How John Deere Led To My 11 Shocking Predictions For 2014
Innovation is the most powerful force an investor can harness.
It supercharges companies and helps them deliver outsized results.
By using a relatively small allocation of your equity portfolio’s assets, you can effectively capture these returns and have the potential to build greater wealth at what I believe to be the least amount of risk and the least amount of effort.
Lots of companies can execute. Solid execution achieves predictable cash flows and solid dividends. That’s admirable. But it will not move the needle on your portfolio — it will merely add an income stream.
My mission as editor of Game-Changing Stocks is to deliver these game-changers to my subscribers. I spend all my time getting to know companies like Google and considering which companies might be on to The Next Big Thing.
For instance, in 2009 I told subscribers of my premium newsletter that there would be a big move in nanotechnology. In the months that followed, our nanotech pick shot up 293%.
Today, I’d like to share with you the story of one of the very first game-changers. And while it might not be as exciting as some of the innovative companies I regularly cover — believe me, it’s still a pioneer in its field.
One Of The First American Game-Changers
The fact is, he didn’t really need the money.
Though he was young, he had a good trade and made a good living. His rural Vermont customers respected him, and he had more orders than he could fill.
In New England in the early 19th century, this was what affluence looked like. But for a twist of fate, that might have been the end of the story…
When, unexpectedly, the economy took a turn, and the 32-year-old blacksmith found himself headed west to seek a new opportunity. He landed in Grand Detour, Ill., and set up shop.
Right away, the farmers he’d traveled with from back east found trouble. Their plows simply didn’t work. Dull iron blades did fine in New England dirt, which was sandy, but the rich black dirt in the Midwest stuck to the heavy-bottom plows like cake batter.
So the blacksmith threw out the old “eastern plow” and designed a new model, curved on the bottom and built not from iron but from highly polished steel sawmill blade. The locals hooted. Then they saw it in action. The new plow — lighter and more agile — not only did a better job but did it much quicker.
John Deere had a hit.
He didn’t stop. He made plows as fast as he could (they sold like hotcakes), and he refined the design constantly, once changing specifications for a plow 10 times in one year. His son came aboard, and the company expanded into other types of plows and other implements, always delivering a faster, more efficient way of planting and harvesting crops.
Deere & Co. (NYSE: DE) equipment, painted in its familiar green, is still the gold standard on the farm. To this day, the company still can’t turn out equipment fast enough. Even if you have $400,000 — the base price of Deere’s latest combine — the waiting list could be a year or more, according to the Deere representative I checked with.
What is the value of such innovation? During just the past 10 years, this innovator has outperformed the S&P 500 by a factor of six.
Even though Deere & Co. was founded in 1837, you can easily see that the innovations it continues to make have paid off to this day.
But this example of one of history’s most influential innovators isn’t just an interesting story. It’s a playbook for literally millions of dollars in alpha for YOUR portfolio. You see, I believe that by knowing history, we’re better prepared to capitalize when it repeats itself.
In fact, I used examples like these as the basis for my newest report “The 11 Most Shocking Investment Predictions for 2014…” which has just been released. In it, I talk about Apple’s next breakthrough… George W. Bush’s private millionaire stock market… a tiny company that could kill the gasoline engine and more… To find out about what may be some of my best ideas yet, click here.