Biggest Stock Market Gains in 2021 Will Be…
America 2.0, crypto, cannabis, TSLA…
These stocks are on FIRE!
And we know, when you see stocks go up like this, people get nervous. They think we’ve hit a top.
But rest assured.
Our stocks are rising because they are America 2.0. This new world opens the door for significant growth and value for you.
And we have no doubt that these stocks are going to keep going UP. See why here:
Focus on America 2.0 Stocks in 2021
America 2.0 stocks are on fire. Crypto is on fire. Cannabis is on fire. Tesla is on fire. It’s all going the right direction. Somewhat perversely, people are afraid it’s all going to come crashing down. Let’s just start with that general theme.
We were prepping for this and we have to admit it we understand the nervousness out there.
It can be just as nerve-wracking when things are going up fast as when things are crashing and you don’t know what’s going on with that too. There is so much money out there that’s just sitting in bank accounts and money markets.
That’s being put into all kinds of investments. Then you have things like Apple and Microsoft that are trillion-dollar companies. If 1% of that gets sold off, that money can bump up an entire small sector like 3D printing or marijuana. When you see these big rises, it’s not the same as seeing the S&P 500 go up 100% in a few months.
It’s way more of a stock-to-stock basis. The smaller the company, the easier it is to push the stock up to what seems like too much.
We saw, for example, a stock called Plug Power that used to be in one of our services. We cashed out with a 1,100% gain. That means if we put $1,000 in, you took $11,000 out. This stock did a deal with a South Korean company. The stock was trading around $35.
The deal with the South Korean company was for a 10% stake, approximately, under market at about $30. The stock is up about 23% today. In other words, people are looking to fill in on all the themes we are invested in across our services at Bold Profits. This one is a new energy stock.
That entire movement from all these America 1.0 stocks, which are still over represented in the stock market, the S&P 500, even the Nasdaq. The people who are invested in the S&P 500 cap-weighted index, it’s just a ho-hum kind of day. 2020 was a good year, it was up 20% or something like that.
However, if you were in our themes, the megatrends, the coming of age of millennials and all these tech megatrends, the Profits Unlimited equal-weighted portfolio was up nearly70% last year in 2020. That’s just continuing. While seeing your stocks rise all the time is a little nerve wracking, we can see little reason why it’s likely to stop. Can you see a reason why?
There’s not really that many big companies out there that are in these trends. It’s a lot of sub-$100 billion, which sounds like a lot of money, but in today’s stock market that’s not that much anymore. The only big one is Tesla that we track closely.
That’s been on fire too. It’s almost $800 billion now.
Tesla is more than one company. It’s an autonomous transportation company, an old-world car company and all the various aspects not talked about like Autopilot, batteries and energy. It’s so many companies all embedded in one. This is the most prominent company that has finally been put in the S&P 500 after so many years.
It’s already the fourth-largest company in there. So very slowly we have America 2.0ification of the S&P 500.
It’s interesting because you don’t see the returns we’re seeing in these mid-cap companies reflected in the indices. It’s because they are so small they don’t have much of a weight if they even are in the S&P 500.
Last year you had all these companies in biotech, ecommerce and things like that that went up hundreds of percent that nobody even still knows about. There’s that beginning rally of people who got in early.
When you see those big rallies in these smaller stocks, most people haven’t even heard of these companies yet. Now, it’s really just been the early buyers getting in. When those companies start to get more name value and start to hit the mainstream, everyone else is going to want to buy in too.
It’s in the midst of so many enormous transitions across every part of our economy. Every part of our economy is in massive transition from products, technologies and services that have been around 30, 40, 50 or 70 years. They have been outdated for a long period of time.
These smaller companies that are layers and layers below the Apples and Microsofts of the stock market, many of them are worth less than a billion. They could go up 30 or 40 times. Relative to the size of these industries today, they would still be kind of small.
