Dear fellow investor,
Let me take a moment to address the elephant in the room:
The bad news about the stock market is coming thick and fast…
And if your portfolio looks anything like mine, it’s been an incredibly painful year so far.
And just for the record… I’m down more than
29%.
So, if the stock market is the LAST thing you want to think about today — and I wouldn’t blame you — please feel free skip this new research altogether.
However, if you are interested in the proprietary research that points to what could be a rare
buying opportunity, I think you’ll find the information below incredibly valuable.
In fact, I think what follows has the potential to end up being the single most lucrative communication you ever read from us here at The Motley Fool.
For reasons I’ll explain in detail below, we currently believe that a once-in-a-decade “10X Sweet Spot” indicator recently began flashing.
A 10X beacon that hasn’t lit up our radar so brightly since all the way back in 2009.
If you were able to attend our special
10X Turnaround Briefing, you already have a good idea of what I’m referring to.
If you weren’t able to attend, you’re probably wondering how that’s even possible. Let me explain…
You see, when it comes to
pinpointing 10X stocks, our team has a remarkable track record.
And even with the recent losses, The Motley Fool has still racked up some pretty impressive wins over the years. For example…
Our CEO and co-founder Tom Gardner’s “turnaround” recommendation in Sherwin-Williams resulted in
+1,700% gains for bold members who followed along.
And here’s the thing…
Chart refers to U.S. market.
Tom issued his “BUY” alert in the turmoil of the global financial crisis of 2008…. after the stock had dropped over
23%
In Tom’s own words at the time, Sherwin-Williams was a “beaten-down-yet-not-out” home improvement company.
Well… If you’d invested at the time, that
+1,700% return would have been enough to turn a $20,000 investment into over
$350,000 today!
Or take Cintas, the largest provider of rental uniforms and other garb for millions of workers around the globe, from casino dealers to grocery clerks….
Chart refers to U.S. market.
Cintas stock had dropped a whopping
49% when in December of 2008 Tom jumped on the stock.
That contrarian approach, smack-dab in the middle of a financial crisis, once again resulted in a remarkable return…
A whopping
+1,900% gain that would have turned every $20,000 invested into
over $400,000 today!
Of course, not all picks perform as well — nothing in the stock market is guaranteed, and any potential 10X stock can go on to become a loser. But let me share just one more example of a 10X turnaround winner The Motley Fool recommended when almost everyone else had written the stock off completely because…
Booking.com, or Priceline at the time, had an even more profitable turnaround.
You see, the company had lost a staggering
97% of its value in the aftermath of the dot-com bust…
Chart refers to U.S. market.
By 2004 many people had written the company off entirely. Only four analysts were following the company’s earnings closely.
But we saw the company was turning things around and alerted members to the buying opportunity…
In 2006, Priceline merged with Booking to create Booking.com, a brand that’s since changed the course of online travel history, rewarding opportunistic investors with a
+8,000% return.
That’s not just 10X or 20X but over
80X your money… so a $20,000 investment at the time would be worth a small fortune of
over $1.7 million today!
So, if you’re in the same boat as me and so many Foolish investors like us, and your portfolio has also taken a bad hit in recent months… I think you will find our team’s 10X Turnaround Game Plan
very interesting.
For one simple reason:
Our latest internal research on 10X stocks, commissioned by Tom Gardner himself, uncovered the
specific market conditions when stocks that delivered at least 10X returns appear at nearly five-fold the normal rate!
We call these rare moments “10X sweet spots” here at The Fool.
They allow bold investors to snatch up some of the highest-upside businesses at a 20%-50% discount…
And set themselves up to potentially make a fortune in the process.
And given the current volatile market conditions, we might be smack-dab in the middle of a “10X sweet spot” right now!
These buying opportunities are rare and extremely time-sensitive.
In fact, with every day you wait to act, the window to capitalize on this “10X sweet spot” could be getting smaller and smaller.
And here’s the thing…
In a market that is being whipped around as violently as this one by war in Europe, the tech meltdown, anxiety about inflation and further interest rate hikes…
I don’t blame anyone who’s looking at their portfolio and is thinking about cutting their losses.
However…
Arguably some of the world’s smartest investors agree that NOW could be a huge
buying opportunity.
Warren Buffett famously said, “
Be greedy when others are fearful.”
