Hi and I want Go-Big-Or-Go-Home Investment Ideas for My Roth IRA

[raria]

Hi Y'all

Long time lurker and first time poster. I've learnt a lot from this forum and others over the years and find myself in a good position.

I'm due to retire in the next few years in my 50's. I have a nice pension and 401K more than enough to cover my expenses with SS to come.

My company offers 401K plans AND a Roth IRA (via a 401a which is rolled over into the Roth). I intend to max out both. Recall a Roth IRA is never taxable on earnings or withdrawals.

I view the contributions to the Roth as being my "go-big-or-go-home" investment plays. Investing the money there into a well balanced portfolio that will return 5% isn't going to change my lifestyle much. But investing in the next Amazon, Netflix, Monster Energy will! Suggestions for sectors as well would be great. The Roth is with fidelity and they have a number of sector funds.

A surrogate question is: "What major societal changes will/have occur that a well run company can monetize?"

So what are people's suggestions/tips. All welcome no judging!

 

[Jerry1]

I use index funds in my ROTH, but it’s not well balanced. It’s 100% stock. Maybe go with a stock index for 90% of your ROTH and take the 10% and look for the next Amazon.

 

[OldShooter]

... I view the contributions to the Roth as being my "go-big-or-go-home" investment plays. Investing the money there into a well balanced portfolio that will return 5% isn't going to change my lifestyle much. But investing in the next Amazon, Netflix, Monster Energy will! ...

Decades of data consistently say that the only way to identify the big winners is in the rear view mirror. So trying to pick them ahead of time is a crap shoot. As long as you understand that, you are good to go. If that's the tactic, though, beware diversification. Diversification will dilute the impact if you get lucky.

Relying on public knowledge will also reduce your probability of a big win. (from Rick Ferri's "All About Asset Allocation" : "There is a classic saying on Wall Street, 'What everybody already knows is not worth knowing.' ") You need to know something that the market has not already priced or overpriced into the stock value. This probably means looking at stocks that do not have analyst coverage. IIRC AAII (https://www.aaii.com/) used to call these "shadow stocks."

 

[raria]

Thanks for the warnings. I understand I could end up with nothing, but that's fine. My pension and 401K are more than adequate to cover my expenses.

Let the big ideas roll.

I use index funds in my ROTH, but it’s not well balanced. It’s 100% stock. Maybe go with a stock index for 90% of your ROTH and take the 10% and look for the next Amazon.

Decades of data consistently say that the only way to identify the big winners is in the rear view mirror. So trying to pick them ahead of time is a crap shoot. As long as you understand that, you are good to go. If that's the tactic, though, beware diversification. Diversification will dilute the impact if you get lucky.

Relying on public knowledge will also reduce your probability of a big win. (from Rick Ferri's "All About Asset Allocation" : "There is a classic saying on Wall Street, 'What everybody already knows is not worth knowing.' ") You need to know something that the market has not already priced or overpriced into the stock value. This probably means looking at stocks that do not have analyst coverage. IIRC AAII (https://www.aaii.com/) used to call these "shadow stocks."

 

[Montecfo]

How about these ideas?

PINS
ETSY
TDOC
SHOP
TTD
SNAP
PLUG
MELI
SE

truly "undiscovered"? No idea

 

[FLSUnFIRE]

I'd want my more speculative investments taxable so I can write off the losses. Much more likely to buy the next Pets.com than Amazon.com IMO. If I hit one out of the park, I can think of worse things than paying taxes on my billions in capital gains.

 

[OldShooter]

... truly "undiscovered"? No idea

Well, looking for stocks that are so thinly traded that big funds can't buy them might be a tactic. Most probably won't grow enough to end up on a fund's radar, but some might be acquired by buyers who are willing to pay up for some special technology.

With roughly 10,000 US funds and roughly US 3,600 tradeable stocks, you have to believe that every tradeable stock is frequently looked at by multiple analysts. Even looking worldwide there are something like 7,000 stocks so, worldwide, analysts must outnumber stocks many times to one.

