5 investments that turned $ 50,000 into $ 1 million (or more) in 2 years
Over the past 14 months, investors have benefited from the strongest rebound in bear market history. After losing 34% of its value in just 33 calendar days during the first quarter of 2020, the much followed S&P 500 has recouped all its losses and reached new heights. All in all, the S&P 500 is up 44.4% over the past two years, which is a fantastic return that is well above its long-term average.
But for some investors, a 44% return would be nothing but peanuts. People who had the foresight, guts, and luck to invest $ 50,000 in one of the following five names two years ago now comfortably call themselves millionaires.
GameStop: $ 1.12 million
It was the stock of memes that started it all. Video games and accessories retailer GameStop (NYSE: GME) has managed to hold onto most of its gains from the start of this year and as a result has returned over 2,100% in the past 24 months. This means that a $ 50,000 investment in mid-May 2019 is now worth just over $ 1.1 million.
Starting in mid-January, retail investors from Reddit and other social platforms began to band together to buy stocks and out-of-the-money call options in stocks with short interest rates. very high term. The purpose of these groups has always been to perform a short squeeze – an event where pessimists feel trapped and rush for the exit at the same time. During GameStop’s short squeeze earlier this year, stocks have catapulted from around $ 20 to almost $ 500 in a matter of days.
While GameStop was able to enrich its balance sheet with a recent stock offering, which will provide more than enough capital to oversee its ongoing transition to digital gaming, it still faces two major challenges. First, his management team has waited too long to start making the switch to digital gaming. This means that GameStop’s physical operations will remain a drag for years to come.
The other concern is that GameStop doesn’t have the right recipe for always being a short contender. Its short interest has fallen dramatically since mid-January, and its higher average daily trading volume makes pessimists unlikely to feel trapped. In short, GameStop is seriously lacking in catalysts after its ramp-up.
Cardano: $ 1.15 million
It’s no surprise that a number of cryptocurrencies have run absolute circles around the benchmark S&P 500. While all attention is on Bitcoin and Ethereum, Cardano (CRYPTO: ADA) was a real outperformer. In fact, Cardano’s 2199% gain over the past two years has more than quadrupled Bitcoin’s return over the same period.
While I admit to being baffled by the ratings placed on digital currencies, at least Cardano enthusiasts have reason to be excited. This is because this decentralized platform has a lot of development going on. For example, last summer the developers rolled out an upgrade known as Shelley, which increased the number of nodes network participants can run (i.e., improved decentralization of the network). Shortly after this upgrade took effect, Cardano went from an average of less than 2,000 transactions per day to well over 30,000 transactions per day last year. This is a positive sign of adoption.
Equally exciting is the development of Goguen, which integrates smart contracts into the blockchain. Smart contracts are protocols that help facilitate, verify and enforce contracts negotiated between parties. If the name rings a bell, it’s because smart contracts are what made Ethereum so popular.
Cardano may even be a featured investment vehicle by Grayscale, in the same way that Grayscale has a trust in Bitcoin. The big question is: will these catalysts prove to be sustainable? To that end, I’m not entirely sure.
Takung Art: $ 1.52 million
Sometimes investors have to think small to win big. Once a dime, Takung Art (NYSEMKT: TKAT) has been one of the top performers over the past 24 months, recording gains of over 2,900%. If you had invested $ 50,000 by mid-May 2019, you would be sitting on over $ 1.5 million today.
Most of Takung’s massive gains have occurred since the start of the year. This advantage has been fueled by the rise of non-fungible tokens, or NFTs. An NFT is a digital certificate of ownership placed on digital assets stored on the blockchain in an immutable and transparent manner. In short, it declares that someone is the true and rightful owner of a digital asset.
Takung is an online platform that allows artists and art dealers to sell or trade works of art. Keep in mind that when I talk about artwork, I am referring to everything from traditional paintings to items like sculpture and even jewelry. With an online platform already in place, investors speculate that it would be easy for Takung to add NFTs.
The concern here is that this rise was based entirely on speculation. Takung Art has not said anything about entering the NFT space, and its revenue has been falling relatively steadily for the past five years. The company didn’t even hit $ 4.6 million in sales last year after grossing more than that in a single quarter in 2016. Suffice it to say, this gain seems unsustainable.
Chainlink: $ 2.26 million
One of the strongest investments in the past 24 months is cryptocurrency under the radar Chain link (CRYPTO: LINK). Investors who bought Chainlink for $ 50,000 in mid-May 2019 for less than $ 1 appreciate its current price north of $ 43. This return of over 4,400% would have turned $ 50,000 into $ 2.26 million.
What investors seem to like about Chainlink is the interesting approach by developers to further decentralize blockchain networks. On the traditional blockchain, sensors are configured to monitor and relay information to and from the blockchain. However, these sensors, called oracles, are centralized, and therefore considered to be the weakest link in blockchain networks. Chainlink created the first blockchain oracle network, which verifies oracle authenticity and reconciles incorrect data (which cannot be corrected on some blockchains), all using smart contracts.
Additionally, Chainlink’s blockchain is able to reconcile data from multiple and unique sources to determine what is accurate and what can be rejected. It’s a fancy way of saying that users can rest assured that smart contract data is accurate and trustworthy.
As is the case with most digital currencies, investors seem genuinely excited. However, it is unclear how broad the adoption of this technology will be in the short term.
Dogecoin: $ 7.91 million
Finally, there is the cryptocurrency based on Shiba Inu. Dogecoin (CRYPTO: DOGE), which has been by far the best performing asset over the past two years. An investment of $ 50,000 in Dogecoin 24 months ago would be worth $ 7.91 million today, which equates to a return of 15,720%. This is a return 31 times higher than that of Bitcoin over the same period.
Dogecoin’s massive gains came on the heels of support from You’re here CEO Elon Musk. Musk recently announced that he is working with the developers of Dogecoin to improve the efficiency of the blockchain. He also proclaimed himself the “Dogefather” and promoted Doge on Twitter several times.
But of all these outperforming investments, none are more dangerous than Dogecoin. This is because his earnings were built on hype, ignorance, and misinformation. Supporters regularly tout its lower transaction fees and growing adoption as reasons for optimism. Still, look beyond Bitcoin and Ethereum and you’ll find Dogecoin’s transaction fees aren’t that low, nor its network so efficient. Likewise, the 50,000 transactions it handles daily don’t even pass the needle by traditional payment facilitators.
It’s also not a particularly popular token with businesses. Only around 1,300 businesses worldwide will accept it as a payment method – and it took eight years to reach that level.
With Elon Musk’s tweets representing Dogecoin’s biggest catalyst, you know you are considering a pump and dump system. Despite its massive gains, Dogecoin should be avoided at all costs.
This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a premium Motley Fool consulting service. We are motley! Questioning an investment thesis – even one of our own – helps us all to think critically about investing and make decisions that help us become smarter, happier, and richer.