Everybody wants to find the next great stock early.
That’s the dream, right? You hear about a company before it’s on every financial news show, before every analyst has a price target on it, before your neighbor is asking whether it’s “too late to buy.” You get in while the story is still forming, and if the company turns out to be the real deal, the payoff can be huge.
That’s why early opportunities are so exciting.
The biggest stock market winners usually don’t wait around for everyone to feel comfortable. By the time a trend is obvious, a lot of the easy money may already have been made.
To wit, in the last two years (since June 2024), Nvidia (NVDA) has risen by 65.5%, a great return for sure. But in the two years before that (from June 2022 to June 2024), before Nvidia was a “sure thing,” it rose 638.9%.
The difference between getting into NVDA early and getting into it after the market had caught on was about 10x.
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Whether we’re talking about artificial intelligence, biotech, cloud software, automation, energy infrastructure or some other emerging growth theme, the most profitable moves often begin when the opportunity still looks a little uncertain.
Of course, that’s also the problem.
The internet is full of stock ideas and, increasingly, the appearance of certainty. Scroll through social media for five minutes and you’ll find someone pounding the table on a “once-in-a-generation, sure-thing” opportunity. Message boards are full of them. Reddit is full of them. YouTube, podcasts, Discord groups, Substack, X—there’s no shortage of people telling you they’ve found the next monster stock.
Some of those ideas may be worth a serious look, but most of them are just noise.
That’s where investors can get into trouble. A good story is not the same thing as a good stock. A stock going up quickly is not the same thing as a company building lasting value. And an online crowd getting excited about a ticker doesn’t necessarily mean there’s a durable investment case behind it. (See GameStop (GME).)
Early-stage investing requires a little enthusiasm, but it also requires a lot of skepticism.
You want to ask basic but important questions. Is the market opportunity real? Is the company actually growing, or is it just telling a good story? Does management have a track record? Is the balance sheet strong enough? Is there a path to profitability? Is the stock already priced like everything has to go perfectly?
None of that guarantees success. High-quality companies can fly under the radar for a long time.
But it does help distinguish promising early opportunities from internet-fueled hype.
In other words, put less emphasis on the “early” part of the equation and more emphasis on the “opportunities” part.
That’s the specialty of Tyler Laundon, Chief Analyst of Cabot Early Opportunities. Tyler’s research-first approach is built around finding companies with real growth potential early in their development or identifying unexplored growth angles in companies that Wall Street already knows.
At the end of the day, getting in early can be financially rewarding, but knowing which early ideas are worth your capital is the harder part, and that’s where the research comes in.
If you’re interested in learning more about Tyler’s research, we’ve got a special promotional offer for new subscribers to Cabot Early Opportunities.
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