Semiconductor Stocks for the 2020 Market Rally
- Market update: Don’t chase the old-world leaders — like Apple and Microsoft — today. Here’s where you need to be for the big money.
- Telsa’s earnings surprise, pot’s double and why Bitcoin (BTC) jumped 40% over two days. Plus, what to expect with bitcoin’s halving.
- Paul Mampilly’s bull market prediction and the stock to buy today.
Mad at the markets?!
Hey, bears … don’t be mad.
Stocks are rebounding in a big way, but not in the way many would have predicted.
The truth is: A major shift is happening, and not every rising stock is a good buy for big America 2.0 profits.
The leaders of the past — Apple and Microsoft — are doing nothing today.
The leaders of this 2020 bull market: America 2.0 stocks.
And one of the best industries that’s showing signs of GoingUpness — Paul’s strategy for picking stocks with the explosive potential — is semiconductors.
So today, Paul and I are going to tell you which semiconductor stocks to buy today to ride the market rally to the top. Check it out here:
The Market Keeps Going Up
The stock market continues its big move up which is not shock or surprise to us but many are simply upset by this turn of events.
Maybe it’s because investors don’t like to be wrong. But the stock market is going up and that’s a good thing, obviously.
But some investors are angry and there seems to be an extraordinary level of confusion.
Macro, mainstream news keeps suggesting that the stock market should be going down. It’s confusing for us.
The S&P 500
Some of the top five stocks in the S&P 500, were worth 20% of the total market cap of the S&P 500, which is pretty crazy because there’s more than 500 stocks in there and the top five have 20% of the market share.
Those stocks have lagged behind during the recovery.
Instead, we’re seeing that market cap that was in them being pushed down into smaller companies. That has made for a rise in the equal-weighted S&P 500 for all companies.
When the smaller stocks do better, Invesco Exchange Traded FD Tr S&P 500 Equal Weight ETF (NYSE; RSP) goes up in comparison to the SP&500.
We want to make that 100% clear. A lot of the stocks in the S&P500 represent the past, America 1.0.
It has been a tradition for the folks who pick the Dow stocks to be late and to pick them when the vast majority of the gains are in.
Most investors fall into the trap. They chase the winners of the last big move up. People are chasing Shopify, Tradedesk, Salesforce and things like that.
Sure, those stocks will go up a little, but if you want to make the big money and be right looking at it two or three years from now, it’s the stocks we’re looking at that we’re putting into IPO Speculator, True Momentum and Extreme Fortunes. We’re also doing trades in the two options services Rapid Profit Trader and Rebound Profit Trader.
We are all over this. We know from past history that it’s a mistake to chase this stuff.
The mindset of some is to think: “Hey, that made a new high and it looks cheap.” First, it will underperform slowly and then it gets hit hard because there are always sellers into the up move. All the people who bought at the old high are constantly selling.
In hindsight, it looks like the move from the bottom in 2016 to the top in 2020 was a bull market in about 20 large cap stocks like Apple, Microsoft, Amazon. Some of them are still in bull markets, but for sure it looks like Apple has peaked.
It might get near its old high, it might even push a little past it, but in terms of it making a bet for it to make huge additional gains, it looks for it to be pretty much done. Most people own it already.
It all comes down to supply and demand really.
Tesla Innovations Inbound
Tesla just reported good numbers yesterday; better than expected. This is the third quarter in a row that Tesla has posted a profit. They had 88,000 deliveries, which is amazing considering the factories were shut down for part of the first quarter.
Their revenue grew 32%. It was amazing for Tesla, especially considering the circumstances.
And Tesla stock price increased as a result.
Many people say it’s because of what Elon Musk said on the conference call. I can tell you the vast majority of people who own Tesla know Elon is passionate.
Now that many COVID cases have peaked, he wants his car factories open.
As the CEO of Tesla, he can say what he needs to say and try to push people to understand his situation.
Tesla has a lot of exciting innovation on the horizon including solar roofs, the Model Y and the Cybertruck.
The growth for Tesla is going to keep bewildering people. I’m not sure when the surprise is going to fade.
Quarter after quarter everyone still seems shocked they are doing so well and growth will likely not let up anytime soon.
