Dear Opportunistic Investor,
On October 30, 2005, something incredible happened...
In Redmond, Washington, one of the world's richest -- and most powerful -- businessmen sent an urgent memo to his top engineers and most-trusted managers.
It sounded the alarm that a very disruptive "wave" was about to wash over the entire world -- forever changing the way we get information and do business.
It also warned this would wipe out the $200 billion business empire he'd spent his life building.
Meanwhile, a few hundred miles south, on the banks of the Columbia River, a mysterious outfit known only as "Design, LLC" quietly constructed two massive, windowless warehouses.
This mammoth undertaking was code named "Project 2," and the International Herald Tribune described the towering monolithic structures as "looming like an information-age nuclear plant."
I realize this may sound like something out of a Tom Clancy novel, but I think you'll want to bear with me, because...
And experts say it's going to upend a $1 trillion industry. Yet very few investors understand just how huge it's going to be.
That's why I urge you to take the next few minutes to read this report in its entirety.
At the very least, you'll get the full story so you can decide for yourself if you'll be front and center when the big money starts rolling in.
But I warn you, the smart money is on the move...
A handful of investors are already quietly positioning themselves to cash in on this incredible economic shift. Soon, tens of thousands will be rushing to join them.
This story is so big that we have to step clear back to February 28, 1881 to put it into perspective.
On that chilly winter night, a 21-year-old British stenographer named Samuel Insull arrived in the port of New York aboard the City of Chester.
Thomas Edison's chief engineer had lured him to America to serve as Edison's private secretary.
11 years later, Insull oversaw the merger that created General Electric, and shortly thereafter was offered the presidency of the Chicago Edison Company.
Little did anyone know, the world of electricity was about to drastically change.
At the time, cities like Chicago had dozens of small, privately owned power stations transmitting direct current (DC) electricity to neighborhoods within a small radius.
With due respect to Edison, Insull knew that the model Edison had created was flawed.
So he set out to transform Edison's legacy into something far greater and more efficient than its creator had ever imagined.
Insull realized if he could create a "utility" by building giant central power stations that would transmit alternating current (AC) electricity over great distances...
These power stations could be linked to form a giant grid that would serve homes, businesses, and industries in even the most remote locations.
Once electricity was readily available everywhere, more and more electric-powered devices would come to market -- creating more and more demand for the electricity that the utilities produced.
And here's the kicker...
Because these utilities could match supply with demand, realize superior economies of scale, and use their generating capacity much more efficiently, they could deliver electricity for a fraction of what it cost people to produce it on their own.
And Insull was right on the money!
By 1907, utilities produced 40% of the power in the U.S. In 1920, that number stood at 70%, and a decade later, it was over 90%.
What was once unimaginable had suddenly become reality.
The next great technological revolution is already under way.
And now that the last pieces are falling into place, the floodgates are beginning to open -- meaning the big money is about to start rolling in...
Which is exactly why I'm writing you today.
You see, one of the most successful investors I've ever met is convinced that this technological shift will dump millions of dollars into the portfolios of investors just like you.
But in order to claim your fair share of the wealth, you have to know who the dominant players are -- and you have to get invested now.
That's why I want to introduce you to this legendary investor and tell you about three companies he's identified as "top dogs" and "first movers" in this breakout industry.
These are the companies he believes will dominate their industries over the next 5 to 10 years and hand investors life-changing wealth along the way.
I'll also reveal the six traits he looks for in a growth stock -- and explain how they have led him to companies that have soared 211%, 233%, 287%, 419%, and even 522% in just the past five years.
But first, let me tell you a little bit more about this amazing technology and why, once again...
You probably remember when computers took up entire rooms and were used only by companies that needed to do intense mathematical calculations.
That all changed when Intel unveiled the microprocessor and a geeky college dropout started writing software with his former high school pal.
Thanks to the virtual desktop they developed, the PC quickly replaced the mainframe as the center of corporate computing and began showing up in homes across America.
