Yesterday, Wayne outlined the three things you need to know about market “disruption”:
- If you’re watching closely, you can identify where disruption will hit next
- When disruption occurs, the “incumbents” often lose
- But if you’re on the winning side, you can make a LOT of money
Today, I’m going to dive a little deeper…
Specifically, I’m going to use a real-world example to show you how anyone could have used those lessons to earn anywhere from 52% to 600,000% in profits.
It all starts by answering three simple questions…
Three Powerful Questions
The questions I’m referring to are based on the three lessons above...
All you need to do is take each one and flip it into a question—in other words:
- Which industry is being disrupted?
- Which companies will lose because of the disruption?
- And which companies will win?
So you can see just how powerful this concept is, let’s walk through a real-world example.
Disruption in the Transportation Industry
A few years ago, a tiny start-up called Uber launched an ambitious experiment.
Starting with a single car, Uber claimed it could disrupt local taxi companies.
Basically, Uber lets you hail a ride with your smartphone. With just a few clicks on its app, a car and driver will be at your disposal within minutes.
And when you arrive at your destination, there’s no need to pull out your wallet: billing is handled automatically through its app.
Within a few short years, Uber fulfilled on its mission to conquer and disrupt local taxi companies—and in the process, it’s delivered extraordinary profits for its early investors. More on that in a minute…
But first let’s look at how you could have identified this company as a disruptor. To do so, let’s look at each of our key questions:
- Which industry is being disrupted? In this case, Uber aimed to take on the entire ride-hailing industry, from taxis to car services.
- What companies will lose because of the disruption? Taxi and car service companies in major markets around the world.
- And which companies will win? Uber had the first-mover advantage, and quickly started assembling a war-chest to win the market. It had all the signs of a winner.
Now, let’s walk through two different ways you could have used this information to make some smart investments.
Betting Against The Losers
While I prefer to bet on the winners (I’ll show you why in a moment), you could also make money by betting against the losers.
In the case of the ride-hailing industry, it’s the local taxi companies that were at risk of losing.
If you could find one that was publicly traded, you could “short it” (i.e., make a bet that its value would go down.)
But taxi companies aren’t publicly traded, so what could you have done?
Well, with a bit of research, you would have discovered a public company called Medallion Financial Corp. (NASDAQ: TAXI).
This company provides financing for drivers who want to purchase a taxi medallion.
You see, in most cities, you need a medallion to drive a taxi. And in places like San Francisco or New York City, those medallions cost upwards of $1 million each.
But since Uber came along, those medallions have been plummeting in value—and so has TAXI’s stock price.
If you’d shorted TAXI when Uber was just starting to take off, you’d be sitting on an estimated 52% gain right now.
52% isn’t a bad return…
But now let me tell you why I prefer betting on the winners.
Betting on The Winners
To raise its initial round of funding, Uber used an “equity crowdfunding” website called AngelList.
Equity crowdfunding is a new way of investing. It lets regular investors like you put money into high-growth start-ups at their earliest stages.
To make a long story short, if you’d used AngelList to invest in Uber just when it was starting to disrupt the taxi market (and back when its stock was still “cheap”), you could have made a fortune:
Even a small $1,000 investment would today be worth an estimated $6 million.
That’s a 600,000% ROI—all from understanding how disruption works and getting into the winners early.
The Next Industry...
The big returns for the ride-hailing market are over.
So tomorrow, we’ll tell you about the next industry that’s being disrupted.
This is a massive $174 billion market, and one of our country’s most important industries.
In fact, Fortune Magazine recently said that this one industry could “decide the 2016 [presidential] election...”
On tomorrow night’s live event, we’ll tell you all about this industry...
And then we’ll reveal the exciting start-up that’s on the cusp of disrupting it.
Just like Uber, it’s using equity crowdfunding to raise money from everyday investors like you.
And on our live seminar, you’ll learn how you could immediately claim a stake in it...
Before it conquers this massive $174 billion market...
And before it deliver gains of 300% to 4,300% to its early investors.
Again, the live (online) event takes place tomorrow—that’s Wednesday, October 5th—at 8 PM Eastern.
Don’t be late!