Billionaire Carl Icahn said his entire investing philosophy is generally to “
buy something when no one wants it.”
And Tom Gardner himself said that when volatility is here, “
it’s time to take advantage of it.”
And as it turns out, our proprietary 10X research concurs.
In fact, we could be smack-dab in the middle of a “10X sweet spot.”
So, while many investors are looking at the stock market meltdown through a lens of fear… We see it as an incredible
opportunity.
Not because we’re blindly optimistic.
And not because the recent losses don’t hurt — they do.
But because we’ve seen this happen before.
Specifically, the dot-com bubble in the early 2000s and the financial crisis of 2008. And while it doesn’t happen often — only a couple of times in the last two decades that we’ve identified…
You see, Tom Gardner, our CEO and co-founder, wanted to know everything there is to know about 10X stocks, their specific characteristics, and maybe most importantly WHEN they appear in the market.
So, we plotted the rate at which 10X stocks appeared over time, from 1995 to 2010.
Chart refers to U.S. market.
The higher up a dot is on the chart, the higher the percentage of stocks that returned 10X at that particular time.
Our data showed the standard rate of 10X creation was 1.8%.
Meaning just 1.8 in 100 public U.S. stocks, on average, went on to 10X over the time period shown.
Now, 1.8% is the average.
But do you notice the spikes?
You can clearly see the rate jumped up after the dot-com bust in the early 2000s — the 10-bagger rate jumped as high as 4%.
Chart refers to U.S. market.
You don’t need to be a mathematician to realize that’s
more than twice the standard 1.8% 10X rate that our research here at the Fool uncovered.
And we saw the same thing happen again in the aftermath of the financial crisis of 2008.
Chart refers to U.S. market.
Except this time the 10X rate even reached an apex of nearly 8.5%.
Now, here’s what’s incredibly important to keep in mind:
The average rate of 10-bagger stocks is only 1.8%.
But each time we have one of these volatile times in the aftermath of a market drop, a 10X “opportunity window” appears to follow.
These are what we like to call
“10X Sweet Spots.”
Simply put, a “10X Sweet Spot” is a specific time window in the aftermath of a market crash when the rate of stocks with 10X potential skyrockets to extraordinary levels.
During the first sweet spot after the dot-com bubble burst, the 10-bagger rate was
DOUBLE the average rate.
During the sweet spot after the financial crisis, it was almost
FIVE times the average rate.
Chart refers to U.S. market.
And with the latest tech meltdown, everything we’re seeing points to the fact that we could be smack dab in the middle of the next “10X sweet spot!”
What’s more, we’re seeing more potential 10X turnaround opportunities in the market now than maybe ever before!
In fact, as Bloomberg reported, the number of Nasdaq stocks down 50% or more is almost at a record.
So, whatever the fundamental and macro considerations may be, there is no doubt that many
investors have been selling first and trying to figure out the rest later.
But as we’ve seen, the beauty of a market correction is it creates
incredible deals on high-quality stocks and businesses with 10-bagger potential.
Which means there may be dozens of potential 10X turnaround opportunities similar to the ones The Motley Fool capitalized on with Sherwin-Williams, Cintas, or Booking in the market right now.
I’ll admit it takes some guts to invest in these potential 10-baggers while the market is in turmoil.
After all — Peter Lynch who ran the best-performing mutual fund in the world said that “
volatility… is a great opportunity,” while adding that “
in the stock market, the most important organ is the stomach, not the brain.”
That’s certainly been true this year so far — especially while the financial media fuels the fire by publishing new headlines every day, which really pushes fear-based, short-term thinking.
But remember: The other option is to potentially miss out on some of the highest-upside businesses in the world —
while they’re on sale.
On the other hand, imagine coming home from work one day and telling your spouse, “Guess what — another one of our stocks is up 10X…”
Imagine the look on their face when they realize you were the only “genius” who somehow knew that stock was about to turn around deliver those kinds of gains over the coming years.
And we’ve already seen that snatching up turnaround winners while they’re on sale, can
really pay off for opportunistic, long-term investors.
Especially during 10X sweet spots like the data suggests we’re in now. Remember, we’ve seen it before…
Remember Booking Holdings, or Priceline at the time — the company had lost a staggering
97% of its value in the aftermath of the dot-com bust.…
Chart refers to U.S. market.
