Today, I’m talking about the growing space known as Consumer Digital. The name implies exactly what you might imagine. I’m talking about the companies that are consumer facing and have evolved from digital pioneers into digital juggernauts.
Source: GTM Plus
The graphs above and below show that ecommerce at the consumer level is exceeding even the expectations that were put upon it just a year ago, and these have plenty of upside.
As the graph below shows, there’s still plenty of growth opportunities for e-commerce companies. Also, bear in mind that the graph is pre-pandemic, and that turbocharged the transition from brick and mortar to digital commerce.
This is why, after all the conflagration in the market this year, Amazon.com (NASDAQ: AMZN) is still trading at a PE of 101. Not only does it have one of the most dominant retail platforms in the world, but it also has Amazon Web Services (AWS), the biggest cloud provider in the world to keep all the retailers and wholesalers (and everyone else’s) digital operations humming along.
Because it’s not just buying stuff, it’s also the entire supply chain that gets that stuff to you in a day or two. That’s all powered by AWS or one of its competitors.
Speaking of competitors, Microsoft (NASDAQ: MSFT) and Alphabet (NASDAQ: GOOGL) are two of the top cloud providers, as well as having very dominant and successful digital consumer platforms and services. These companies continue to perform well, even during the difficult conditions encountered this year. Even including this year, their performance over time has made any current losses insignificant compared to their gains.
This is the heart of MegaTrends investing. It’s buying quality stocks that are parts of trends that will endure come what may in the short term. By having these stocks in your portfolio, it means you don’t have to worry about tops and bottoms, bull or bear markets.
The graph above shows you what the FAANG (Facebook, Apple, Amazon, Netflix, Google) stocks have done in the decade leading up to the pandemic.
They outperformed the S&P 500 by an order of magnitude, and they didn’t stop their run during the pandemic. It accelerated.
Not even the pandemic could slow these companies down.
While I have held most of these FAANG stocks for many years, I don’t own Meta (NASDAQ: FB). It fell off my chart quite a while ago, and it goes to show that my Trendsetter Strategy picked this one out in plenty of time.
The other great thing about my MegaTrend stocks is that they can take the good with the bad. The most recent example was during the pandemic. The market was hammered as the pandemic hit. My advice to subscribers: buy.
Why? Because the pandemic was a short-term event. Stocks were going to get hit in the short to intermediate term, but when they came back, my stocks would be leading the way.
That’s exactly what happened. It was these consumer digital companies, as well as the other sectors that I’m focused on, that rebounded first and were posting big gains by the end of the year.
I expect the same thing to happen this time around. The market is still waist-deep in uncertainty, so the pros are marking time by trading ups and downs for profits. I’m happy to let them. That’s what they get paid to do.
As an investor, I’m happy to hold the best stocks in the market and watch them make up ground in weeks, rather than quarters or years. Like I said, I don’t have to be chained to a computer looking for a bottom to get in because I know my MegaTrend picks will be the market leaders whenever the turn happens.
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