Apple is over $2 trillion and if you get someone who takes out 1%, that’s $20 billion. It can be up to 20 different companies’ values just in that small amount of Apple. That’s like we eluded to before as Apple being a Death Star.
All that money is coming out and funding other investments that are higher growth and newer technology.
Many people who are newer to the stock market have no conception of market capitalization. They simply look at the stock price and judge it as high or low. Many people are unaware that Apple is this enormous company that has so much value. For it to double, it would have to become a $4 trillion company.
As wonderful as its products and services are, the only way a company can grow by another $2 trillion is to have amazing new products and services that are sufficiently innovative, new and of benefit to someone who is willing to pay for it, pretty much around the world.
Our Stance on Apple Stock
We have taken a lot of heat in 2020 for being negative on Apple. It did make a new high, taking the markets with it, which makes investors nervous. Apple has tended to mark the peaks of the S&P 500.
When the S&P gets bought it’s also not just Apple driving that. It’s also Amazon or Google that are more future oriented and have future growth ahead. And now Tesla also. So Apple is a beneficiary of that too.
While we are on this topic, I wonder who saw the tweet for Elon that said in the throes of the worst difficulties for Tesla in the ramp up of the Model 3, Elon put in a call to Tim Cook to talk about Apple and Tesla combining or Apple buying Tesla. Elon was ready to throw in the towel and give up.
Tim Cook never called him back. Out of just even mere politeness that message would need to be returned.
At the time, Apple had more than enough cash to make a good offer. It was just a year-and-a-half ago that Tesla was only worth $40 billion. If they wanted to buy Tesla they could have done it and they might be worth $4 trillion at Apple. It’s kind of crazy that he didn’t return the call.
Apple has come out and said they are going to come out with their iCar. However, they are at least 10 years behind. You have to have production facilities, develop the software, get regulators around the world to agree upon this car, the format and specifications.
This is something that’s very hard. Its very different than designing a phone, which is obviously something Apple is experienced with and knows how to do in mass quantity. However, a car is a completely different thing.
The only way to actually drive the production of that is to have a company centered around it. That’s what Tesla focused on and no one else is in a position to do that.
Now there are all these car companies out there which we disbelieve in. People write us and ask about Nio, which seems to be very popular.
Fisker is another. Workhorse.
Lucid is another. But publicly traded, there’s been some speculative money that says Tesla is too high, so they go buy third tier or fourth tier companies. They are speculations in the stock market, but it’s unclear if it will pan out as investments in anything like the way Tesla is.
However, we know people want to chase these speculations. We still think Tesla still has more to go. The stock market seems to continue to move it up. People ask, ‘What’s left?” They are already worth more than all the car companies in the world combined. People consider that a bubble.
So what is left?
Someone sent us a picture of the market cap of Tesla next to all the other car companies combined. This is the hundredth time someone has done that. You are comparing apples to oranges. Tesla is not a car company.
It’s a battery company that is in cars. It’s in new energy in all kinds of things like their solar roof and the Powerwall. They also have the technology where you can store energy in the battery and sell it back to the grid.
So they have that passive income aspect that a lot of people are looking for. It’s multi-industry-crushing technology that they have.
So many times people are wedded to the old version of the industry. They are essentially experts in a previous version of the world. The new industry that Tesla is creating is going to be bigger. It’s going to reduce the cost of transportation significantly.
Its access will be widened. It will be a genuine benefit to society. While many people never think about it, a lot of people are unable to afford a car. They are forced to take various forms of public transportation. They have to walk 20 minutes to go to something that puts them 20 minutes away from somewhere they need to be.
To have access to easy, cheap, convenient transportation is a massive benefit to humanity.
It’s interesting that Tesla cars were seen as a luxury good. The price of those cars is going to drop exponentially over the next five-plus years. To the point where it won’t make sense to get a different kind of car.
Also, it sets people up to be able to use their car as an autotaxi, another form of passive income. You just send out your car to basically do the work of an Uber driver and drive people to where they have to do. You can make money with that when you are just sitting at home.
