Finding the Best Plays for Your Aggressive Investments
The seismic shift in how investors are trading could mean enormous profits for those willing to take on the risk.
For the last year, the market has been getting absolutely flooded with new investors that have never traded a single stock before.
A record 10 million new brokerage accounts were opened by individuals in 2020.
And the horde of retail investors have been pumping and incredible amount of money into the market.
Average daily equities trading volume increased from 7 billion in 2019 to nearly 11 billion in 2020. So far in 2021, daily volume has continued to explode up to 14.7 billion. That’s more than twice the amount of shares changing hands every day than just two years ago.
The influx of novice investors has given even some of the most speculative stocks out there huge boosts.
With little to no trading experience, many of the new wave of retail investors are throwing their money at speculative plays, hoping for moonshot profits.
And while it certainly shouldn’t be the core of your investment strategy, there’s nothing wrong with taking a small amount of your investment capital and making a few aggressive investments.
So, if you’ve got some money you’re looking to put to work in high-risk, high-reward plays, here are a few of my favorites.
Where’s the money?
The incredible power of retail investors has been on full display this year.
The orchestrated buying of GameStop Corp. (GME) and AMC Entertainment Holdings, Inc. (AMC) – among others – to force short squeezes was a wakeup call for Wall Street that retail investors are now major players in the market.
We’ve even seen stocks with very little in the way of fundamentals that could justify their current prices continue to climb.
Famed analyst Jim Cramer called this “the most speculative market I’ve ever seen.”
But as we’ve discussed before, the only driver that really matters is the supply vs. demand curve. More aggressive buyers mean the price goes higher.
So many of these new retail investors aren’t buying stocks because of any sort of technical or fundamental reason. They just like the stock – often because of flashy headlines.
And I don’t believe the trend is going anywhere soon. So, if you’re looking to ride the momentum on some of the market’s most popular speculative names, here are my favorites…
How do I get some?
Timing is important when deciding to make a speculative play. It seems like the speculative names are a sale on every rally, so be careful about when you enter.
Staying on top of the news can be important in this sort of endeavor. Attention grabbing headlines can bring in a rush of speculative money.
Take, for example, Virgin Galactic Holdings, Inc. (SPCE) which exploded as much as 25% yesterday after news of a new test flight for its Eve aircraft was scheduled for Saturday.
Companies in emerging markets can also provide big profits for those willing to roll the dice. One of my favorites is Jumia Technologies AG (JMIA) – an e-commerce platform that connects sellers and buyers in some of Africa’s largest markets. This is actually a name that has shown up a lot in S.C.A.N. for heavy buying activity over the last few months.
New technologies is another place I love to look for big profit opportunities. Vuzix Corporation (VUZI) is a leading maker of smart display werable technology (think “smart glasses”). Again, this is a name that continues to hit my scanners time and again with huge buy orders.
I like each of these three stocks, but not right now as each has surged recently. If you’re looking to put your money into any of all of them, wait for the pullback.
The Wave of Money in the Market is Yours for the Taking
There’s no doubt that trading today is far different from years past.
With the influx of mostly young, novice traders – about 72 million millennials in the United States alone – there’s over $11 million dollars up for grabs every second of every day.
Courtesy of all of that speculative money floating around the market, massive profit opportunities abound. That kind of insane buying power is creating the kind of surges rarely seen before.
And world-renowned trader Tom Gentile assembled a team of actual rocket scientists to develop an algorithm – codenamed BRUTUS – to identify the biggest surges in the market, before they happen.
Tom is then able to use that intel to plot quick, decisive strike trades that result in huge profits.
In the Spotlight: Why Buy the Oats…?
Alternatives to animal products like plant-based meat and milk have been all the rage the past few years.
And one company just made a big splash on Wall Street this week.
We’ve already seen the massive moves that plant-based meat producer Beyond Meat, Inc. (BYND) has experienced since it came onto the scene in 2019.
But now there’s another company offering an alternative to traditionally animal products that could deliver its investors similar profits.
Oatly Group (OTLY) – makers of Oatly oat milk – made its IPO yesterday and raised more than $1.4 billion.
Shares of OTLY were offered at $17 per share before climbing to $22.12 at the open yesterday.
Oatly CEO Tony Petersson told reporters that the newly raised funds would help build out the company’s production capacity in the three continents in which it currently operates.
While I remain wary of IPOs that boom immediately, this is a company that I’ll be keeping an eye on for any good buying opportunities.