How to spot tomorrow’s big stocks today

Technological advances have transformed our day-to-day lives – and made fortunes for sharp-eyed investors. But how do you spot future innovators? Dr Mike Tubbs investigates.

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Driving force: electric cars will drive your portfolio higher
(Image credit: Ingo Barenschee)

In the last 100 years, technological innovation has changed our lives radically. It has also made canny investors very rich. For example, if you had invested £1,000 into each of the "FAANG" tech stocks Facebook, Amazon, Apple, Netflix and Google (now Alphabet) at the end of January 2013, you'd have turned £5,000 into £33,300 just five years later. But how can you spot big success stories before they break? I worked for both Battelle and Xerox many years ago and met multimillionaires in the US who had made their money by taking out second mortgages to invest in Xerox shares based on the potential of the xerographic technology developed for Xerox by the Battelle laboratories. I wouldn't suggest going that far but if we look at the history of innovative firms, we can develop guidelines for spotting future innovators.

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Dr Mike Tubbs

Highly qualified (BSc PhD CPhys FInstP MIoD) expert in R&D management, business improvement and investment analysis, Dr Mike Tubbs worked for decades on the 'inside' of corporate giants such as Xerox, Battelle and Lucas. Working in the research and development departments, he learnt what became the key to his investing; knowledge which gave him a unique perspective on the stock markets.

Dr Tubbs went on to create the R&D Scorecard which was presented annually to the Department of Trade & Industry and the European Commission. It was a guide for European businesses on how to improve prospects using correctly applied research and development. He has been a contributor to MoneyWeek for many years, with a particular focus on R&D-driven growth companies.