Publisher’s Note: Welcome to the first issue of The First Move. Matt McCall is a bonafide innovations expert, relying on masterful intuition to build his career. His impeccable instinct is the whole reason we brought him here.
Innovation investing gets a lot of lip service and not much follow-through, mostly because it means holding a position long before the rest of the market comes around to it. Matt has spent his career doing exactly that.
So we built him a place to do it in the open. The First Move is what the name promises: Matt arriving first on the technologies, and the companies behind them, that he believes will shape the next decade.
The move is yours. Get ready.
– Stephen Prior
Last week the market sent investors one of the most important messages of the year.
Unfortunately, almost nobody noticed.
Instead, investors focused on another rough week for many of the technology stocks that have led this bull market.
The Nasdaq 100 officially slipped into correction territory. The Philadelphia Semiconductor Index remains in a bear market despite bouncing late in the week. And that has led to some of the biggest artificial intelligence winners having been cut in half from their highs.
If those were the only headlines you followed, you’d probably assume the market is falling apart.
The reality couldn’t be more different.
While investors were worrying about yesterday’s winners, the S&P 500 Equal Weight ETF (RSP) – which gives every company in the index the same importance instead of letting the largest companies dominate – quietly climbed to a new all-time high on Tuesday.
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That tells us something incredibly important.
This isn’t a weak market being held up by a handful of mega-cap stocks.
It’s a broad market.
Money is rotating.
Leadership is expanding.
And that’s exactly what healthy bull markets do.
Early in every major bull market, investors crowd into a small group of obvious winners.
Eventually those stocks become expensive, expectations become unrealistic, and money begins looking elsewhere.
Capital doesn’t leave the market. It simply looks for the next opportunity.
That’s exactly what we’re seeing today… rotation.
I don’t believe the rumors and headlines that AI, robotics, quantum computing, or the electrification of our economy has suddenly ended. In fact, I believe we’re still in the early innings of many of these innovative and transformational trends.
But markets never move in straight lines.
The strongest themes often experience painful corrections while investors debate whether the story is over.
We’ve seen it happen with the internet, smartphones, electric vehicles, and countless other innovations.
History suggests those periods often create the best long-term opportunities.
What caught my attention even more last week was what individual investors were doing.
The chart below shows that retail investors sold U.S. technology stocks at the fastest pace on record, surpassing even the panic selling during the COVID crash.
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That surprised me.
Not because tech stocks have been under pressure. After all, corrections happen.
It surprised me because I believe we’re living through one of the greatest innovation cycles in history.
AI is changing nearly every industry. Robotics is beginning to reshape manufacturing. Healthcare is being transformed by AI-powered drug discovery and diagnostics. The electrical grid is undergoing one of the largest infrastructure upgrades in decades. Autonomous systems are becoming reality. And entirely new industries are emerging that barely existed five years ago.
Yet investors are acting as though innovation itself has suddenly stopped.
I don’t see it that way.
One of the lessons I’ve learned over nearly three decades of investing is that the biggest returns rarely come from buying what’s comfortable. They come from recognizing when great long-term trends temporarily fall out of favor.
That’s exactly why I created The First Move.
Every day we’re going to focus on where innovation is headed, not where it has already been.
We’ll look beyond the headlines, beyond the day-to-day volatility, and concentrate on the technologies and companies that I believe can create enormous value over the coming years.
Sometimes that will mean buying strength.
Sometimes it will mean buying fear.
But it will always mean thinking several years ahead instead of several days.
The market will always find reasons to worry.
But innovation never stops.
I believe investors who position themselves before the crowd, not after it, have the greatest opportunity to build meaningful wealth over time.
Welcome to The First Move. You just made it.
I’m excited to have you with me.
P.S. Let me ask you something… What’s one innovation stock you think is positioned to succeed, right under the market’s nose? Reply to this email with the ticker.