Before long, companies began building interoffice networks so that their employees could run programs like Microsoft Word and Excel on their PCs, and also access programs, files, and printers from a central server.
But, like Edison's, this model was far from perfect.
Due to a lack of standards in computing hardware and software, competing products were rarely compatible -- making PC networks far more inefficient than their mainframe predecessors.
In fact, most servers ended up being used as single-purpose machines that ran a single software application or database.
And every time a company needed to add a new application, it was forced to expand its data centers, replace or reprogram old systems, and hire IT technicians to keep everything running.
As a result, global IT spending jumped from under $100 billion a year in the early 1970s to over $1 trillion a year by the turn of the century.
IT-consulting firm IDC reports that every dollar a company spends on a Microsoft product results in an additional $8 of IT expenses.
And one IT expert admits, "Trillions of dollars that companies have invested into information technology have gone to waste."
Yet, companies have had no choice but to run these obscenely expensive and highly inefficient networks.
But that's all about to change...
And that's precisely why the two words "cloud computing" scare the hell out of Bill Gates.
You see, he realizes that thanks to the thousands of miles of fiber-optic cable laid during the late 1990s, the speed of computer networks has finally caught up to the speed of the computer processors.
As IT expert Nicholas Carr explains, "What the fiber-optic Internet does for computing is exactly what the alternating-current network did for electricity."
Suddenly computers that were once incompatible and isolated are now linked in a giant network, or "cloud."
As a result, computing is fast becoming a utility in much the same way that electricity did...
Think back a few years -- anytime you wanted to type a letter, create a spreadsheet, edit a photo, or play a game, you had to go to the store, buy the software, and install it on your computer.
But nowadays, if you want to look up restaurants on Google... find directions on MapQuest... watch a video on YouTube... or sell furniture on Craigslist... all you need is a computer with an Internet connection.
Although these activities require you to use your PC, none of the content you are accessing or the applications you are running are actually stored on your computer -- instead they're stored at a giant data-center somewhere in the "cloud."
And you don't give any of it a second thought... just like you don't think twice about where the electricity is coming from when you plug an appliance into the wall.
But cloud computing isn't going to be just a modern convenience -- it's going to be an enormous industry.
You see, everyone from individuals to multinational corporations can now simply tap into the "cloud" to get all the things they used to have to supply and maintain themselves. This will save some companies millions and make others billions.
That's the title of an article in PC Magazine.
The answer was an overwhelming yes. And PC Magazine isn't the only one taking note of this sweeping trend...
The Economist claims, "As computing moves online, the sources of power and money will increasingly be enormous 'computing clouds.'"
David Hamilton of the Financial Post says this technology "has the potential to shower billions in revenues on companies that embrace it."
And Nicholas Carr, former executive editor of the Harvard Business Review, has even written an entire book on the subject, entitled The Big Switch. In it, he asserts: "The PC age is giving way to a new era: the utility age."
He goes on to make this prediction: "Rendered obsolete, the traditional PC is replaced by a simple terminal -- a "thin client" that's little more than a monitor hooked up to the Internet."
While that may sound far-fetched, in the corporate market, sales of these "thin clients" have been growing at over 20 percent per year -- far outpacing that of PCs.
According to market-research firm IDC, the U.S. is now home to more than 7,000 data centers just like the one constructed on the banks of the Columbia River in 2005.
And the number of servers operating within these massive data centers is expected to grow to nearly 16 million by 2010 -- that's three times as many as a decade ago.
The simple truth is that cloud computing is becoming as big a part of our everyday lives as cell phones or cable television.
That's why I'm so eager to tell you all about the three companies that are leading the charge and look poised to rule the post-Microsoft world.
One is the undisputed leader of the cloud computing pack.
You may already know who I'm talking about... and you may have even guessed that it is the real face behind Design, LLC.
But what you may not realize is that right now is the perfect time get invested -- despite what many so-called "experts" in the financial media might be telling you.
