It Pays to Invest in Companies With Solutions to Big Problems
With the market in its current state, the best thing you can do is find the stocks that will eventually lead it out of chaos. How do you do this?
First, find a problem. The bigger, the better.
The next step is to find the company or the industry that’s trying to solve that problem. Take plastic recycling, for example…
As environmental issues have increasingly become a concern in the U.S., the search for eco-friendly products and materials has inevitably followed. Last week, researchers announced the development of a breakthrough plastic compound.
Dubbed PDK (short for its chemical name, polydiketoenamine), this compound is supposed to be “endlessly recyclable.” If these claims are accurate — as published reports claim they are — PDK is a development worth keeping an eye on.
Finding Powerful Solutions
Now, keep in mind: It’s often years before successful lab projects are turned into products that businesses can sell … and I have no idea if PDK will be one of these products.However, this type of innovation points toward the kind of “big problem, powerful solution” that helps to identify tomorrow’s market leaders.
Companies such as Google and Walmart are prime examples of this. The former offered a faster and simpler search engine. The latter combatted high inflation of the 1970s. Both started in obscurity, but found better ways of doing things than their competitors — resulting in huge success.
Targeting Potential Winners
Companies that are able to solve big problems often become even bigger winners. Those that have strong solutions and good management to execute their business models make investors rich.
If you want to beat the chaos in the market, identify a big problem somewhere and start looking for companies with powerful solutions to solve it. Chances are, you’ll be on your way to finding a big winner in the stock market.
Jeff L. Yastine
Editor, Total Wealth Insider
I like to think of myself as a former financial journalist who not only interviewed many of the world’s top stock market experts, entrepreneurs and financiers, but also took their advice to heart in becoming a successful investor himself.