Smart Money Monday - What’s My #1 Wealth Accelerator?

[Read this article on our website.]( [Smart Money Monday]  You are receiving these email messages every Monday because you requested information from Mauldin Economics. If you'd prefer not to receive Smart Money Monday, [click here.]( Dec 13, 2021 What's My #1 Wealth Accelerator? By now, most of you know what my favorite type of investment is… A cheap small-cap stock. One with a savvy owner-operator and an imminent catalyst to send its share price exponentially higher. A stock like Franchise Group (FRG), which has climbed 61% since I recommended it here in July. It’s popped 19% in the last month alone, and I expect it to keep climbing. I call these stocks “Wealth Accelerators,” because they can turbocharge the returns of your entire portfolio. - Many of you have asked to hear more about Wealth Accelerators since I revealed key details about them in [this video with John Mauldin](. Let’s start with how to use them in your portfolio. Wealth Accelerators are individual stocks meant to juice your returns. I’ll give you an example… Say you had $100,000 to invest in the stock market 20 years ago. A friend told you to “buy the market.” So, you put it all in an S&P 500 index fund and held on. You’d probably be pretty happy with the results. After all, the S&P has returned 613% over the last two decades. Which means you now have $713,370. Not bad. Now, imagine that instead of putting all that money in an index fund, you only put in 90%. And you put the other 10% in Wealth Accelerators. Some of them performed as well as you expected, some did a little worse, and some shot to the moon. Overall, your Wealth Accelerators returned 20% annually. And you did 324% better than you would have without them. So, you have $1,025,408—or $312,038 more than you’d have without Wealth Accelerators. In other words, allocating just a little bit of money to quality, handpicked stocks significantly enhanced your wealth. You don’t want to bet the farm on Wealth Accelerators. But when you pick the right ones (which is much easier when an experienced analyst has your back) they boost your returns quite a bit. I get into this more in [my presentation with John](—if you haven’t watched it yet, I encourage you to [check it out](. - “What should I look for in a Wealth Accelerator?” Four key features… First, you want a smaller company—I focus on stocks with market caps of $5 billion or less. As a general rule, they have more room (and drive) to grow. Larger companies are often content to grow 3–5% a year. And that’s fine—they’re mature companies. But we are looking for higher growth small caps, like Franchise Group, which is growing 40–50% a year through smart acquisitions. Second, you want insiders with skin in the game. When the people running the company have a personal financial stake, they want what you want: a successful company with a rising stock price. You see this with companies like Amazon (AMZN), where Jeff Bezos still owns 14% of shares. Or Tesla (TSLA), where Elon Musk owns 23%. They both started as smaller companies with heavily invested owner-operators. This is a key feature of Wealth Accelerators—you can hear more about how it plays into my strategy by [watching my presentation](. Third, the stock needs to be cheap. There’s no sense buying a high-growth stock if the market already values it as a high-growth stock. So, we look for stocks that are undervalued. I don’t buy unless I know I’m getting a bargain. And finally, a Wealth Accelerator needs to have little to no debt. Debt can wipe out a company (and its shareholders). There are plenty of lower-risk opportunities in conservatively financed companies. Without a clean balance sheet, it can’t be a Wealth Accelerator. - “Why are more of these opportunities popping up now?” For a simple reason: Fewer people are looking at them. Wall Street has fundamentally changed in the past few years. There are fewer analysts, and they’re actively managing less money. It’s all robots and algorithms. That means there’s more opportunity for investors who know how to dig into these companies, analyze the financials, and determine what they’re really worth—or have access to an analyst who does that for them. - “What’s your top Wealth Accelerator right now?” It just so happens, [I shared my #1 Wealth Accelerator, including the ticker](, in my recent presentation with John Mauldin. It has all the ingredients we just covered. It’s a small, fast-growing company with a clean balance sheet. And it’s dirt cheap. It also has strong insider ownership—they own nearly 6% of the company. Even better, insiders bought a good chunk of that this year. And there’s only one reason insiders buy: They think the stock will go up. Again, anyone who’s serious about ramping up their returns should devote a small portion of their portfolio to Wealth Accelerators. The easiest way to get started is to [watch this video]( where I share some of my latest research, including my top Wealth Accelerator pick today. [Click here to watch and get the ticker now.]( Thanks for reading, [Thompson Clark] —Thompson Clark Editor, Smart Money Monday [Thompson Clark]Thompson Clark is a small-cap expert and value-focused investor with nearly a decade of experience in financial publishing. Thompson graduated from the Goizueta Business School at Emory University in 2010 with a focus in finance and accounting. He lives in North Carolina. He is the editor of Mauldin Economics’ free research service, [Smart Money Monday](. Don't let friends miss this timely insight— share it with your network now. 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