase EVs – for a lower price than Tesla. This company was identified in the October 2019 Investor Educational Retreat.
· Zoom was already a great videoconferencing company – beating out Facebook Live, Google’s Chat and Microsoft’s Skype – before the pandemic. Once the pandemic hit, Zoom became so popular that people started calling their videoconferences “Zooms.” This was a company I was happy to purchase at 1500 P/E in March of 2020.
· Aphria was making all of the right moves under the aegis of chairman and CEO Irwin Simon and board member Walter Robb. Simon was the founder and former CEO of Hain Celestial. Robb is the former co-CEO of Whole Foods. The recent cannabis decriminalization passed by the House, and the assumption that The MORE Act will pass in a Blue Senate, added fuel to a company that was already on fire. When the share price fell to $1.95/share in March of 2020, it became a massive buying opportunity.
How Can You Find Shoot the Moon Stocks?
I outline my bag of tricks in my bestseller, Put Your Money Where Your Heart Is (also known as You Vs. Wall Street in paperback). I teach these time-proven strategies in our Investor Educational Retreat, Stock Master Class and Options for Beginners courses. These are coming up within the next few weeks, and you get the best price when you register by Friday, Feb. 12, 2021. Call 310-430-2397 to learn more.
FYI: Put Your Money Where Your Heart Is was written in 2006. I leave the old-school examples in there because you can now see clearly the outcomes that I describe in the book. I was looking in the crystal ball, using data and my systems, to predict the future. It is easy now to see how accurate those predictions were, including that GM would go bankrupt, Google would shoot the moon, Apple’s iPhone would become the dominant smart phone, and Blackberry would slide into chaos. There’s even a picture of a Tesla Roadster in there – pre-Tesla IPO! However, at the time, it was very early in the process and the only way of seeing what would happen in the future was to employ a solid methodology.
Below are a few Cliff Notes to get started on the right path.
What Can the Company Do?
Start with the 3-Ingredient Recipe for Cooking Up Profits. Employ the Stock Report Card and ask the 4 Questions for Picking a Leader as tools to determine the Leader in the Industry. Clearly, you’re going to have to understand what the company does and who their customer is. Once you find a clear winner, ask, “Is this company trading for a good price? Is now a good time to purchase, or should I place this on my Stock Shopping List?”
Knowing which stocks are hot and having a Stock Shopping List can make it easier if the markets tank and everything goes on sale. You’ll still want to refresh the Stock Report Card and polish up your data-based Crystal Ball before diving into the purchase. You should always do the same thing before hitting the sell button.
What Can the Industry Do?
Can the industry thrive in an environment of high debt, over-leverage, financial instability and high unemployment? Real estate, the auto industry, the airline industry, retail, casinos, travel, hospitality, oil companies and more typically lose revenue when the economy is in trouble.
What Will the Market Do?
“The only time in history going back to 1881 when [stock prices] have been higher are, A: 1929 and B: 2000. We are at a high level, and its concerning. People should be cautious now.” Robert Shiller, Nobel Prize winning economist and Yale professor of economics. Are you paying $50 for your grande latte? Learn more in my blog.
The markets are high. However, they are being fueled by stimulus checks, Millennial and Gen Z interest and the GDP recovery of the 2nd half of last year. All of this could help Shoot the Moon Stocks (that are not already soaring at interstellar heights) between now and the end of the Spring Rally (which is a pretty reliable Wall Street phenomenon). The Crystal Ball becomes less clear for what happens at the end of April when the 1st quarter 2021 GDP is announced.
Join me for my Free Shoot the Moon Investing Videoconference on Thursday at 5 pm PT (8 pm ET). Email info@NataliePace.com with VIDEOCON in the subject line for logon instructions.
Other Blogs of Interest
2021 Crystal Ball.
Would You Pay $50 for a Cafe Latte? Is Your Tesla Stock Overpriced?
Can Medmen Avoid Bankruptcy?
Bitcoin is Back, Baby!
Real Estate Prices are Going Up. And Down.
Movie Theaters are in Trouble
Airbnb Should Have a Spectacular IPO Today.
Cannabis is Decriminalized. Stocks Triple.
Airbnb's IPO. Should Hosts Invest?
Gifts Under $5 and Free.
Thanksgiving in a Pandemic. The Sustainability Silver Lining.
Secretary Mnuchin Halts Bailouts
Money Stress Killed My Friend
Real Estate and Housing 2021. Challenges & Opportunities
Real Estate in a Pandemic. Interview with Mike Fratantoni, the Chief Economist of the Mortgage Bankers Association.
Bonds are Illiquid & Negative-Yielding.
Annual Rebalancing is a Buy Low, Sell High Plan on Auto-Pilot.
5 Red Flags of a Financial Implosion
Will Regeneron Be Approved Before the Election?
Tesla Will Have an Outstanding Earnings Report
Should You Wait Until After the Election to Fix Your Wealth Plan?
The October Surprise
Is Your Bank a Junk Bond
Do Stocks Fare Better Under Democrats or Republicans?
Put Your Money Where Your Heart Is.
Crystal Ball for the Remainder of 2020 (Including the Election).
Microcap Gaming Company Doubles 2Q 2020 Revenue.
Apple & Tesla Stock Splits.
Schwab's Chief Fixed Income Strategist on What's Safe.
China's Tesla (Nio). 2Q Sales Soar.
