Steve McDonald: Hi, everybody, I'm Steve McDonald. This is your Market Wake-Up Call. Our guest this week is the Editor of The VIPER Alert, Matthew Carr. He’s here to talk about small caps, tech stocks and where this market’s going from here. Welcome, Matthew. Matthew Carr: Hey, thanks for having me, Steve. Steve McDonald: It’s my pleasure. Okay, small cap and tech stocks have been leading this rally, and it’s quite a rally. Can you talk about why, what’s functioning there and what’s left in this rally? Matthew Carr: Sure. The first thing I do is remind investors, “It’s the economy, stupid.”  When you look at what’s driving the S&P 500 and the Russell 2000, it’s companies like Autodesk, Intuitive Surgical, Skyworks Solutions, RAM Research and Applied Optoelectronics. These are semiconductor systems and automation companies - and that has to do with the new economy. You know, we passed through a tipping point a few years ago, and it’s just really starting to pick up speed. Things like e-commerce, mobile commerce, the Internet of Things, artificial intelligence, machine learning, automation, and cloud computing and services have all started to take over. And we already know that e-commerce - online retail like Amazon - is killing brick-and-mortars. Steve McDonald: Right. Matthew Carr: And at the same time, the biggest driver is automation... the rise of robots. And even autonomous vehicles - everyone’s getting in on that. But it’s more than just passenger cars. We're talking about mining companies and big pieces of mining equipment that have gone driverless and autonomous. And companies like Komatsu and Caterpillar are really banking on that. So, you know, the list can go on and on and on, but the fact of the matter is that this is the new economy - this digital world - and that needs semiconductors and operating systems, and that’s why you see tech stocks fueling this rally. Because these are the companies that are enabling businesses to actually do what they need to do to make money. Steve McDonald: Alright, yeah, and I couldn’t agree more. You're absolutely right. Techs, small or large, do drive these rallies - but everybody loves them when they're running up, though when they're going down, nobody loves them. And these things can be volatile. Is there any way that our readers, our Members, can turn this volatility in their favor? Matthew Carr: Well, most people know that I'm a big fan of volatility. It’s one of the easiest ways to snag shares of great companies at really attractive prices. So all of my investment strategies are always looking for companies that offer exceptional growth, but we're able to get them at great values. Now, small caps, and specifically small cap tech stocks, offer the best of both worlds here because they are volatile. In my VIPER portfolio, these are the companies that we targeted, and the system looks for companies that are growing earnings, income and revenue 25% or more year over year, but are also trading below their 52-week highs and are also trading at a value to future growth. So, you know, I developed an equation that just kind of plugs in there to find these companies, but it’s really simple and it’s pretty basic. The system creates a VIPER Score, or a V Score, that takes all those elements - earnings, income, revenue, profits - and combines them to create the company’s prospects on a scale of zero to 100. And the closer it is to 100, the better; the closer it is to zero... those are garbage companies. So we don’t want to invest in those. Steve McDonald: Right. Matthew Carr: So I'll just give you a couple examples with the company Control4 that appeared in the system at the end of last September. Control4 is a maker of smart home products. It has these devices that control all the elements in a home. But when the system alerted me to Control4, it had a V Score, a VIPER Score, of just over 97. Steve McDonald: Hmm. Matthew Carr: We're now up 76% on our shares since then. Steve McDonald: Wow. Matthew Carr: Brooks Automation is another company - and Brooks Automation is a company that I like in this new economy because not only is it semiconductor-focused but it’s also on the life sciences side. Semiconductor companies and biotech and pharmaceutical companies require the same equipment, and that’s what Brooks Automation supplies. Well, when, at the end of December, you know, the VIPER System alerted me to it, it had a V Score of just under 82. We're up 63% since then. Steve McDonald: This V Score is really interesting. Let me jump ahead, here. You have been the leading stock picker at The Oxford Club. You've had the biggest returns of all of us for several years now, some really crazy big returns - I mean, in the thousands of percent. Do you see similar returns coming out of this rally, and how much do you think is left in this one? Matthew Carr: Well, first off, I still think there’s plenty left in this rally, especially on the tech side. I think we have plenty of great opportunities, and I do believe that investors have a chance to just grow some really big gains in the months and even the year ahead. Last year, I wrote the two things that investors should look for in 2017 to focus on - Internet of Things and artificial intelligence. Those companies are killing it. Steve McDonald: Yeah. Matthew Carr: But I think there’s plenty more room for them to run, because they're starting to spread to a lot of other industries. At the same time, I still love data protection companies - cybersecurity companies. You already saw that, with WannaCry, the ransomware attack, you know, how widespread this can be. More and more people are getting connected to the internet. More and more companies are getting connected to the internet. More and more just everyday items are getting connected to the internet. So that has to be a No. 1 priority. And I'm still a huge fan of online retail, and not just in the United States. We can look at countries like India and China where their e-commerce sectors are growing faster than the U.S.’s, and that’s because of their surging growth in the middle class. So there’s a lot to still bank on. Steve McDonald: So it’s AI, it’s automation, it’s systems, it’s tech, and you say there’s a ton more to come. Matthew Carr: Yeah. This is the new economy. This is where all the growth is taking place, mainly for the next decade. [Laughter] Steve McDonald: That’s fantastic. Matthew, I want to thank you so much for coming in. Matthew Carr: Alright, thank you for having me, Steve. Steve McDonald: It’s my pleasure, and for everybody here at the Market Wake-Up Call, I'm Steve McDonald, thanks so much for being a part of this. We'll see you next week. [End of Audio]