STIXX + Stocks for Market-Doubling Gains
We’re crushing the markets, and the V-recovery is in full swing.
If you just follow the S&P 500 Index, you’re missing the explosive growth happening behind the scenes.
If you want the biggest — market-doubling gains — you need to look at the America 2.0 index.
You see, the S&P 500 and the Dow Jones Industrial Average are full of America 1.0 stocks.
Paul has tailored an exclusive portfolio focused on America 2.0 in Profits Unlimited (click here to see).
If you started investing during its inception in June of 2016, bought and sold every stock when recommended, you’ve made more than 120% — around a 30% annual return.
That’s more than double the S&P 500 Index!
Another way to make the most in this new America 2.0 transformation, is a group of market-crushing exchange-traded funds (ETFs) we call STIXX.
For all our big America 2.0 trade recommendations — ones to blow the S&P out of the water — check out today’s IanCast here:
Welcome to another edition of the Iancast
America 2.0 Stocks Reaching New Highs
America 2.0 stocks are running like crazy. If you looked at the Dow or S&P you wouldn’t see that. The Nasdaq you would a little more because that has been making new highs. Apple, Microsoft, Google and Amazon are more than 20% of the Nasdaq. You don’t see the kind of growth going on behind the scenes if you just look at the indices.
Every single stock bought on the day we recommended equal weighted by dollar amount, is up something in the range of 17% this year. The S&P 500 in contrast is flat.
It really does illustrate that fracture and divide between America 1.0 and America 2.0. In the S&P 500, because it’s a market cap weighted index, it’s very America 1.0.
All the old oil companies and the big banks that take up a big amount of the S&P 500. While software companies, a lot of which are below $20 billion in market cap, and semiconductors and the smaller companies are doing better. Biotech is another one.
It has a bunch of small-cap and mid-cap companies that are making all new highs.
The S&P 500 is going to lag the Nasdaq and our portfolio because we exclusively focus on America 2.0 stocks. This means we are focusing on stocks that are exposed to the big megatrends of our time, technologies of our time and the millennial generation. The millennial generation is now largely directing what is going on in the economy, society, etc.
It’s easier to start a new company that’s aimed and focused on America 2.0 than to try to change a multi-hundred-billion-dollar company like IBM or GE. You must change so many people’s minds and you must revamp your entire business model. It just doesn’t work.
The new is taking over. That’s really a lot of the reason why. It’s easier to start from scratch and just build an innovative company from there.
Liquidity Bids for America 1.0 Stocks
Tesla in many ways is the encapsulation of that idea and the encapsulation of this divide between America 1.0 and America 2.0.
Many are now going to be thinking that because the Dow is now the laggard stuffed with all these old companies like Wells Fargo, it’s going up largely for liquidity reasons. I’m thinking even their businesses are going to recover.
It feels a little like March right before the crash. Then, the liquidity bid was coming under Apple and stocks like that.
It’s easier to buy Apple when the S&P 500 is the most liquid traded market in the world. When you buy that, you buy Apple. Apple is also buying back a ton of shares of their own. They have a lot of demand for their stock.
As these companies take over, they are not going to represent as much in the indices. They must stop putting tens of billions of dollars’ worth of money into their stock anyway.
We are bullish, optimistic, positive on America 2.0 stocks. We are not BOP on Apple. I am guilty as charged for getting Apple stock wrong. I have focused on their business which has been in decline for four years plus. Without Warren Buffett coming in and sucking in $40 billion or $50 billion in the open market —
Imagine that much money. That’s like fuel onto flames. From 2014 to 2019 they have bought up $295 billion worth of stock, which Warren Buffett thinks is a good idea. He thinks companies spending money to buy back their stock is a good idea.
It’s a false bid up of price. False creation of scarcity. Versus investing in perhaps the greatest technology opportunity in our lifetimes. There are extraordinary technologies out there. What is Apple doing? Apple is creating a music subscription business to tie people to the iPhone. It’s already a $1.4 trillion company.
Look at their business. Their revenue is in steep decline, their unit volume growth is in steep decline. Inevitably, their stock will follow their business.
The indices will reconstitute themselves with America 2.0 companies. Then even the Dow, laggard that it is, will then eventually make new highs.
There must be some reconstituting of that eventually. One of the big ones that’s not even in the S&P 500 at this point is Tesla. They are worth more than $100 billion.
Tesla’s V Recovery
Tesla stock has been making new highs. There’s a lot of excitement about Tesla. We have covered it a great deal. We were called a lot of names, foolish things, by people throughout this whole period because we told people there would be a V recovery.