It takes an asset that, today, largely sits in our driveway and does nothing. It’s a huge capital asset that’s largely very unproductive for most people. It turns it into something where you can send it out and it can help people and you also earn income as a result.
The emergence of robotaxis and autonomous transport is a huge development that most people don’t even consider in the value of Tesla.
The reason we continue to be BOP — bullish, optimistic, positive — on America 2.0 stocks, new world stocks, stocks of these megatrends is because the old way is very limited. It assumes the value is locked into what existed before.
The new way actually opens up far more value and also genuinely provides a benefit to so many people can take advantage of something far fewer people were able to before. By doing that, it can create significant value that is largely going to go to the set of companies we focus on, these America 2.0 companies.
We want to make it clear we are BOP on America 2.0 stocks, stocks of the great megatrends of our time. Some of them are technology stocks. Some of them are consumer stocks related to the coming of age of the millennial generation.
We do think there is an entire group of stocks that is in definitively in great peril. Our friends at ARK Invest have talked about this a little bit.
If you are invested in the stock market, while 2020 was a period where these America 1.0 stocks did get bid up, especially toward the last couple months of the year, these stocks are terribly dangerous.
You will see them decline slowly at first and then suddenly. So we are bullish, optimistic, positive, but only on America 2.0 stocks.
Bitcoin is Rising to $50,000
Bitcoin is almost at $50,000 now. When it does go, it moves. It doesn’t take its time. We were at $10,000 a few months ago. It’s been quite the journey to $40,000.
Gold is the asset that has the highest market cap in the world, followed by Apple and then a series of companies.
Bitcoin is now number 10. It’s now at $731 billion. Gold’s market cap is more than $12 trillion. The world’s stock markets combined are worth about $70 trillion. The crypto market cap as a whole is now up to $1 trillion.
It just broke that yesterday. That was a big deal. Bitcoin is not far off from that, it’s more than $700 billion now.
You know the questions that will come at us. “Well Ian and Paul, you guys got lucky and Bitcoin went up, but what is going to make it go up even more?”
Probably the fact that only a few companies have bought in and we have hundreds to go. Another thing is that only 33 million addresses have Bitcoin in them. On a global scale that’s almost nobody. It’s crazy to think that not that many people own any Bitcoin.
There are roughly 8.5 million addresses with one-one hundredth of a Bitcoin. At this point it’s a little less than $400. So a lot of people have not bought in to Bitcoin at all. People drove it from $1,000 to $20,000 last time.
This time, we have companies with billions and billions of dollars in cash that is constantly losing value. They could put it in Bitcoin, which is a way to maintain buying power essentially.
It was an obscure thing until 2016. There was a lot of hype around it. A bunch of big banks said it was going to fail. A lot of people laughed at it because when something goes from $1,000 to $20,000 it draws a lot of criticism. But recently there has been an overwhelming shift in demand.
There is a company called Grayscale that has now bought in huge. They own around 3% of all the Bitcoin around the world. We always want to look at supply and demand when we invest in anything. That’s good on the surface, but you want to make sure demand can be maintained.
We had the foundation of demand laid during the crash of 2018 when companies like Grayscale started to buy in and the price was steady to going up. It stood the test of the beginning stages where everybody wasn’t sure. Now you see companies buying in like Microstrategy, Grayscale and a few other bigger companies like Square.
The demand right now is much higher than it’s ever been. The price at $700 billion when you are looking at a global asset that anyone can buy, it’s really just scratching the surface. Especially when you compare it with gold that is harder to buy, harder to transport, clumsy in every possible way.
Not many people own physical gold bars. With Bitcoin you own the actual coin digitally. It’s just more accessible and more convenient in every possible way.
Taking a few steps back from that, it is the world’s first digital currency. It is a technology as well as a coin. There is a maximum of 21 million coins that can ever exist. It’s referred to as mining. Unlike the old mining of digging in the ground, this is digital mining.
