Tue Apr 22 2014
Live Index (1446 articles)

Do You Exhibit Shark Behavior Like David Tepper?

Meet David Tepper, the world’s greatest investor.

He’s the Founder of Appaloosa Management, a hedge fund with roughly $ 20 billion under management. He also owns a chunk of the Pittsburgh Steelers.

While Tepper may look tame in photographs, make no mistake…

He’s a shark in the truest sense of the word.

Last year, Tepper annihilated his competition to the tune of 42% returns.

Over the last five years, he’s generated annualized gross returns as high as 50%.

In 2011, Tepper famously bought a $ 43.5-million beachfront mega mansion in the Hamptons – just so he could tear it down and build a bigger one.

That’s shark behavior!

I love reporting on the movement of sharks here at Wall Street Daily. So Tepper is someone I’ll be tracking closely throughout the year.

Tepper is presently bullish on U.S. stocks, and is especially bullish on the airline industry.

In fact, Tepper presently owns a massive position in United Airlines (UAL).

He doesn’t hesitate to make monster bets on technology, either.

Tepper previously made a killing on Apple (AAPL), and now owns roughly 236,709 shares of Google (GOOGL), having just added to the position.

But here’s the rub…

Tepper has very obviously recalibrated his trading strategy toward the lightning-quick adoption of new technologies.

Put simply, old rules no longer apply when it comes to tech investing.

You must exhibit shark behavior, which means striking fast.

Bottom line, to mimic the investment success that Tepper is having with technology companies, there’s one subtle nuance to realize.

Below is a “must see” video my staff just produced that perfectly captures this infinitely important subtlety.

Oh, and the video covers everything in less than four minutes.

Cheers to that!

Robert Williams,
Founder, Wall Street Daily

Transcript:

With technology advancing faster than ever, it’s absolutely essential that investors are able to distinguish between the truly disruptive, long-lasting technologies and ones that are just overhyped, passing fads.

And it’s important to do so early in order to maximize profits.

With the general population becoming more tech-savvy and demanding more disruptive technologies, the adaptation of new technologies is happening faster than ever.

Need proof? Just look at the graph, which shows the time it took for major disruptive technologies to gain mass adoption over the past century.

As you can see, technology was slow to catch on with the general public at the turn of the 20th century.

Take electricity, for example – one of the most disruptive technologies in American history. It took approximately 35 yearsjust to reach 70% saturation in U.S. households!

But as we move to newer technologies, like the refrigerator, you’ll notice that the adoption time shortens. It might not seem like it today, but at the time, the refrigerator was a truly disruptive technology. People no longer had to buy ice for their iceboxes. They just plugged in their new refrigerators, and they were set.

The U.S. ice trade was valued at $ 28 million at the time. When adjusted for inflation, that’s a $ 660-million industry, wiped out, as households no longer needed ice to keep food fresh. Not only that, but people were able to keep their food at a specific temperature, preventing diseases and saving millions of dollars in spoiled food. Yet this technology still took 25 years to reach 70% adoption.

Another example: color television. While it took a few years to catch on with the general public, you can see that as soon as it did, it happened much faster. It took approximately 15 years to reach 70% saturation in U.S. households.

Its fellow living room innovation – the VCR – took only 10 years to reach saturation. And that was after a sluggish start, due to the highly publicized competition with Betamax tapes.

As we move closer to the present day, you can see how much faster the public adopts new technologies. Air conditioning, the microwave, cellphones…

Now, what about the internet, arguably the most disruptive technology introduced to the American people in history! Well, in 1997, the U.S. Census Bureau started researching the number of households with the internet. It only took 12 years for the internet to reach 70% saturation in U.S. households.

Or the first major release of a smartphone – Apple’s original iPhone in June 2007. By 2013, over 60% of Americans had a smartphone. That’s only six years to reach 60% saturation!

The takeaway here? Technological innovation is happening faster than ever – and so is public adoption.

As an investor, you need to be more aware of the changing consumer technology space, as there are outstanding fortunes to be made on innovative, disruptive technologies being developed. And you stand the best chance of becoming significantly wealthier if you’re able to identify disruptive technologies early, so you can jump on board before everyone else does – and before the technology gains mass adoption. Keep in mind that by the time you see new technologies showing up in the majority of U.S. households, it’s likely too late.

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