Ride this Tidal Wave of Cash
Wednesday, March 29, 2006 | Wayne Mulligan
There is a wave of money on its way to the US - Do you see it coming?
I see powerful clouds on the horizon. I see a tremendous storm brewing in the Middle Kingdom … right this very minute!
And this storm, my friend, will cause a TIDAL WAVE of money to flow into the United States (and hopefully into your pockets) over the next 3 years.
For those of us who have the foresight to see this storm coming, this could spell one of the biggest windfalls for investors since the LBO craze of the 80's, or the DotCom days of the 90's.
If you can see the wave coming, then all I have to say is …
Surf's up!
If you don't see the wave coming just yet, let me tell you what you should be looking for:
For starters, I'll ask you an easy question: What is the hottest emerging consumer market on the planet?
If you've picked up a financial journal anytime over the last 18 months you know as well as I do that the answer is China.
Now, the second question we need to ask is: What will be the hottest growth sector over the next 5 years?
The writing is on the wall my friend - mobile devices are becoming the standard for instant communication, media and entertainment. Wireless is on the tip of every savvy investor's tongue.
The Technologies Making this Happen
There a number of factors contributing to the Wireless Wave.
- Convergence of technologies
People have been talking about 3G wireless for the last 5 years, but we're finally seeing this vision come to fruition. Just the other day I used the Verizon VCast service to download a few games while I was on a train heading out of town. The next day I downloaded some short video clips while I was bored in my hotel room.
These aren't things we see in Star Trek movies anymore … they're happening right now!
- Component Prices are Falling
We're seeing a repeat of what happened with the Personal Computer in the 1980's. The prices for the hardware that will power the next generation of mobile phones and devices are dropping dramatically. Companies are using new, innovative and inexpensive technologies to give their users the ability to interact with their mobile phones the same way they would interact with a computer.
I can now listen to my music, get calls, keep track of my appointments, send e-mail and take pictures all on my Treo SmartPhone (and it's not costing me thousands of dollars either). You can pick up one of these phones for a few hundred bucks.
The only question most investors have is, "Where should we be placing our bets?"
1 1 = 10
For me, this is a NO BRAINER. First we identify the hottest growth market on Earth. Then we find the fastest growth sector in technology today.
We combine the two and we have the Chinese Wireless industry.
Right now there are over 400 million mobile phone users in China. That's right, I said 400 MILLION! That's almost 100 million more people than we have the US altogether! And the market is still growing!
AND the Government is smart enough to see how beneficial this new wave of technology could be for the domestic economy, and they're doing everything they can to help these wireless companies out. From Government subsidies to directly infusing capital into many of these companies, the Chinese Government is "here to help."
The timing, the technology, the current economic environment … it doesn't get much better than this for a technology investor.
There are Chinese companies right now, trading on the NYSE and/or the Nasdaq, that are grossly undervalued. They are so low on most investors' radar screens that you have the opportunity to jump on your surf board and ride the biggest wave in wealth creation that you've ever seen - BEFORE the rest of Wall Street gets in on the action!
I've already talked about one of these companies with you, China Mobile (NYSE: CHL). The stock is already up 7% since I wrote about it.
CHL is the strongest wireless connectivity provider and a terrific investment, but there are also countless sub-sectors in the wireless space that deserve a closer look.
We can choose from Wireless Gaming companies all the way down to the companies that make the chips that will be used in the new handsets.
You Don't Have to be a Genius to Make a Little Money
Here is a sector that I like to equate to a river. We'll get really creative and call it the Wireless River.
When the river rises, all of the boats in that river will rise with it.
Basically, you don't even have to pick the best-of-the-best stocks in order to make a little money in this sector. My feeling is you'll make decent returns by just buying into Chinese wireless companies in general. It's kind of like shooting fish in a barrel - it's just that many of the fish might not be all that big.
If you want to take it beyond a few easy winners, to the point where you'll actually be changing your net worth …
If you want to change your life for the better over the next 3 years …
If you want to be standing on the dock with a 100-pounder posing for bragging photos …
Then you've got to be extremely selective in the stocks you pick.
I've already identified a number of such opportunities, and if you're a Tech Stock Insider member, then be prepared for the ride of your life.
SURF'S UP!
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Wayne Mulligan
Chief Investment Officer
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