Why Are You Still Renting? (Errr. There is More Than This to Consider!)
MedMen's Turnaround Plan Attracts A-List Board Members.
Wealth Myths That Keep You Poor. Prosperity Truths That Make You Rich.
Protecting Your Wealth and Home in a Recession.
Technology and Silver are Golden.
The Economy Contracts 32.9% in the 2nd Quarter of 2020.
Real Estate: Feeling Equity Rich? Make Sure That Feeling Isn't Fleeting.
Airline Revenue Plunges 86%.
10 Questions for College Success
Bank Earnings Season. Crimes. Cronyism. Speculation.
Real Estate Solutions for a Post-Pandemic World.
Copper and Chile Update.
Gold Soars. Some Gold Funds Tank.
Will the Facebook Ad Boycott De-FANG Stocks?
Why Did My Cannabis Stock Go Down?
Which Countries Are Hot in a Global Pandemic?
Is Your Financial Advisor Good at Navigating Stormy Seas?
$10 Avocados, Lies, Damn Lies, Statistics & Wall Street Secrets.
It's Never a Crash.
Work From Home and Intergenerational Housing.
Biotech Races for a Coronavirus Cure.
Are You Worried About Money?
May is a Good Time for Rebalancing.
Is FDIC-Insured Cash at Risk of a Bank Bail-in Plan?
Why Did my Bonds Lose Money?
Recession Proof Your Life. Free Videocon Monday, May 10, 2020.
The Recession will be Announced on July 30, 2020.
Apple Reports Terrible Earnings.
We Are in a Recession.
Unemployment, Rising Stocks. What's Going On?
8 Money Myths, Money Pits, Scams and Conspiracy Theories.
21st Century Solutions for Protecting Your Home, Nest Egg & Job.
Wall Street Insiders are Selling Like There is No Tomorrow.
Why Are My Bonds Losing Money?
Tomorrow is Going to be Another Tough Day.
Price Matters. Stock Prices are Still Too High.
Should You Ride Things Out?
7 Recession Indicators
Corona Virus Update.
The Bank Bail-in Plan on Your Dime.
NASDAQ is Up 6X.
CoronaVirus: Which Companies and Countries Will be Most Impacted.
Is Tesla Worth GM and Ford Combined.
Artificial Intelligence is on Fire. Is it Time to Buy S'More?
Take the Retirement Challenge.
2020 Investor IQ Test.
Answers to the 2020 Investor IQ Test.
The Cannabis Capital Crunch and Stock Meltdown.
Does Your Commute Pollute More Than Planes?
Are Health Care Costs Killing Your Budget?
2020 Crystal Ball.
The Benefits of Living Green. Featuring H.R.H. The Prince of Wales' Twin Eco Communities.
What Love, Time and Charity Have to do with our Commonwealth. Interview with MacArthur Genius Award Winner Kevin Murphy.
Unicorns Yesterday. Fairy Tales Today. IPO Losses Top $100 Billion.
Please note: Natalie Pace does not act or operate like a broker. She reports on financial news, and is one of the most trusted sources of financial literacy, education and forensic analysis in the world. Natalie Pace educates and informs individual investors to give investors a competitive edge in their personal decision-making. Any publicly traded companies or funds mentioned by Natalie Pace are not intended to be buy or sell recommendations.
ALWAYS do your research and consult an experienced, reputable financial professional before buying or selling any security, and consider your long-term goals and strategies. Investors should NOT be all in on any asset class or individual stocks. Your retirement plan should reflect a diversified strategy, which has been designed with the assistance of a financial professional who is familiar with your goals, risk tolerance, tax needs and more. The "trading" portion of your portfolio should be a very small part of your investment strategy, and the amount of money you invest into individual companies should never be greater than your experience, wisdom, knowledge and patience.
Information has been obtained from sources believed to be reliable. However, NataliePace.com does not warrant its completeness or accuracy. Opinions constitute our judgment as of the date of this publication and are subject to change without notice. This material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. Securities, financial instruments or strategies mentioned herein may not be suitable for all investors.
About Natalie Pace
Natalie Wynne Pace is an Advocate for Sustainability, Financial Literacy & Women's Empowerment. She has been ranked as a No. 1 stock picker, above over 835 A-list pundits, by an independent tracking agency (TipsTraders). The ABCs of Money remained at or near the #1 Investing Basics e-book on Amazon for over 3 years (in its vertical), with over 120,000 downloads and a mean 5-star ranking. The 4th edition of The ABCs of Money was released on October 17, 2020.
Natalie Pace's easy as a pie chart nest egg strategies earned gains in the last two recessions and have outperformed the bull markets in between. That is why her Investor Educational Retreats, books and private coaching are enthusiastically recommended by Nobel Prize winning economist Gary S. Becker, TD AMERITRADE chairman Joe Moglia, Kay Koplovitz and many Main Street investors who have transformed their lives using her Thrive Budget and investing strategies. Click to view a video testimonial from Nilo Bolden.
Natalie Pace is the co-creator of the Earth Gratitude Project and the author of The ABCs of Money, The ABCs of Money for College, The Gratitude Game and Put Your Money Where Your Heart Is. She blogs on Huffington Post and Medium, and is a frequent guest contributor to national news shows and magazines. She has been ranked the No. 1 stock picker, above over 830 A-list pundits, by an independent tracking agency, and has been saving homes and nest eggs since 1999.