"Undiscovered?" Maybe one of the Dead Sea caves contains some stock certificates tucked in with the scrolls?

Even the venerable Ben Graham said, in an interview shortly before his death:

In general ... I am no longer an advocate of elaborate techniques of security analysis in order to find superior value opportunities. This was a rewarding activity, say, 40 years ago, when our textbook "Graham and Dodd" was first published; but the situation has changed a great deal since then. In the old days any well-trained security analyst could do a good professional job of selecting undervalued issues through detailed studies; but in the light of the enormous amount of research now being carried on, I doubt whether in most cases such extensive efforts will generate sufficiently superior selections to justify their cost. (http://www.grahamanddoddsville.net/...raham - Financial Analysts Journal - 1976.pdf​

 

[MRG]

Put mine in GOOGL a decade ago. Working.

 

[raria]

Put mine in GOOGL a decade ago. Working.

Now that's an interesting idea. Your saying invest in market leaders in industries that have more to grow. Thanks.

 

[raria]

How about these ideas?

PINS
ETSY
TDOC
SHOP
TTD
SNAP
PLUG
MELI
SE

truly "undiscovered"? No idea

Thanks but doesn't have to be actual stocks, can be areas/sectors/ideas. For example, I've been looking at artificial meat as many millennial (25+%) are vegetarians.

 

[chassis]

Qqq
ftec
arkk
arkq
arkw
vug
mseqx

 

[Montecfo]

Thanks but doesn't have to be actual stocks, can be areas/sectors/ideas. For example, I've been looking at artificial meat as many millennial (25+%) are vegetarians.

That's a pretty tough space I think. Something some consumers like the idea of but will like it less once they understand the product.

And 25 pct seems quite high. But it is trendy to say so.

 

[ERD50]

Well, OP seems to understand the risk/reward, and has a back up plan (I'll assume these are all well thought out, consider inflation, etc), so sure, why not? I'll play!

Why not Las Vegas (seriously)? Put it all on 17 (or your favorite #). Roulette actually has a pretty low average % that goes to the house. I seriously think that may be a better bet than a stock pick.

Thoughts?

-ERD50

 

[MichaelB]

This obviously isn’t the thread to discuss index investing, and the OP has acknowledged the risks, so let’s move the thread to the stock picking and alternative assets forum.

 

[KCGeezer]

I decided to do something similar for a small Roth potentially designated for grandkids. Cannabis, EV’s, water purification, and solar would be the sectors I’d target. I’ve purchased Canopy for cannabis, Workhorse for EV’s, and Brookfield Renewable. Haven’t researched water companies yet.

 

[MRG]

Now that's an interesting idea. Your saying invest in market leaders in industries that have more to grow. Thanks.

+1
And as long as the facts don't change stay the course. Whenever I've been inpatient and thought about selling something good happens.

 

[OldShooter]

Now that's an interesting idea. Your saying invest in market leaders in industries that have more to grow. Thanks.

The problem is that a good company with good potential may not be a good investment. Here is investing patriarch Ben Graham (in "The Intelligent Investor") on the problem:

" ... we hope to implant in the reader a tendency to measure or quantify. For 99 issues out of 100 we could say that at some price they are cheap enough to buy and at some other price they would be so dear that they should be sold. The habit of relating what is paid to what is being offered is an invaluable trait in investment. In an article in a women’s magazine many years ago we advised the readers to buy their stocks as they bought their groceries, not as they bought their perfume. The really dreadful losses of the past few years (and on many similar occasions before) were realized in those common-stock issues where the buyer forgot to ask “How much?""
​

 

[Montecfo]

I decided to do something similar for a small Roth potentially designated for grandkids. Cannabis, EV’s, water purification, and solar would be the sectors I’d target. I’ve purchased Canopy for cannabis, Workhorse for EV’s, and Brookfield Renewable. Haven’t researched water companies yet.

Water and purification/filtering has been a good space for a long time. Stocks seldom seem cheap but I think that reflects the value seen.

