“Everyone has a plan until they get punched in the mouth,” according to boxing legend Mike Tyson.
I wouldn’t last 10 seconds in the ring with Tyson. But in the markets, I could kick his butt.
You see, when it comes to investing, I want to get punched in the face by an unexpected crisis.
Why? Because a prepared investor knows how to turn a crisis into a profit opportunity.
And today, I’ll prove it to you.
The Trade of The Decade
Faithful readers will recall that, in February, I pegged semiconductors as the trade of the next decade.
The reason for this couldn’t be more straightforward:
Without semiconductors, the most important tech trends of the future literally can’t happen.
I’m talking about trends like:
- Artificial Intelligence, which is expected to be worth $120 billion by 2025.
- The Internet of Things, which is already a $200 billion industry.
- Driverless cars… 5G networks… and the list goes on and on.
Each of these trends requires semiconductors to make them happen. That’s why annual semiconductor sales are soon expected to approach two trillion units.
Against this backdrop, my plan was simple:
Buy the dips in chip stocks. Continually.
From Planning to Pouncing
On March 10, ten days before the markets hit their eventual bottom, I shared my research with you on how markets have reacted during prior viral outbreaks.
Then I advised you to “Keep calm and get ready to pounce.”
And as the pandemic overtook the world, I put my plan into practice…
That’s when I wrote you to say, “Every investor, including you, should be buying chip companies right now.”
Why? Because as I explained, “Covid-19 might impact how we work and live in the future…But one thing it won’t change is our demand for chips.”
Sure, China was the epicenter of the coronavirus and a major hub for semiconductor manufacturing…
But any slowdown promised to be a short-term blip in the long-term growth trend…
And as such, it presented a buying opportunity…
There are literally dozens of semiconductor stocks you could have invested in.
But I didn’t leave you to guess which ones had the most profit potential.
That’s not my style.
Instead, I provided specific semiconductor stocks to consider…
As well as two diversified ETFs for the nervous nellies in the bunch.
Fast-forward to today — and the results speak volumes…
Punched in the Face with 81% Profits
If you took the punch to the face in stride and followed my plan, this crisis has turned into a profit bonanza.
As a group, semis have trounced all tech stocks. They’ve gone up an average of 58% so far, versus 43% for the overall tech sector.
So if you bought either of the ETFs I shared — the iShares PHLX Semiconductor ETF (SOXX) or the VanEck Vectors Semiconductor ETF (SMH) — you’d have enjoyed big, fast gains.
And the stats get even more impressive when you look at the stocks I recommended:
Lam Research Corporation (LRCX) has surged 75% so far. That’s almost double the return of the overall tech sector.
And NXP Semiconductors N.V. (NXPI) has rallied 81%...
That’s almost triple the return of the S&P 500 during the same time period.
Follow the Plan
As you’ve learned today, as long as you have a plan — and as long as you follow it, even in the midst of a crisis — you’re virtually guaranteed to come out ahead.
So be sure to keep buying the dips in chip stocks…
And be sure to check out Matt’s essay tomorrow…
He has even more information to share with you about how to profit from this crisis.
Ahead of the tape,