In today’s Money Morning…no need to feed the retail beast this year…small-caps are your chance at jet ski money…I’d encourage you to stick around for that…and more…
A good friend once said to me:
‘Money can’t buy happiness, but it can buy me a jet ski.’
Which in some strange way, makes a lot of sense.
I would after all, like a jet ski.
Which is why today, I’m going to reflect a bit on what money means going into the festive season.
While the market seesaws on virus news or a retail-led recovery, many get caught up in endless portfolio checking on their phone.
Consider setting a stop-loss and cancelling this behaviour for a bit.
And I’ll get to exactly why small-caps are such fertile ground for the shrewd investor in a moment.
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No need to feed the retail beast this year
First consider this though (emphasis added):
‘Money expresses all qualitative differences of things in terms of “how much?“ Money, with all its colorlessness and indifference, becomes the common denominator of all values; irreparably it hollows out the core of things, their individuality, their specific value, and their incomparability. All things float with equal specific gravity in the constantly moving stream of money. All things lie on the same level and differ from one another only in the size of the area which they cover.’
Now this somewhat obtuse quote is from Georg Simmel, one of my absolute favourites.
And you may wonder, why on Earth am I sharing this with you?
Well, when you think about buying a gift for someone, you go to the shops and ask yourself ‘how much?’
Simmel’s point here is that money is beautiful in its indifference.
But when buying a gift for your loved one you have to translate this inert thing (money) into a thing with feeling.
Which is why I’d caution against buying your loved ones anything too material.
Just once, just this year.
You see, we’d all like jet skis — but ultimately this doesn’t convey the feeling you want.
Lavish gifts demand more lavish gifts, it’s a vicious circle.
So, after this largely awful year I’d recommend writing a heartfelt note and not putting too much more money into the coffers of the retail beast.
By the way, retail will go on just fine without you, just read this snippet from the AFR:
‘Retail sales surged 7 per cent in November and are now 13.9 per cent higher than pre-COVID-19 levels following a strong Black Friday sales bump last month.
‘Preliminary seasonally adjusted data from the Australian Bureau of Statistics shows that the monthly rebound is the fourth biggest jump since the data series began in 1982. The three other biggest monthly jumps were either this year following big falls or in 2000 when the GST was introduced.’
Small-caps are your chance at jet ski money
Here’s how I think you can make jet ski money in the new year though…
A savvy approach to small-cap stocks is driven by long-term trends pushing money into sectors that the big funds are too close-minded to pay attention to.
This is how we delivered such a solid return for subscribers of Exponential Stock Investor.
And this isn’t needless self-aggrandisement — it’s about a viable strategy to secure long-term wealth.
Now, we were close to getting it wrong on a number of occasions. And we have gotten it wrong before. Case in point, we did not anticipate the China/Australia diplomatic crisis playing out like it has.
But we did successfully tip a company that does AI edge computing for things as diverse as spaceships, self-driving cars, and casino lounges.
It could have gone either way after the onset of the pandemic…
Or another one, a company that is working on graphene ink-based self-charging batteries.
You read that right, a battery that doesn’t need a cable.
This company was on a knife edge too.
But if you take the plunge on small-caps there’s a serious opportunity to be had.
The eternal appeal of small-caps is that you are pitting your wits against a short-sighted market.
Everyone and their dog can access the latest analyst briefings on CBA or BHP.
It takes something a bit more special though to navigate the treacherous waters of the most exciting companies on the ASX.
So, in the coming days you will hear a bit more from me about the year that has been for our service, and where we think the investment world is going in the next few years.
I’d encourage you to stick around for that and join us if you are serious about your investments.
Who knows, you might even land a jet ski!
Regards,
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Lachlann Tierney,
For Money Morning
PS: Four Well-Positioned Small-Cap Stocks — These innovative Aussie companies are well placed to capitalise on post-lockdown megatrends. Click here to learn more.
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