Please ensure Javascript is enabled for purposes of website accessibility

The Next Millionaire-Maker Megatrend

By Austin Edwards - Updated Nov 11, 2016 at 4:44PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Will it really be 10 times bigger than the Internet?

I don't know about you, but I'm starting to forget what life was like before the Internet.

I can't even remember the last time I called a travel agent instead of just using (NASDAQ:PCLN), or looked up a stock quote in a newspaper instead of on Yahoo! (NASDAQ:YHOO) Finance.

In a lot of ways, that's sad. But it's also incredible to think that a technology that evolved out of the U.S. government's reaction to the Soviet Union's launching of Sputnik has come to dominate our lives.

Even more incredible ...
Investors who foresaw how profoundly the Internet would change our world have been able to make an absolute fortune off it.

Take those who understood the potential of e-commerce, for example. Most people scoffed at the idea of buying retail goods "online," but early investors in have grown their money by as much as 2,880%.

Needless to say, the Internet revolution turned out to be an unprecedented source of wealth creation. That's why I was blown away when I read that a well-respected venture capitalist now sees a megatrend on the horizon that he says could be ...

"Bigger than the Internet by an order of magnitude"
In case you're unaware, an order of magnitude is a multiple of 10.

That's right ... venture capitalist Ray Lane recently told The Wall Street Journal that he has found something he thinks could be 10 times bigger than the Internet.

And he would know. After all, he's a partner at the famed venture capital firm Kleiner Perkins Caufield & Byers -- which has made a killing on everything from Electronic Arts (NASDAQ:ERTS) to Intuit (NASDAQ:INTU).

He was also an early backer of Internet companies like Google, Amazon, and Netscape.

And he's not the only one who's taking notice
In a recent shareholder update, Fidelity Magellan manager Harry Lange outlined several reasons why his fund has begun to focus more on cleantech in general and on solar energy in particular.

  • Technological advancements and greater economies of scale are making it cheaper to produce electricity from solar energy.
  • Thanks to a declining cost curve and the rising cost of conventional fuels, solar energy is becoming more competitive in areas with high electricity costs.
  • Governments worldwide are providing tax incentives for both producers and consumers of solar energy.

The next great bull market?
All of these factors contributed to Wall Street's love affair with solar energy last year …


Gain in 2007

Suntech Power




First Solar


By the end of 2007, it looked like Ray Lane was actually understating the case. But then 2008 hit, and the market began selling off steadily, before slipping into an all-out tailspin. The solar sector has been particularly hard hit.


Year-to-Date Gain

Ascent Solar


Trina Solar


JA Solar


Granted, much of this poor performance can be blamed on general market turmoil, massive hedge fund sell-offs, and ever-present recession fears, but it also serves as a reminder that just because you recognize a developing megatrend, that doesn't mean you're guaranteed to cash in on it.

In fact, more often than not, those who jump on board without doing their due diligence will end up losing a fortune.

Just look at the Internet
As anyone who was a 20-something slacker working in Silicon Valley in the late 1990s can tell you, the Internet spawned more big losers than big winners by an order of magnitude.

That's why at Motley Fool Rule Breakers, we're doing plenty of research on cleantech and keeping a close eye on solar stocks in particular -- but you won't find us recommending every solar stock under the sun.

Among our recommendations, you will find a few carefully selected cleantech companies, including a proven leader in the solar industry, a Chinese company taking the lead on forays into new clean-coal and nuclear power technologies, and an alternative-energy exchange-traded fund that holds a wide range of companies involved in cleantech including Calpine (NASDAQ:CPN), Applied Materials (NASDAQ:AMAT) and Air Products & Chemicals (NYSE:APD).

Granted, these stocks have been pounded into the ground, along with the rest of the solar sector, and the market as a whole. But as the market begins to recover and a much more environmentally friendly administration takes office, these stocks present a compelling profit opportunity.

Not to mention, they were handpicked using Motley Fool co-founder David Gardner's Rule Breakers criteria, which were designed to uncover top-notch growth stocks by finding companies that have:

  • Top-dog and first-mover status in an important, emerging industry.
  • Sustainable competitive advantages gained through business momentum, patent protection, visionary leadership, or inept competitors.
  • Great management with financial backing from smart investors and corporations.

This approach has already led David and his team to excellent high-growth companies, like Intuitive Surgical, that should continue to outperform the market for years.

Only time will tell whether it will lead us to gains 10 times greater than those generated by the Internet, but we're always on the lookout for the next millionaire-maker megatrend and the next great growth stock.

If you would like full access to all of our research and recommendations, including our top two picks for new money, we invite you to take a free 30-day guest pass to Rule Breakers. All you have to do is click here. There is no obligation to subscribe.

This article was first published March 24, 2008. It has been updated.

Austin Edwards looks forward to a world powered by sunshine. He owns shares of Intuitive Surgical. Intuitive Surgical, Suntech Power, and Google are Motley Fool Rule Breakers picks., Electronic Arts, and priceline are Stock Advisor recommendations. And yes, even the Fool's disclosure policy sneered at that pun about "recommending every solar stock under the sun."


Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Electronic Arts Inc. Stock Quote
Electronic Arts Inc.
$131.16 (1.45%) $1.88
Booking Holdings Stock Quote
Booking Holdings
$2,023.69 (3.40%) $66.48
Applied Materials, Inc. Stock Quote
Applied Materials, Inc.
$105.05 (5.41%) $5.39
Air Products and Chemicals, Inc. Stock Quote
Air Products and Chemicals, Inc.
$265.63 (2.65%) $6.87

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 08/10/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.