5 Growth Stocks That Could Make You Richhttp://www.fool.com/investing/general/2012/06/22/5-growth-stocks-that-could-make-you-rich.aspx Tim Beyers
June 22, 2012
Disrupted industries are rife with chaos. Old leaders are pushed aside, as new ones take their place, claiming the mantle “Rule Breaker” in the process.
But, eventually, all disruptions end, and chaos subsides as order returns. When this happens, Breakers that were responsible for the earlier upheaval vie to dictate the new rules of the market. We call the ones that succeed Rule Makers. Our long-term goal as investors should be to hold as many Breakers as we can through this gloriously profitable plateau.
We aren’t alone. Superinvestor Warren Buffett told those attending last month’s annual Berkshire Hathaway shareholder meeting that he’d much rather spend time valuing and investing in healthy, growing businesses that trade for a discount.
“I would never spend a lot of time valuing declining businesses,” Buffett said during a multi-hour question-and-answer session. “The same amount of energy and intelligence brought to other businesses is just going to work out better.”
Identifying the chasm crossers
And you know what? It does. Here’s a closer look at just a few of the category killers you’ll find in the Berkshire Hathaway portfolio as of this writing:
When do you know a Breaker has become a Maker? Think about Apple. Back in 2007, the Mac maker was breaking the rules with a proposed smartphone that had no built-in keyboard, and which could only be made to work with AT&T’s network here in the U.S.
Fast-forward five years. Apple is now the world’s most valuable company; its legendary iPhone carrier subsidies have led to huge gains in profits and cash flow. Competitors have yet to figure a way to extract similar terms, while some former highfliers, such as Research In Motion, appear to be on the path to extinction.
Apple is making the rules in the smartphone market here in the U.S., as its influence grows worldwide.
5 stocks with big potential
1. Baidu (Nasdaq: BIDU ) . Any company that dominates its market has a chance to be a Rule Maker. Baidu, China’s top search engine, already controls more than 80% of the market, and is positioning itself to expand in new areas. A deal with Apple puts the search engine on Chinese iPhones. All signs point to continued dominance of its home market.
2. Google (Nasdaq: GOOG ) . Just as Baidu dominates search in China, Google dominates search here in the U.S., and many other territories around the world. What’s more, the company is activating 900,000 Android devices daily, the Chrome browser has eclipsed Internet Explorer, and Google Apps is finally proving itself a legitimate alternative to Office. Add it all up and you’ve got a digital network that serves hundreds of millions of people daily. Th