Don't forget, even after the dot-com collapse and the recent market sell-off, every $10,000 invested in Microsoft would now be worth over $495,701.
Even a modest $3,000 investment would have grown into $148,710!
Just imagine what you could do with that kind of money...
Now imagine being given a second chance to secure that kind of profit.
Well, look here... this is your second chance.
You see, like Microsoft in the early 1990s, Google is just getting started.
They've already won the search engine war, set the standard for online advertising, and turned the company's name into a word tens of millions of people use daily.
And now they're fast becoming synonymous with the future of computing...
Over 500,000 companies -- including GE and Procter & Gamble -- have already signed up for Google Apps.
This grab bag of business applications can be purchased and run over the Web for just $50 per year, and is just one of many Google products now giving Microsoft a run for its money.
Considering that Google Apps costs just 1/10th of what a traditional business software suite does, it's no surprise that more than 3,000 businesses are signing up per day.
No wonder the Financial Post says, "The cost savings in offering scaled-down versions of large enterprise software is a making cloud computing a huge business."
But at just $50 a pop, you might be wondering how big this business can really get.
Industry research firm Gartner, Inc. says the market for Internet-based software hit $5.1 billion last year and conservatively estimates it will more than double to $11.5 billion by 2011.
But don't forget, this is just one small part of the giant and highly profitable cloud computing world.
Given its dominance over the online world, massive network of strategic partnerships, and unmatched ability to innovate, you can bet the great majority of the fortunes generated by cloud computing will flow through Google's coffers.
Even so, you may be wondering...
Not at all!
In fact, as I mentioned, one of America's most trusted stock pickers is convinced that right now is the perfect time to get invested in the future of cloud computing -- and especially in Google.
But why should you trust him?
Well, let's just say this isn't the first time this maverick investor has recommended a stock after the hotshots on Wall Street declared it was "too late"...
Back in 2005, he recommended robotic surgery specialist Intuitive Surgical to a small group of opportunistic investors.
At the time, shares were selling for $44.17. One year prior, shares had sold for $17.46, and a year before that they were selling for just $8.68.
You read that right... Intuitive Surgical had risen 500% in the two years before he recommended it -- and that scared lesser investors off.
But this visionary investor recognized that Intuitive Surgical was both "top dog" and "first mover" in its industry and still had plenty of room to run...
Shares traded as high as $359.59, and even after the recent market downturn, those who followed his lead are sitting on a whopping 522% gain.
And this wasn't just some sort of lucky break or fluke, either.
You see, this world-famous investor first caught the financial media's attention when he recommended AOL in the summer of 1994 - after it had quadrupled in just 12 short months.
Of course, the story is the same with AOL -- he recognized it as both a top dog and a first mover in an important emerging industry and knew it was only getting started.
Six years later, AOL was a 100-bagger, turning every $10,000 invested into a whopping $1 million -- and this growth investor into a living legend.
Here are just a few more of the top dogs and first movers he's uncovered recently:
By now, I imagine you're ready to meet this legendary investor and find out exactly what I mean by "top dog" and "first mover." But first...
My name is Mark Brooks, and I publish an award-winning financial newsletter that carries the same name as the small community of investors I mentioned a moment ago...
It's called Motley Fool Rule Breakers, and it's headed up by the extremely successful stock picker I've been telling you about...
You may have already guessed that I'm talking about David Gardner -- co-founder of The Motley Fool. After all, he's pretty well-known...
You've probably seen David on CNBC discussing his favorite growth stocks with some of the nation's other top-tier equity analysts...
Or perhaps you've read one of his many best-selling investment books...
Or maybe you're just familiar with some of his remarkable stock recommendations... eBay in 1999... Starbucks in 1998... AOL in 1994... Amgen in 1998... Amazon in 1997.
Regardless, it's not hard to see why Money.com says he's "among the most widely followed stock advisors in the world."
And I'm sure you can understand why any time David gets excited about an investment opportunity, I stand up and take notice...
