If you want bigger returns you usually have to take on more risk. Just because you’re taking on more risk doesn’t mean you have to risk your money away on idiotic investments. The whole point of these investments is that their investments. You’re in it for the long haul. You’re going after those companies that have great potential. The stand out companies that make people talk.
I’m talking about the “next Apple” or the “next Google” type of investment. These investments won’t make you rich overnight, but putting some money into them now could grow handsomely in the next decade, the same way that Google and Apple has grown in the past decade or two.
To be clear, these stocks do carry risk, but they also have great potential. Check out my top three for 2017.
1- Bluebird Bio (BLUE)
Bluebird is in the business of curing people from diseases. To be more specific, they develop gene therapies. Gene therapies is newer type of treatment for people that have genetic diseases or problems. The medical process brings forth “corrected genes” into the patient’s system in order to treat them, or in some case cure them completely.
This may sound like futuristic mumbo jumbo to you, but it’s nothing short of amazing what this company is doing, or trying to do. Genetic diseases, and even cancer, are all on their list of things they want to cure.
How risky is BLUE?
At this point they’re fairly risky because they haven’t really made any money yet. Their products are in clinical trials right now. They’re aren’t really earning anything quite yet. However, the good news is that these trials are doing pretty well for some people. To be more specific, some people with a life threatening genetic condition have been completely cured of their condition.
With that being said, Bluebird Bio is a riskier speculative type stock. I wouldn’t bet the house on it, but I’d put a small bet in if I had some money to wager. Especially now when the stock is about half off from it’s all time high it had in 2015.
2- Alibaba (BABA)
Alibaba is one of the most popular places to go for e-commerce in China. Alibaba is the place to go in China the same way that Amazon rules the online marketplace over here in the states. Alibaba isn’t just another Amazon though. They don’t even have the same business model. If I had to describe Alibaba I would say that it’s almost like a mix of Amazon, and eBay.
Alibaba doesn’t actually sell anything itself. Like eBay, Alibaba connects buyers and sellers for transactions. They make their money off of fees and payment processing. They don’t do auctions though. As a buyer you can contact a seller and try to negotiate your own deal.
This is all great because they don’t have to worry about product overhead like Amazon does. They just have to maintain their website and keep connecting people. Seems like a great business model, doesn’t it?
So where is the risk with Alibaba?
It’s risky because of how much it depends on the Chinese economy. Although the Chinese economy has been steadily growing, and it has been forecast to continue to do so, it has been growing at a slower pace. There’s no telling what will happen within the Chinese economy and the Chinese government. There’s always a risk that the government could somehow intervene in some way and cause problems for Alibaba.
Alibaba will likely continue to expand into other markets, but they’ll have to deal with Amazon and eBay in some other well established countries. Alibaba might have a stranglehold on China for now, but that might not always be the case.
That being said, Alibaba is doing a lot of things right. They’ve got a huge chunk of the pie for a market that is growing and expected to continue to do so for quite some time. The risk might be well worth it with this stock.
3- Tesla (TSLA)
Last but not least I have Tesla in my list. Tesla is one of my personal favorite stocks simply because of the CEO that runs the company, Elon Musk. Musk isn’t the only reason why you should be looking at Tesla though.
Tesla is set to start making available their electric cars to the mass market this year. Until now, They’ve been known for their new look electric cars that sell in the $100,000 range. Most people can’t afford to spend $100K on a car. This year though Tesla is coming out with a $35,000 car.
For now, Tesla is making most of its revenue from selling their cars along with products and services for them. Cars isn’t the only thing Elon Musk is going after though. Tesla acquired SolarCity at the end of 2016 which will be used to further advance Musk’s vision for Tesla. SolarCity is a solar panel company, and Musk has said numerous times over that he wants Tesla to be the place to go for all the power you need in your daily lives.
How will Tesla be the place to go to power our households?
The purchase of SolarCity will help Tesla create synergy for Musk’s vision going forward. Tesla will sell solar panels along with their ever increasing efficiency batteries for storage of that energy. That way your home can store the extra energy you get from the solar panels and use them during off times.
Imagine a future where your home is self sufficient when it comes to energy. It generates and stores the energy with the solar panels and the battery you have at the house. Then you can run all your homes needs along with charging your Tesla in the garage all while being more “green” for the environment.
Why is Tesla a risky stock?
It’s risky because investors are buying the story at this point. They’re buying the vision that Musk is presenting them. They’re hoping that Musk will deliver on all his promises. Tesla has far reaching ambitions, but if Musk can deliver on them it will make Tesla Investors richer.
For now, profits from Tesla are miniscule if anything at all. It should start turning a profit this year though. With that being said, it has also taken on more risk and debt with its acquisition of SolarCity. Furthermore, a lot of the stock’s price may have already “baked in” the vision that Musk has laid out for us. It could be one of those “buy the rumor, sell the news” type things.
Nevertheless, If you believe in Musk then you believe that Tesla has the potential to be a real game changer type company. The ambitious vision that Musk is shooting for reminds me of the type of changes that Apple had when they introduced the iPhone to the world. Now, almost everyone in the world carries around a little computer with them that they call a phone. Tesla wants to have a similar in scale type of impact in your life. If anyone can do it then it would be with a leader like Musk heading the way.