Why the “digitization of everything” is today’s most profitable investing opportunity

Why the “digitization of everything” is today’s most profitable investing opportunity

“What’s the most profitable investing opportunity right now?”

My colleague recently asked me this… He wanted to know what industry or sector I’m most excited about.

I didn’t answer the question how you might expect.

I didn’t say genomics… virtual reality (VR)… or the metaverse… even though I’m incredibly bullish on these spaces.

Instead, I talked about the megatrend of all megatrends.

It’s bigger than any single industry.

Because of this, you can’t bet on this theme by buying an ETF like you can with clean energy or cloud computing.

You must go hunting to identify the best stocks in this megatrend.

But it’s well worth putting in the extra effort.

Early pioneers of this megatrend have produced some of the biggest stock returns in history.

I’m talking potential hall of fame stocks like Amazon (AMZN)Netflix (NFLX), and DocuSign (DOCU).

These companies have much more in common than just being tech stocks.

They’re part of the “digitization of everything.”

Today, I’ll tell you why the digitization of everything is today’s biggest megatrend: and I’ll share one stock to watch...

  • In the simplest sense, the digitization of everything refers to how technology has upended the physical world.

Over the past 20 years, some of the world’s biggest, most important industries have “gone digital”… and this trend is only accelerating.

In fact, today you can do pretty much anything online…

One of the most obvious examples of this is shopping.

Twenty years ago, most people drove to their local mall or department store to shop for clothes. Now, many folks shop for their clothes online.

Of course, that was just the beginning.

These days, many of us no longer make trips to the supermarket. Instead, we get our groceries delivered directly to our doorstep.

Heck, we can now buy cars without ever setting foot inside a dealership!

The digitization of the shopping experience hasn’t just radically improved our lives. It’s also delivered monster returns to early investors.

Amazon (AMZN) has rallied an incredible 187,547% since its 1997 IPO.

Shopify (SHOP)—another online shopping powerhouse—has soared 4,693% since it went public in 2015.

And Carvana (CVNA)—a company that lets you buy a car using your smart phone– has surged 2,447% since it IPO’d in 2017.

These are the sort of returns that can jumpstart your retirement by years… even decades.

  • Of course, digitization hasn’t just revolutionized how we shop.

It’s greatly improved countless aspects of our lives, including how we watch movies and listen to music.

It’s transformed how we work, allowing myself and many others to work anywhere on the planet.

Digitization has even revolutionized how we find love. Today, many folks meet their significant others by simply swiping on their smartphones.

I could go on and on. But you get the picture.

Digitization companies made our lives more convenient. We couldn’t imagine going back to the way things used to be.

Of course, so much of our lives has already been digitized. And there are still a few aspects of our lives in the early innings of being digitized.

These largely untapped markets are where fortunes will be made in the coming years.

  • The digitization of everything is the mother of all megatrends.

This is, again, because digitization isn’t confined to a single industry.

It impacts all aspects of our lives.

Consider Zoom Video (ZM)—the global leader in telecommunication.

Thanks to Zoom, many companies have gone completely remote with their work forces. They no longer require their employees to come into the office.

Uber (UBER) completely reimagined how people get from Point A to Point B.

Thanks to this, Uber grew to become an $80 billion company before its shares even started trading on the US stock market.

We’ve even seen the digitization of money.

PayPal (PYPL) made it possible to send money to someone across the world with a few clicks of a computer mouse.

Today, this is the norm. But it was revolutionary when PayPal introduced the technology in 1999. Square (SQ)—which created the little white box that plugs into smartphones and swipes credit cards—also digitized payments. In the process, both companies have delivered huge returns to their shareholders. And they continue to climb today…

Square has skyrocketed 2,341% over the past five years, while PayPal has surged 684% over the same time frame.

Of course, we can’t forget to mention Bitcoin.

Bitcoin took the digitization of money one step further. Today, many people refer to Bitcoin as “digital gold.”

Early adopters of Bitcoin became rich beyond their wildest imagination. The cryptocurrency has soared an incredible 7,692% since 2014.

  • My IPO Insider subscribers have also been profiting off the digitization of everything.

In April 2020, we added DocuSign (DOCU) to our portfolio. DocuSign digitized the paperwork process. For example, it allows you to sign a lease without driving across town to see your landlord. It also lets lawyers sign legal documents without going to the courthouse.

DocuSign handed us a 167% gain in just 5 months.

We also played this megatrend with Livongo Health (LVGO), which digitized patient care.

Livongo allowed people with chronic health conditions to receive treatment without setting foot inside a doctor’s office.

Livongo skyrocketed more than 400% in just 9 months… before it merged with Teladoc (TDOC) last fall.

We also added a “boring business” back in June that’s quickly risen 73%...

I’m talking about Bill.com (BILL).

Bill.com is a software as a service (SaaS) company. In short, the company sells cloud-based software that helps simplify, digitize, and automate back-office financial processes.

It’s not a sexy business. But boring companies are often the best investments. Plus, Bill.com is a lifesaver for customers. A typical customer saves 36 business days a year using its software!

I expect Bill.com to be a leader in this space even if COVID-19 persists. This is because the digitization of tedious paperwork is essential for businesses in today’s “new normal.”

However, because of its recent runup, and the current market volatility, I recently recommended my IPO Insider readers HOLD this position. But it’s one to put on your watchlist, and consider buying on weakness.

Justin Spittler
Chief Trader, RiskHedge