Well, let me tell you, right now David is extremely excited about what he calls...
These are 3 exceptionally well run companies that David and his team of cutting-edge equity analysts have identified as both top dogs and first movers in their respective industries.
You've already heard a little bit about the first of these three, and I imagine you're beginning to see why David thinks any serious investor should get it in his portfolio right this minute.
But as I mentioned before, you deserve to get the full story so you can decide for yourself whether or not to take advantage of this incredible opportunity.
That's why I want to send you a complimentary copy of our brand-new special report: "Cloudy With A Chance of Billions: The 3 Kings of Cloud Computing."
This valuable report is jam-packed with patented in-depth analysis and investment insights and is available only to a select few individual investors.
Not only does it spell out exactly why Google could be your next monster winner in plain, easy-to-understand English, it also reveals 2 lesser-known companies that are poised to dominate the world of cloud computing and hand investors incredible returns.
Just ahead, I'll tell you how to claim a complimentary copy of this report, plus I'll give you a chance to join the Rule Breakers community at a limited-time discount rate, but first let me tell you a little more about the other two incredible companies that David's so excited about...
It's quite simple really.
A "top dog" is a company that dominates its industry... and a "first mover" is a company with a technology or product so revolutionary that it disrupts an existing industry and creates an entirely new one.
On the rare occasion that you find a company that is both a top dog and a first mover, the chances are pretty good that you've found your next big winner...
Just think of eBay in the online auction market... Amazon in the online retail market... or Netflix in the DVD-rental market (David led investors to big gains on all three).
These companies redefined the way business was done, launched entirely new industries, and continue to dominate those industries to this day. And you don't need me to tell you how handsomely they've rewarded shareholders along the way.
So you can see why David and his Rule Breakers team work around the clock to find companies that are both top dogs and first movers.
But they don't stop there... You see, David discovered long ago that in order to find companies that will deliver truly life-changing investment returns, you have to break the rules and go against much of what passes for "wisdom" on Wall Street.
That's why he searches for companies with...
And here's the big one...
Remember, many of David's biggest winners were recommended after all the fast-talking experts on Wall Street already declared you'd missed your chance to buy.
It's the exact same story with the second company I'm going to tell you about today...
When David first recommended it to the Rule Breakers community back in 2005, he admitted it wasn't "cheap."
With the arrival of cloud computing, he's more excited than ever about its potential to make investors rich.
You see, this company works behind the scenes to make sure you can access everything the Web has to offer at lightning-fast speeds.
And thanks to the ever-growing number of people now using the Internet to do everything from watch movies to buy houses, this once-flailing refugee of the dot-com meltdown is now one of the most important tech companies in the world.
Apple, Microsoft, Sony, and Nintendo are among its top clients -- and they're all more than happy to pay up for the quality this company consistently delivers.
While this usually runs somewhere in the neighborhood of $275,000 per year, more and more complex applications are coming online all the time -- giving this company greater pricing power.
At last count, it had more than 100 clients paying $1 million or more per year. So it's no wonder that cash from operations has more than tripled from $83 million in 2005 to over $380 million today... Or that the cash on its balance sheet has grown from just $92 million to a whopping $321 million.
And you can bet that this growth will only accelerate as cloud computing becomes an even more vital part of our personal and professional lives.
You see, because this company is both a top dog and a first mover, it has been able to gain an almost insurmountable lead in market share, allowing it to sport superb operating margins.
Gross margins currently sit at an incredible 76%; meanwhile, net margins have climbed to an all-time high of 18% -- and continue to grow.
All things considered, I think you can understand why David thinks this will be one of the dominant players in the cloud computing world for years to come.
And it's the exact same story with the third company he reveals in The 3 Kings of Cloud Computing...
Not only does this rising tech superstar meet all 6 of David's criteria for a classic Rule Breaker, but it also has a stranglehold on a niche market that's absolutely essential to the future of cloud computing.
