The Big Lie That Keeps Many Investors Poor

You most definitely do not have to buy stocks with these risky traits to make big returns.

To prove it, let’s flip this on its head. A safe stock should be the opposite of a risky one. It should be cheap, big, stable, and pay a dividend.

Few companies fit the bill better than Disney (DIS)—a stock I’ve been recommending since July 2018. You can read the most recent investment case here.

To recap, Disney is a huge company—bigger than McDonald's (MCD), Wells Fargo (WFC), and Goldman Sachs (GS).

Its stock traded at just 15-times earnings, which was cheaper than the average US stock.

Disney’s stock price is stable. It pays a reliable dividend in the neighborhood of 2%. And it has increased its dividend by 21% per year, on average, over the past five years.

No Reasonable Person Could Call Disney (DIS) “Risky”

By any definition, Disney stock is safe.

Yet it recently leapt 30% in just four weeks:

(Click on image to enlarge)

Source: RiskHedge

And since the fall of 2016, its stock has gained 52%—far better than the S&P’s 36% gain.

This combination is possible because Disney is a disruptor stock.

The big leap in Disney’s stock price came when it unveiled details of its disruptive new streaming project that’s threatening Netflix.

I’ll give you another recent example of a safe stock exploding higher.

Like Disney, Qualcomm (QCOM) Is Very Safe, and Yet…

I first wrote about computer chip giant Qualcomm (QCOM) late last fall, telling readers it was a “buy.”

Even I was surprised when it rocketed 55% in two weeks recently, following news of a favorable legal settlement.

(Click on image to enlarge)

Like Disney, Qualcomm is big. Bigger than Starbucks (SBUX), American Express (AXP), and Lockheed Martin (LMT).

Its stock isn’t quite as cheap as Disney’s. But at 15-times next year’s earnings, its valuation is reasonable.

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