Sleuthing out Shah Gilani’s W.F.H. “Hyperdrive” Stocks?

What are those five "work from home" stocks that Gilani sees as having "big CAGRs?"

By Travis Johnson, Stock Gumshoe, September 7, 2021

This article was originally published on November 20 of last year, but there’s a new push from Shah Gilani for this service, using essentially the identical teaser ad, and I continue to get tons of questions about it… so we’re re-posting it for you today. It has not been updated or revised since it was posted 10 months ago… but I’ll post a little update at the end.

I’ve gotten a few reader questions about this new pitch from Shah Gilani over at Money Map Press, and we haven’t covered any of his teaser pitches in a long time so it seems like we’re due to take a look. He’s selling charter memberships to something he calls the Hyperdrive Portfolio, with his goal being to “build a portfolio that triples in value over the next 18 months.”

So that’s certainly ambitious — and it’s an expensive subscription, $1,750 a year, though they do say that they’ll offer refunds if they fail to meet their “performance guarantee” (which means, only after the full year is up, and only if they did not “triple your money on at least 10 hyperdrive stocks,” so it may be like pulling teeth — but that’s at least a little better than the “no refunds ever” folks).

And what are those “Hyperdrive” stocks? Well, we get some hints dropped along the way so we’ll try to feed those to the Thinkolator for you and get some names, but they’re basically the “work from home” stocks that have soared this year in the wake of the COVID-19 pandemic and office shutdowns. He compares the growth here to past surges in things like streaming video (Netflix), e-commerce (Amazon) or mobility (Apple), among other things.

Here’s a little taste from the ad…

“This time around, it isn’t consumer technology or a new device or a new way to watch TV – it’s a total upheaval of the American workforce – the movement from office space to virtual space….

“We saw the beginning of this movement a few months ago as businesses shut down.

“Companies scrambled to onboard their employees to Zoom and hustled to make sure everyone had a reliable working desktop….

“But now we’re witnessing something different – the realization that working from home is not temporary but permanent. It is the new status quo.

“Just last week, Microsoft announced their employees can work from home… FOREVER.”

That announcement from Microsoft came on October 9, so that’s no longer quite “last week,” but close enough, (this ad is dated “November 2020,” and I saw it for the first time on Wednesday).

So this sums up the big picture argument:

“My prediction? The total transformation of the American workforce is here to stay.

“It’s Going to Be One of the Biggest Capital Waves in History…

“And the Greatest Buying Opportunity You May Ever See.

“My analysis shows $353 billion of wealth being created in a very short time frame.

“But it’s not just going into any stock.

“It’s piling into five specific tech companies over the next 18 months alone.

“The ones with the largest CAGR, or compound annual growth rate.”

He puts a lot of weight on this “CAGR” idea, probably largely because most novice investors might not have heard the term. He basically says that in this “hyperdrive” moment, those big CAGR numbers from growing companies will be exaggerated in the stock price…

“Typically, a 10% CAGR translates to an equal movement in share price. CAGR of 10%? That stock will probably go up 10%.

“But add the power of a hyperdrive situation and that changes.

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“In the Fastest-Moving Hyperdrive Situations, a 10% CAGR Could Translate into a 100% Share Price Movement…”

To which I might ask, “A CAGR in what, exactly?” But more on that in a moment.

He provides some examples, too, like Apple (AAPL):

“I’m sure you know Apple has been one of the most successful stocks in history.

“Well, look at one of their biggest hyperdrive periods – between May 2016 and September 2020. Across that time frame, their CAGR was 49%….

“The result? A 460% stock surge over that same period.”

CAGR is just a calculation you get from putting the beginning value, the ending value, and the time period into a formula. Apple did not have any financial metrics (earnings, revenue, etc.) that grew at a 49% CAGR from 2016-2020, as far as I can tell, but the AAPL share price did have a compound annual growth rate of about 50% for those three and a half years, and a total return in the 400-450% range depending on which days you choose in May and September of those years. Forecasting that a particular CAGR for the share price over a set length of time means a specific rise in the share price is just math, not so different than saying that two plus two will equal four.

So yes, saying that Netflix rose by 800% in value over 3-1/2 years and that it had a CAGR of 85% are just two ways of expressing the same thing, so from what I can tell it’s just a way to use a highfalutin’ term like CAGR to make yourself look wise and prescient. Or to impress those who don’t understand what “compound return” means.

He gives a few more of those, too, and the splashy graphics make it sound pretty and perfect with near 10:1 ratios for other big growers like Tesla (89% CAGR for 3-1/2 years, 860% share price return) and Netflix (85% CAGR for 3-1/2 years, 800% return)… but we should be careful about assuming any 10:1 reasoning here. Posting a 10% CAGR in an investment for a few years does not mean you automatically have your share price rise by 100% in some magical way… a 10% CAGR for three years translates into a 33% total return —