Whereas the last company I mentioned keeps the massive amounts of Web traffic flowing smoothly and efficiently, this company designs extremely complex software that allows central servers to function in the first place.
While the market for this software sits at roughly $1 billion today, it is estimated to soar to $5 billion by 2011 -- an astonishing 50% compound growth rate.
And thanks to various patents, a considerable head start, and immense technical know-how, there is very little chance competitors will be able to wrestle the lion's share of that $5 billion away from this company.
Over the past year, this company has seen its revenue climb 48% and its earnings per share climb more than 76%. Not to mention, returns on equity and invested capital have never dropped below double digits.
But here's what has really caught David's attention...
A recent shake-up in management has caused shares to tumble well below their fair value -- giving investors who act now a rare opportunity to snap up an incredible growth stock on the cheap.
But you may be asking yourself...
I won't lie... it takes guts to make money in this market.
But here's some good news.
For one thing, our current economic situation bears a striking similarity to the economic downturn of the early 1990s. And Morningstar reports that during that recession, growth stocks more than doubled the return of "value" stocks.
For another thing, SmartMoney recently confirmed that "growth stocks can excel even if the broad market continues to stumble." In fact, it reported that right now, "analysts expect better profit prospects for growth stocks than for value stocks."
Money manager Dan Becker says, "Growth is as rare as a diamond, and everyone's looking for it."
Meaning, right now, we now have an historic opportunity to snap up Hope Diamond investments at cubic zirconia prices.
Will you be one of them? You could be.
It all starts with taking us up on this special offer and claiming your FREE report: Cloudy With a Chance of Billions: The 3 Kings of Cloud Computing. I want you to have it right now, with my compliments.
And here's one more thing I'd like you to accept with my compliments: an invitation to join our Rule Breakers community absolutely without any risk.
That's right... I want you to join us in our quest to find and buy tomorrow's breakout companies without having to risk one dime.
You see, at Rule Breakers, we stand behind every piece of advice, insight, and recommendation we make, with 100% confidence. Your complete satisfaction is guaranteed -- or your money back!
In other words, you can position yourself to profit from every recommendation David and his team have ever made and discover everything that Motley Fool Rule Breakers has to offer -- WITHOUT ANY RISK WHATSOEVER.
Go ahead and take a good look at every breakout company we've uncovered. Get all the details on the companies that will change the world over the next 10 to 15 years...
And then if for any reason you're not totally thrilled... just tell me to send your money back, up to the last day of your first month. I'll promptly refund every cent, NO QUESTIONS ASKED.
All the details of The Motley Fool's 3 top cloud computing investments. All the content on the Rule Breakers members-only website. All the reports. All the recommendations. All the articles and investing tips. Plus a valuable fast-action bonus detailed below -- THEY'RE ALL YOURS TO KEEP WITH MY COMPLIMENTS.
What's more, if you decide you'd like to opt out at any point after your first month, you'll be entitled to the full dollar value of the remainder of your membership term.
You're completely protected... but I'm pretty sure once you have a closer look at what our exclusive, forward-looking investment group is doing, you'll want to stick around and get all the upcoming Rule Breakers recommendations...
After all, you'll be the first to know about tomorrow's next great companies and have the rare chance to get these fortune makers into your portfolio before the masses catch on and drive prices out of reach.
Which reminds me, I need to tell you about one final company David and his team recently unearthed...
This company started out as a top dog and first mover in another emerging area of technology, but it has quietly transformed into a budding cloud computing powerhouse that's positioned to host all of the corporate data on the Web.
But it wasn't its robust developer network (literally tens of thousands of developers are now invested in the success of this company) nor its 50,000-plus corporate client list that initially caught David's eye...
It was the fact that, like many of the other companies I've told you about today, all the "pros" on Wall Street claimed it was drastically overvalued -- while overlooking the fact that it'd more than doubled its customer base in just over two years and more than doubled its free cash flow in just over one.