All those other things people said were going to happen like a double bottom, a W recovery, retesting the lows, we don’t hear anything about it now. We were also called fools for saying Tesla would go to $1,000 and it has happened. We don’t have to cover Tesla today because there is a ton of excitement out there.
There are more stocks than Tesla in the stock market that are America 2.0 stocks. It’s always important to have a portfolio. Tesla stock does go up and down. Please look at a stock chart of Tesla. The last time it went to $1,000 it did go back to $700 and then a crash to $350.
Please keep your head and wits about you. Just because everyone else is focused on Tesla right now is not a reason for you to exclusively focus on it. It’s a large market with a lot of great opportunities out there in so many different sectors.
New Energy Take Over
We are seeing all kind of alternative energy stocks go up. TAN, the ETF we cover which is mostly solar, is now going up like crazy. There is also hydrogen with Plug Power and Nikola just went public.
These companies with alternative energy as their core business are getting a ton of publicity. Their stocks are seeing a lot of demand right now.
Semiconductors, which are in every electronic device we use, is now the core and heartbeat of the economy. The better things are going, the more things are being built and used, the more semiconductors we need.
It pays to focus on the majority generation in terms of demand. Those are the stocks that are going to get a bid because those are the businesses that millennials use and that’s what their experience is.
Increased Demand for Cannabis Sector
Millennials use Robinhood now more than ever. I think during the lockdowns a lot of people got into trading. Robinhood spiked in popularity over the past few months.
People I know who I have never heard talk about stocks before are now using it. They are trading and asking me what to buy. Marijuana stocks are one of the most-held stocks on there. Millennials are buying those stocks and holding them through the worst of times, which I believe are over.
They are still holding on and still buying more. You see a big core group of people and are willing to hold them no matter what, kind of like holding with crypto.
We’ve seen stocks like Green Organic Dutchman, HEXO and other small stocks get a bid. Marijuana Business Daily showed that 2020 is on pace to have an increase of 40% in terms of demand. The even bigger number is that $30 billion to $37 billion number in 2024.
One of the highest valued marijuana companies out there right now is Canopy. I think they are around $6 billion. They don’t even do that much business in the U.S., they are mostly in Canada and Europe. The U.S. market is huge. The companies right now that are doing business there are maybe a couple billion dollars.
For $30 billion to $37 billion, the industry is consolidating. There are going to be fewer key players. There are a few big-name stocks that do business in the U.S. like Curaleaf, but it’s still only $1 billion. You know the market is forward looking, so once it gets past this point where there is a bearish overview of the marijuana market, these stocks are really going to take off.
They’ll take that $30 billion to $37 billion estimate into consideration for the value of these companies.
The market looks forward. It does not look backward. If you wait until 2024 it will be pricing in growth for 2028. The market looks forward as much as one, three, five or even seven years ahead.
This is why Tesla, even three years ago, had the market capitalization that it did or the market capitalization that Amazon had. The same thing we believe is going to happen with cannabis. We believe it’s going to come back and more than make up all the losses.
Cryptocurrency is On Fire
Chainlink is a good example. They are a smaller coin. I think they are ranked number 12. They weren’t around during the big hype bubble of 2017. The price of Chainlink is making an all-time high. Another one like that is VeChain. They are at all-time highs now. They came in late in 2017.
Kyber Network is up, and these companies are projects that work to swap tokens through their blockchains. If you have crypto, you can swap it out for a different one pretty much instantly. The more trading goes up the more people will start trading crypto. It’s already been on fire the past couple of months.
Those companies are going to see a lot of demand for their tokens. Some of these are up hundreds of percent just in the past few months.
We would expect the billions of dollars that want to come into Bitcoin, etc. is going to come in and make new highs. We are on record as saying we believe Bitcoin is going to make new highs this year. First it will get past $20,000 and then $50,000.
Once you get to $20,000 it’s 150% up from there. Bitcoin back in 2016 and 2017 did that in a couple months. It doesn’t take long once it gets going.
Further out, using the stock-to-flow model as well as log-normal distribution numbers, $250,000 or something in that range looks to be the peak in 2023 or 2025.
Speaking of smaller coins, I saw Dogecoin, a favorite of Elon Musk, went up 60% the other day. There is a group of people trying to push it to one cent.
That might be the currency in Mars once we get there. Just to make it clear we are still BOP on crypto in general, Bitcoin and Ethereum. We would say for people who got very bearish, this is all going to feel like everything is going up.
Editor, Rebound Profit Trader