…only to turn around and change the course of online travel history, rewarding opportunistic investors with a
+8,000% return!
The question is…
How do you know WHICH companies will bounce back and become 10X turnaround winners from here?
Of course, during the dot-com bust, as you may remember, some companies imploded
spectacularly. And rightfully so…
Pets.com went from IPO to liquidation in just 268 days, due to its expenses far exceeding revenues.
Or take WebVan’s home delivered grocery service — another poster child for failed dot-coms.
But at the same time, some great businesses got
overly punished, too…
At one point, Amazon lost more than 90% of its value — but long-term investors still got rich.
Case in point, The Motley Fool recommended Amazon in 2002… for a staggering
+14,000% return.
Chart refers to U.S. market.
Which if you’d invested at the time is enough to turn a single $20,000 investment into
over $2.8 million dollars.
So, how do you separate the losers that will only crash and burn from here…
…from the 10x turnaround winners that could propel a portfolio to the next level?
In fact, you might be wondering whether hunting for 10X stocks is simply
too risky anyway…
And look, I know you know this, but I want to be very clear and say it anyway: yes, of course, if you’re looking for 10X returns you’re going to see more volatility.
Which is why it’s so important to not just buy one or two stocks, but
at least 25 stocks… and hold them for
at least 5 years.
That way, if you have 10 stocks with the same amount of money — say $1,000 — invested across them, and nine of those stocks go to zero (which is highly unlikely, of course) and
just one stock goes up 10X, you’ve already broken even.
Chart refers to U.S. market.
So, in this unlikely scenario, despite the literal worst-case scenario with 90% of your original investments, you’re still at your original $10,000 investment.
And as we clearly saw from previous “10X sweet spots,” when 10-bagger stocks emerged at an almost 5-fold higher rate, right now the odds could be in our favor.
What I can tell you right now:
The 10X turnaround winners we’ll see from here almost certainly won’t be Booking, Amazon, Sherwin-Williams or any one of the well-known 10X turnaround winners I shared so far. Here’s why…
They’re simply too big now!
Booking.com, which was “on sale” by as much as 97%, is now a massive US$82 billion company.
Sherwin-Williams, which had dipped more than 23% when Tom and his team recommended it, is now a US$71 billion giant.
And of course, Amazon, despite the recent pullback, is still a massive trillion-US-dollar company.
The businesses that are “on sale” now that are the most likely to 10X from here are much smaller, largely unknown stocks.
As our internal research show, THIS is the one trait that makes a stock among the most likely to 10X… without taking on unnecessary risk!
In fact, this is another insight from our proprietary 10X research, and to my knowledge, we’ve never shared this with members before…
The
ONE trait that makes a stock among the most likely to 10X…
without taking on unnecessary risk… is its market cap.
You see, we looked at what SIZE of companies that are the most likely to 10X… while at the same time reducing the risk of basically going bust. And what we found is very clear.
Just take a look at this chart:
Chart refers to U.S. market.
What it says is simply that companies between US$100 million and US$2.5 billion in market cap offer what we consider to be the best risk-return tradeoff when we’re looking for 10X returns.
In other words…
Companies smaller than US$100 million are too risky.
Companies bigger than US$2.5 billion are less likely to 10X.
Companies worth between US$100 million and US$2.5 billion offer the best tradeoff between risk and returns.
And what’s interesting is when you look at our historical 10-baggers, many of them fall
exactly into this group.
For example, Booking Holdings was just a US$894 million company when we alerted members to BUY after the dip… and it went on to deliver that life-changing 85X return.
Of course, that’s just one indicator… And we’re not dismissing larger companies either if all the other factors point to it being a SCREAMING buy. It’s simply one of the useful guidelines we use as we’re evaluating potential 10X opportunities.
So, considering that the “10X sweet spot” we’re seeing in the market right now, with an almost record number of potential 10-baggers “on sale” the question remains…
exactly which ones should YOU buy?
Because the fact remains that, regardless of whether we’re in a sweet spot or not, picking stocks with 10X potential is still
incredibly difficult.
And unless you know what you’re doing — or have somebody who knows exactly what they’re doing to help you out — you’re more likely to lose your house than you are to strike it rich.
Which is why I’m excited to announce today that our team is launching a brand-new 10X investing game plan to help bold members navigate this volatile market…
And we’re making the announcement today for a very specific reason.