It uses what are called mining rigs running computer code to solve a puzzle that then verifies who owns what currency and how much. This is what’s referred to as blockchain technology. Of it, at this point something like 18.5 have been mined. Of which, it’s estimated that four million have been lost.
Many people never took this currency very seriously. Some of the earliest miners lost their access to their Bitcoin. Those are presumably gone forever. The actual available Bitcoin seems to be somewhere under 15 million coins, probably as little as 14 million coins.
The demand for it is universal. This Bitcoin currency has gotten attention, sponsorship, trust and belief around the world because there are very few actual currencies that hold their value. People around the world have been desperate for anything that holds any kind of value.
Even with the enormous volatility in Bitcoin, numerous countries around the world reported Bitcoin was a better store of value than the existing sovereign currency. That’s the essence of what Bitcoin is. It’s a digital currency that has been adopted globally as a store of value.
That is continuing to rise because all you need to carry Bitcoin or own Bitcoin is a phone, which is increasingly pervasive across the world. It’s something many people can buy and store. As Ian said, it’s more portable than gold because you can carry it around.
It’s more divisible than gold because it goes out to eight digits. It’s more finite than gold because the absolute number of Bitcoin that can ever be mined is 21 million and gold has a constant increasing supply by about 3% per year. So that’s just backfilling some of it.
In the previous cycle there were no companies interested in it. Grayscale was a very small asset manager with a few hundred million. Now they have $20 billion going into crypto.
It’s amazing. Just a few months ago we were in awe that they had $4 billion. It’s just a vision of how much they have grown recently. They own 3% of all the Bitcoin in the world right now. They are one of the big pioneers that bought in. Now we are seeing that demand spread slowly into other companies.
Like anything else in the market, it’s going to spread slowly and then very quickly. Over the next couple of years we are going to see major companies put millions, if not billions, of dollars at a time into Bitcoin and crypto in general.
Bitcoin 2021 Price Prediction
We think it will hit $115,000 by August. Take it even further, in this bull run it’s going to hit $350,000.
That’s based on a number of models that consider its unlimited supply and potentially unlimited demand and how long it might take for all of that to unfold.
The second thing, which might happen very quickly, is the adoption of Bitcoin by even a fairly small country that might look at it and say they might prefer a finite currency that is divisible and subject to no human manipulation relative to politics or anything like that.
They would adopt Bitcoin and it would start to become the official currency. Many people are very skeptical that this can happen. Nonetheless, effectively countries like Venezuela, Cuba and others are using Bitcoin as their currency.
Argentina is another one. These countries have ridiculous inflation. The people there have found something they can put their money into that will hold the purchasing power of their money. Bitcoin has been a big winner of that. Also, there are some coins out there pegged to the dollar.
We are looking to put together a crypto service to offer our readers. We have an incredible layout of the crypto world we will share with you as we put this crypto service together.
We have a unique view that is already beginning to unfold around stable coins and how the crypto world is forming relative to the financial world that exists. This is going to be an incredible service. Make sure you sign up for our Bold Profits Daily e-letter.
It will keep you up to date on this development. Also, if you are interested in crypto we have exposure to Bitcoin and Ethereum in Profits Unlimited, which is the Bold Profits flagship newsletter.
Bitcoin has jumped from about $10,000 three months ago to nearly $40,000.
There are calls for a bubble from some pessimistic investors.
It can be nerve wracking to watch things go up very quickly. But just to put it in perspective, when Bitcoin broke above its last all-time high which was $1,000, it went straight to $3,000. That was all just retail buyers and it was very speculative.
Now we have way more informed buyers, companies buying in and institutions buying in. So a three times move from the all-time high isn’t out of the question. There’s going to be corrections now and then. We just had a 20% one no one even seemed to notice.
Overall, it looks really good. Don’t be shaken out easily. That’s the key. It can still have quick drops. The key is to not let that phase you.