Not to mention, it outperforms nearly every other company out there (even Google) in turning research and development investments into returns for shareholders.
Combine this with the fact that its cloud computing services are extremely simple to use and can save clients tens of millions of dollars over time, and you can see why David and his team dubbed this as one of "The New Kings of Cloud Computing" and urged our Rule Breakers community to snap shares up right away.
At the time, they were selling for just $27.57.
Today they fetch about $66 -- meaning investors who followed David's advice are already up 140% in a short time.
But don't worry... as with all the companies I've told you about today, David and his team are convinced that this one is just getting started and that the big money is yet to be made.
Of course, it's only a matter of time before everyone else catches on, which is why I think you'll want to get all the details right away...
And it couldn't be easier! When you join Rule Breakers absolutely risk-free right now, I'll include a just-released write-up of "The New King of Cloud Computing." That way, you'll have everything you need to get invested in all the Rule Breakers that are dominating the world of cloud computing and helping investors like you cash in.
Thousands of dollars? Sure. But you won't have to pay thousands to get your hands on them.
That's because, when you join us at Rule Breakers, you can put a team of experts -- including Motley Fool co-founder David Gardner; tech guru Tim Beyers; nanotech expert Karl Thiel; and early adopter expert Rick Munarriz -- to work for you for just a fraction of that.
No other team will work harder on your behalf -- doing all the research, making the contacts, poring over the financial books, doing the key calculations -- to make sure you get the best investments for the months and years ahead!
The 3 Kings of Cloud Computing: reveals The Motley Fool's top 3 cloud computing plays and shows you exactly how to position yourself to cash in on the coming investment boom. Remember, we're at a technological tipping point. The cloud computing revolution has already begun -- and the big money is about to be made!
High-growth stock opportunities in every issue: Every issue of Motley Fool Rule Breakers features two picks from sectors like biotech, nanotech, next-generation technologies, and alternative energy. We're not a fan of "sound bites." Every stock we select comes with an in-depth company profile, product description, competitive analysis, risk analysis, and discussion of the company's finances and sales prospects. Plus, you get your tough questions answered in the detailed Q&A.
Updates on all your Rule Breakers companies: Let's face it. These stocks are fast movers in a rapidly changing investment landscape. A lot can happen in a short amount of time. That's why you get weekly updates online and via email on news that impacts your Rule Breakers companies.
Valuable insight and feedback from our Rule Breakers network: Got an investing question? Post it on the board. Odds are that another Rule Breaker or one of our analysts will have the answer you're looking for. Every day you can talk with folks who are out there in the market, digging deep to find those next breakthrough investments that could hand you a lifetime of wealth.
The scoop on every single Rule Breakers recommendation -- in real time: You can see every single stock ever recommended in Rule Breakers the moment you join. Our scorecard gives you the current return on every stock -- both winners and losers -- and lets you keep track of how we're doing relative to the S&P 500. You can click through to get more information on all our picks from back issues, updates, discussion boards, and much more.
In-depth CEO interviews available nowhere else: Over the years, David Gardner has sat down with the top CEOs and power players like Jeff Bezos... Meg Whitman... Mark Cuban... John Bogle... Terry Semel... and Howard Schultz. As part of the Rule Breakers family, you'll have exclusive access to all the powerful moneymaking insights and timely profit opportunities they revealed to him.
PLUS, act now and we'll send you one of the most valuable special reports we've ever put together here at The Motley Fool -- ABSOLUTELY FREE! Have a look...
I can only guarantee the exclusive report The 3 Kings of Cloud Computing and your FREE copy of Stocks 2011: The Investor's Guide to the Year Ahead -- if you join us RIGHT NOW.
There will never be a better or an easier way to position yourself to cash in on the coming investment boom. So please don't delay.
Simply click the "START NOW" button to the right to join us and begin securing a lifetime of wealth today!
Here's to the next generation of investment millionaires,
Publisher, Motley Fool Rule Breakers
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