Given the “10X sweet spot” we believe we’re in RIGHT NOW, we don’t want any of our members to miss the chance to capitalize on this compelling investment opportunity.
Introducing… “10X Turnaround: 5 Top Stocks With 10X Potential from Here” — an exclusive new stock report from The Motley Fool!
What you’ll discover inside are some of our top stocks they believe have the potential to deliver
at least 10X returns over the next 10 years from their current price level.
And because we’re likely smack-dab in the middle of a 10X sweet spot…
You should know that we’re also specifically targeting some 10X turnaround opportunities. That is, 10X contenders that have lost some ground from their highs.
Obviously, we aren’t trying to catch falling daggers here.
We’re looking for good, strong companies that deserved to be where they were in the first place and are getting overly dinged for what we consider a short-term setback — not a fundamental long-term flaw with their business.
While not all companies fall into this category, we are in fact targeting businesses that are long-term, proven,
attractive growth companies that are now available
at much better prices.
And of course, at least
10X upside potential.
Which is why we’re also targeting companies in the US$100 million to US$2.5 billion market cap which, as we’ve seen, provide what we consider optimal risk-reward tradeoff.
In fact, Tom and a veritable army of analysts have spent months rigidly honing their 10X investment philosophy, until they emerged with what they consider the key “4 Drivers of 10X Success.”
Let’s quickly walk through them…
10X Driver No. 1:
CEO Vision
With Tom Gardner at the helm, The Motley Fool has an advantage shared by very few other 10X investors on the face of the earth…
He’s not merely evaluating stocks with the potential to 10X — as the CEO of The Motley Fool, he’s also running his very own 10-figure business on a day-to-day basis!
Meaning Tom can stare CEOs right in the eyes and ask exactly the right questions to discern whether they’re working harder to grow investors’ wealth than they ever had to work to get it in the first place.
Tom believes a CEO with proper skin in the game is THE key to determining whether stocks have what it takes to skyrocket up 10X or more.
And after more than a quarter-century as a businessman and professional investor, he’s pretty good at identifying them.
10X Driver No. 2:
Size of Market and Optionality
How big could this company reasonably become if it achieved 100% of its marketplace?
It’s a question so few investors ask themselves, despite being perhaps the single most important question you can ask.
There’s a reason that every single one of the biggest companies in the world runs a business that basically everybody needs.
Apple sells smartphones.
Amazon lets you buy stuff on the internet.
Alphabet’s Google makes it possible for you to search the internet at all.
These “market opportunities” are essentially limitless… which is a big reason why those companies have created countless fortunes for investors over the decades.
With our
10X Turnaround report we’re potentially targeting companies that are the next version of the ones you see above…
Companies with potential markets so big they make your eyes water. And have the optionality in their business to reach that addressable market in many different ways, which gives us as investors many different ways to win.
10X Driver No. 3:
Growth Rate Potential
Quite simply, we’re not just looking for large markets… but
growing markets.
And I just want to highlight one example here, which is our Chipotle recommendation back in 2008.
Tom Gardner recommended the stock in his original small-cap U.S. newsletter,
Hidden Gems.
Chart refers to U.S. market.
The fast-casual food industry was only just getting started… but growing fast. And as we realized early on, Chipotle itself was growing
even faster.
But then, the company took massive short-term hits. What happened? The stock had dropped after disease outbreaks in the pork or chicken industries…
…even though Chipotle itself was as diligent as anyone about its product sourcing.
And while the outbreaks made front-page news for a week or two, when you’re a truly great company, it means little to nothing over the long term.
In fact, we doubled down and issued another buy alert in 2017.
The stock bounced-back…and members who stuck with our guidance from the start cashed in on a
+900% return.
Which brings me to…
10X Driver No. 4:
Product Execution
To put it simply, we’re looking for businesses with a competitive advantage.
Are you executing on your product (or service) at the highest possible level? And does your product distinguish itself from other products in the exact same space?
If the answer is no… we’re going to have to do a double take on evaluating a company’s 10X potential.
Now, just to be clear,
not every recommendation inside our new
10X Turnaround report is going to have
all four 10X drivers.
Two is solid. Three is even better. All four AND you can snatch it up at a discount? That’s when you
really want to be opportunistic.
What’s more — in addition to our new 10X Turnaround report…
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