 

[whatnot]

I decided to do something similar for a small Roth potentially designated for grandkids. Cannabis, EV’s, water purification, and solar would be the sectors I’d target. I’ve purchased Canopy for cannabis, Workhorse for EV’s, and Brookfield Renewable. Haven’t researched water companies yet.

Ohh, I really like these as options!

 

[USGrant1962]

COIN for crypto. Or as others have mentioned ARKK for all of the above.

 

[tutan]

TQQQ or UPRO. Throw in a bit of TMF to dampen market crashes. Read up on HEDGEFUNDIE's excellent adventure, a 2 part saga on Bogleheads forum.

 

[joesxm3]

If you want some disruptive companies or industries, take a look at the Ark Investment funds. You can either buy the ETF's or just look at their list of holdings to pick some specific companies.

One area that I think will be very disruptive and important in the next decade is genomics. There is the ARKG ETF that invests in this space. I recently watched a two hour interview with one of the ARKG analysts and he explained how there are several areas that intersect - genomics, robotics (to do the gene sequencing and other tasks cheaply at scale) and AI which drives the analysis of the genetic information. He felt that the rapidly decreasing costs related to gene sequencing would result in huge advances in medical treatment. The interview was two hours long and I ended up staying up way past bedtime to finish it. The thing that really caught my attention was "liquid biopsies", which detect cancer by sequencing the DNA shed from the tumors in the blood.

One area that caught my interest is gene editing. There are several companies in this space that may be like buying a lottery ticket. CRSP, NTLA, BEAM, EDIT, CRBU (which just had and IPO last week).

In the way of large companies likely to dominate their spaces, Tesla and Google come to mind. Tesla being much more than a car company, with all of their huge battery development (the fire in Australia aside). Google also has a 10% ownership of Space-X, so that is a way to invest in that since Space-X will probably not go public.

Now if you really want to "go big or go home", then you should take a stroll in the crypto casino. You can buy GBTC and ETHE from Grayscale in your IRA's to get BTC or ETH exposure. From what they say, bitcoin will either be worth a million in 10 years or worth nothing.

 

[Markola]

I’d prolly buy some Irish mortgage-backed securities on margin, then flip them into German comic book derivatives on the OTC market by financing with crowd-sourced crypto futures. Obviously, don’t forget the credit default swaps for downside risk protection. Or VTSAX. YMMV.

 

[captain3d]

GBTC
ETHE

Obviously [emoji857]

 

[skipro33]

I'd say technology will be the most likely way to pick a go-big stock. And to narrow down a little, I'll say battery technology and solar technology. There's so much new battery stuff coming down the line in the future, they'll make current lithium batteries look ancient in less than a decade. Been reading about lithium iron batteries that store many times more than conventional lithium and cost next to nothing to manufacture in comparison.
Solar is also ripe. Solar electricity is formed when photons from the sun hits a crystal. New solar technology has the photon pass through the crystal into a stacked crystal, through another and another. It would be like stacking solar panels one on top of the other. Or folding a solar panel several times. The photon just passes through them all and makes the same amount of power in a much smaller footprint. The big problem with solar now is that it has to cover a lot of earth to make enough. Not if it's able to be multi layer.
There's talk of incorporating solar into road beds and using conductive or inductive pick ups from cars to charge your car as you drive.
Or batteries that, instead of plates and electrolyte, use a slurry of metal and electrolyte. Instead of charging a battery, you drain the spent slurry and fill with freshly charged slurry. Takes about as long as filling a car with gas.

One more thing is medicine. Technologies like Lasik surgery is very antiquated. Newer technologies are ready to be marketed. Imagine an eyedrop that softened the molecular bonds of your cornea, making it pliable. Like heating a plastic spoon and moving it to reshape the curve of the spoon. Then a hard contact lens is applied to form the shape and a counter-acting drop is applied to the eye to neutralize the first drop. No scalpel, cutting and it can be repeated over and over and over.
Someone figures out how to grow hair on the follicle challenged will make a fortune. There's no end to medical discoveries.