In fact, it was just last week Bitcoin had gone from $34,000 to $27,000. It happened in the space of a couple hours. That is going to happen. This is a volatile asset. One reason for that is it trades around the world.
There are different currencies being used to measure, monitor and track it. There is also the fact there is no official market making. Anyone could take some amount of money and push the price down if they got in at a very illiquid moment of the day.
Equally, that is going to push a number of trading bots to come in and buy. There is a lot of back and forth. It’s going to be volatile but we believe the direction is up. We are BOP on Bitcoin and crypto in general.
Cannabis Stocks Are Lighting Up!
Once again, cannabis stocks are now truly on fire.
It’s been a wild week. A lot of them have gone straight up in a line. We’ve seen pockets of big buying in these stocks for eight months now. Last May was the first big one where they went up a couple hundred percent. Buying is getting more and more steady and more frequent.
Pot stocks look very good. The ETF we recommend for that is the ETFMG Alternative Harvest ETF (NYSEArca: MJ). It has dozens of marijuana-related companies in it. It’s a great way to invest in one sector with just one stock. In the U.S. especially cannabis sales are through the roof.
Illinois sold more than $1 billion in cannabis in their first-ever year of legalization. That’s just one state and Illinois isn’t that big. There are other places that could see much more than that. $1 billion in your first year is pretty amazing. It shows the future is bright for the sector.
However, it’s important to note that while they say $1 billion, their tracked sales are about $670 million. The reason for the difference is because medical cannabis sales are uncounted in these numbers.
It suggests a total of a little under $230 million in medical cannabis that are uncounted in this. The one thing that is shocking is that Illinois went to legalization very recently.
It was December 2019 really late in the year. It was a rapid adoption. It’s interesting to see.
If you look at these numbers you will see that once the pandemic hits and lockdowns begin, the acceleration in sales growth is tremendous. There is a column called “items sold,” it’s unclear what they mean by items sold.
Nonetheless, they go from 972,000 items sold and by May it spikes to a new high of 989,000. Then it goes to 1.2 million. By yearend, it’s at 1.9 million. The other shocking thing about this is the states that have legalization are clearly seeing people from out of state coming to buy.
Illinois’ out-of-state sales were at nearly $23.4 million.
Another thing to factor in is that it was so new at the beginning of the year that there weren’t that many places to buy it. There are new shops popping up all the time in smaller towns. It’s literally just the start of what we are going to see in Illinois. The country as a whole is on the same trajectory.
They started the year with about $8.6 million and had nearly a 3x increase in sales. Of their $670 million in regular cannabis sales, nearly $173 million is from out of state.
That means there’s going to be a lot of pressure from other states to legalize and get this revenue which is going to states that do have cannabis legalized because most states are hurting for revenue.
South Dakota during the last election that legalized recreational and medical on the same ballot. It’s coming quickly. It won’t be long before it’s legal everywhere. At some point it’s inevitable we are going to see federal legalization of marijuana.
With the change of power and party in Washington, DC, there is a perception that the democrats voted into power are more friendly to legalization. In all likelihood, over the next two years we will probably see legislation.
In fact, there was legislation introduced late last year that never went through. So everything is in place. As we like to tell people, the markets anticipate. They are never going to wait for the actual event.
This is why you are seeing MJ is already up quite a bit from its bottom.
We have Canopy Growth in Profits Unlimited and after being rangebound for a period of time, it’s the leader of cannabis stock group and beginning to rise significantly every day. Everything is underway for a substantial and long cannabis rally.
It’s looking finally a very good place to invest.
With everything going on, whether it be the stock market for cannabis, legalization, crypto will be introduced at some point in time. It just seems that cannabis being an America 2.0 vice industry that they would be among the first to adopt crypto since the old banking system never wanted anything to do with it.
They also didn’t want anything to do with crypto either, so it’s a good match.
So we are still BOP on cannabis stocks.
Editor, Rapid Profit Trader