We have said Tesla stock price can hit $1,000 this year and it may actually go past that. Many people said when it hit $950 it was going to crash.
Just before coming on we saw an analyst that said Tesla stock should be worth pennies. There is still an extraordinary amount of hate and dislike, negativity and pessimism.
Whenever there is a huge new technology people resist it at first. Some of the general public is going to accept it for what it is. It’s making things more efficient. It’s an amazing technology in every way. Tesla is by far the leader in autonomous cars and batteries. They have a lot of things going for them.
So we are still Bullish, Optimistic and Positive on Tesla. We think it will go over $1,000. Once these lockdowns end and they go back to production, the semi-truck is ahead and their new advances in technology are still ahead.
Cannabis Stock Roundup
We’ve mentioned the idea that a senator could sponsor legislation for federal approval of cannabis nationwide and a senator from New Jersey has actually introduced legislation.
The idea of federally legal marijuana is definitely gaining more traction.
Politicians from New Mexico have stated their regret for not legalizing marijuana because if they had, the state would have collected more than a $100 million in tax revenue that they could put toward the coronavirus situation.
Purely from a tax perspective, legalizing marijuana could really bring in a lot of revenue for the US government.
Both California and Colorado have brought in billions of dollars in tax revenue since it was legalized there. It could really be a boost to states. And marijuana was classified an essential business there. It went from illegal to essential in a few years. I don’t think we’re far off from federal legislation being taken seriously.
NYSE: MJ, which is the cannabis ETF that has all the big marijuana stocks in it, has gone up 50%.
Canopy, which is arguably the leader, has gone up 100% from the bottom. There are definitely people coming in to buy these stocks.
Into the normalization of economies, you are going to see all those people who bought these stocks come in and push the demand for these stocks higher.
Bitcoin Is Up 40% in Two Days
Bitcoin has gone up 40% in two days.
A month and a half ago it was at $4,000, last night it went up to $9,000. It’s more than doubled. It’s made a huge run and is higher than it was before it made the big drop on March 13. The Halving is coming up in a few weeks.
That’s going to be monumental as it has been the other times it has happened. After each Halving I think Bitcoin has gone up at least 1,000% over the next couple years. We have bright things ahead for Bitcoin for sure.
If you look at Google trends, there is massive searching for Bitcoin and he Halving. People are interested. We know because we get emails from a lot of people asking how to get in and what to do. The Halving is pretty severe being that it’s the third.
The quantity we are getting down to in terms of what the miners can generate is now down to 6.25.
A lot of miners were anticipating the Halving coming up, but a lot of them got wiped out because of that one drop when it went from $7,000 to $4,000, or even lower on some exchanges, in one night.
That wiped people out because they knew the Halving was coming up and they were making nothing.
We have the strong miners well positioned and they have bought out all the assets from the ones who went out of business.
Now they are extra prepared.
They are anticipating the price to go up because of all the extra demand we saw since the crash.
Right now, the number of accounts that have more than 1,000 Bitcoin — they are called whales — is at a two-year high. The last time it was higher was right after the peak of the last bull run when it went to $20,0000.
Generally speaking the miners who mine Bitcoin tend to accelerate mining into a Halving because they are only going to get half of it going forward.
Then they tend to sell after the Halving because they accumulated. However, after the crash, the reverse has happened.
They got liquidated during the crash. At that point, a number of them ended operations.
The ones that were well capitalized benefited in different ways.
1 – They didn’t sell their Bitcoin because they were capitalized enough to withhold.
2 – As the Halving unfolds, the difficulty level jumps. It requires an investment into computing equipment to be able to mine for Bitcoin in the future.
Everything now jumps to a level that favors the people who are, what we call, strong hands. Those are people who have the capital to hold something, even through volatility.
A lot of people didn’t sell during the crash and actually ended up buying.
Now, Bitcoin is up more than 100% since that bottom. A lot of buying from that shows a lot of people have strong hands and we have a whole new crowd in there.
They bought at the bottom and are waiting because they think Bitcoin has a bright future and they wanted to get in at a lower price.
Editor, Rebound Profit Trader