An investor who got in early on a small tech stock that's earned 110% this year shares the book that helps him spot explosive companies - and explains how it's changed his worldview

Invesco

• Ronald Zibelli, portfolio manager of the Invesco Oppenheimer Discovery Mid Cap Growth Fund, has outperformed most of his peers over the past year due to several well-timed bets.
• They include RingCentral, a cloud communications company whose stock price has more than doubled in the last 12 months.
• In a recent exclusive interview, Zibelli shared with Business Insider the recently published book that has contributed to his understanding of the most disruptive technologies and the companies leading them.
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Active fund managers live and die by their stock picks.

And so, it's a huge win when a single company's stock price doubles in a short period of time like RingCentral's has this year.

The cloud communications provider is just one of the explosive software companies that Ron Zibelli is invested in. The portfolio manager of the $22 billion Invesco Oppenheimer Discovery Mid Cap Growth Fund also owns companies like CoStar Group (up 76% year-to-date) and Synopsys (up 62%).

These aren't major household brands because Zibelli's focus is on the small- and mid-cap universe, where the risks are greater but the payoffs can also be huge.

All told, his fund has gained 30% over the past year, placing it in the 93rd percentile among its peer group according to Bloomberg data.

His success does not only stem from sheer luck. During a recent interview with Business Insider, Zibelli discussed how he finds "premier growth" stocks by hunting for companies with industry dominance, sustainable competitive advantages, and time-tested leaders.

Read more: A fund manager who's averaged a 16% annual return since the financial crisis shares his 'secret weapon' - and unpacks 3 stocks driving his success

He also shared one book that has helped his process: "The Fourth Industrial Revolution." The book was published in 2017 and written by Klaus Schwab, the founder and executive chairman of the World Economic Forum.

It is widely believed that humanity has lived through three industrial revolutions.

First came the advent of steam power in the 18th century.

Secondly, mass production enabled the industries that brought us electricity, steel, and other technologies that defined the 19th century.

Thirdly, the invention of the semiconductor, personal computing, and the internet all changed the world in the 20th century.

And now, Schwab believes we're going through a fourth industrial revolution. Here's how he described it in a blog post:

"The possibilities of billions of people connected by mobile devices, with unprecedented processing power, storage capacity, and access to knowledge, are unlimited. And these possibilities will be multiplied by emerging technology breakthroughs in fields such as artificial intelligence, robotics, the Internet of Things, autonomous vehicles, 3-D printing, nanotechnology, biotechnology, materials science, energy storage, and quantum computing."

He further told Business Insider's Sara Silverstein in an interview earlier this year that these technologies will fundamentally change business models, economies, societies, politics, and so on.

How Schwab's thesis helps investors

So what did Zibelli learn from Schwab's thesis on the fourth industrial revolution?

He said the book helped him understand how these technologies are quickly sweeping the globe, and "how extremely important it is to understand what's going on with disruptive innovation and technological advancement to be able to succeed in the investment arena."

If the hype about the fourth industrial revolution is true, then technologies like AI could be game changers like the ones that preceded it.

For context, skyscrapers and the rail industry would probably not exist without steel, while the world's most valuable companies today - which are mostly software-related - would not have blossomed without the internet.

Zibelli hopes to identify stocks at the forefront of the next industrial revolution - first by understanding what this revolution is all about from the man who tied it all together.

"We are of the mind that there's a small number of companies that will generate disproportionate returns for investors - and we're all about finding those," Zibelli said.