A little over nine years ago something odd was happening.

It was the functional equivalent of going to the ATM, withdrawing $600, and lighting it on fire.

It didn’t make any sense to most observers.

However, the lessons learned back then reveal a lot about investing in the current economy.

Smaller Pies and Bigger Pieces

Earlier this week we talked about how the Fed’s policies could make you rich.

We explored how they weren't going to create many opportunities.

In fact, by taking the Japanese route of keeping interest rates low and actively sabotaging genuine economic growth, they were making it far harder than it needs to be.

Ultra-low interest rates are great at encouraging borrowing and inflating asset prices, but they’re not so great at sparking much economic growth.

As a result, there will be no rising tide to lift all boats. There’s no bigger pie. And you will have to invest differently.

One of the best examples of the way you will be forced to invest if you want do well comes from the story I led with up top...

Lighting $600 on fire.

What I was referring to was the launch of the iPhone.

That summer in 2007 was certainly an interesting time.

People waited in line for hours and hours to get their hands on the first iPhones.

A few of them went home, took out a hammer, and smashed them to pieces to see what was inside.

There weren’t many surprises on the inside though.

Many of the chips that made the first true “smartphone” work sported familiar logos.

Think of Intel (INTC), Texas Instruments (TXN), and Broadcom.

They were all in there.

However, there were also a few gems few had ever heard of before.

One of those was Skyworks Solutions (SWKS).

Skyworks was about a $2 billion company at the time.

It focused largely on analog processors instead of the digital processors you’ve heard far more about.

At the risk of oversimplifying, an analog processor is necessary for the efficient and cost effective communication of most wireless devices.

If you look at your home wifi router and all the devices connected to it, it’s analog processors doing all the communications work.

It’s a different market, but as the number of connected devices grew, so would demand for the specialty products provided by Skyworks and a few others.

Few saw the potential at the time.

The Washington Post reported at the time of the iPhone’s launch:

Apple itself has set a target of selling 10 million units worldwide by 2008, gaining roughly a 1 percent share of the cell phone market.

That’s pretty much ancient history.

Apple (AAPL) sold 51 million iPhones in the first quarter of this year and it was a disappointment.

However, the example does show the potential of true growth investments during periods of slow overall economic growth.

In this case, U.S. GDP grew about 15% between the iPhone’s launch and today.

Shares of Skyworks have climbed more than 900% over that same time period and it’s now a $13 billion company.

Of course, however good an example this may be, it’s a past example.

That’s why next time we get together we’ll look into the next opportunity like this and how to invest in it right now.

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