The Breadwinner


Patience is truly a virtue. But unfortunately, it’s not as widespread among investors as it should be. With many people selling a stock way too soon.

Staying with a stock is much easier when its long-term forecast looks good. The great news is that there are many stocks that fit that description. Here are three excellent growth stocks  you should buy and hold for the next decade.

1. MongoDB

Disruption is coming to the database market. And don’t believe for a moment that major database companies don’t see it. There’s one company in particular they’re watching closely: MongoDB (NASDAQ:MDB).

MongoDB’s trailing-12-month revenue growth of 227% over the past few years completely destroys the numbers of industry giants like Microsoft and Oracle. Its price gains have also been amazing during this time, with Mongo’s shares increasing up to 1,170%.

The secret to MongoDB’s jaw-dropping growth is the cloud. The Atlas cloud database system is the largest growth driver for the company. That growth could get even better thanks to their announcement this past October of Atlas’ support for distributed databases spread across many different cloud hosting providers. 

Despite its amazing growth, MongoDB’s market cap is near $22 billion. I believe the company will keep capturing market share from the other players in the database industry. And it’s quite realistic that MongoDB will join those big players within the next 10 years.

3. Teladoc Health

The quick rise of telehealth is, without a doubt, among the most significant long-term results of the coronavirus pandemic. As the top provider of telehealth services, Teladoc Health (NYSE:TDOC) is an an obvious beneficiary of this crisis.

Teladoc had strong growth going into 2020. But the pandemic accelerated the company’s growth to greater heights. Over the pas few years, Teladoc’s trailing-12-month revenue has gone up by more than 300%. In its most recent quarter, the company’s revenue more than doubled year over year. 

Can Teladoc keep its top position in the market with more competition showing up? I believe so. Much of the company’s recent growth has come from acquisitions (although also delivering strong organic growth). My thinking is that Teladoc will keep scooping up other companies to boost its market domination.

The consulting firm McKinsey & Company says that the American virtual care market will be near $250 billion even after the pandemic ends. But even with its rapid increase, Teladoc’s annual revenue is just around $1 billion. I’m certain the company will grow to greater heights over the next decade as revenue continues to grow.

3. Etsy

Things that are truly one of a kind are not easily found. But that’s a really good description of Etsy (NASDAQ:ETSY) and the available products on its platform. No other retailer can match their offerings of unique handmade goods.

Even Etsy’s growth is unique among companies like it. With its stock increasing by a whopping 800% over the past few years. Trailing-12-month revenue nearly 4xed during that period. In Etsy’s most recent quarter, its gross sales went up 2.5 times quicker the Census Bureau’s benchmark for the e-commerce industry.

Can Etsy keep this strength up? I believe so. Actually, I believe its growth will get even better. Due to the pandemic, more people are using Etsy than ever before. Sure, many of them only visit to buy fashionable face masks. But I fully anticipate that initial singn up to Etsy will lead to more purchases.

Etsy’s potential over the next 10 years is terrific. The market size for the types of products on its platform is at least $100 billion annually. Making their real potential market possibly closer to $250 billion. The company is expected to report around $1.6 billion in sales for 2020. I think Etsy will be much bigger 10 years from now.

Last Friday, we mentioned Gold would be in trouble, and even though we were long on the precious metal, we were searching for a signal that it could hold support. We also said a lower close would cause a reversal, and this is exactly what has happened. We are now short on both Gold and Silver, while still being long on Platinum.

Of course the bigger story was in the cryptocurrency markets. With Bitcoin going to $42,000 and being joined in its big rally by the number two cryptocurrency, Ethereum, along with many other “alt coins”. It seems to many that Bitcoin could be replacing Gold as the #1 place to store wealth.

We think nothing will replace Silver, Platinum and Gold. But we also think that Cryptocurrency is real. We have no clue what the future has in store for the investment class, and we are very small players there, but we do believe investors will continue to use Cryptocurrency as a “digital alternative” to Gold.

However, we would not recommend buying at the current levels because we see this latest rally as being triggered by the fear of missing out. Bitcoin right now is in bubble territory and will soon have a significant pullback, which would then create a great buying opportunity. We dont trade Bitcoin, but we do own some. As we continue into this week, we are looking at Gold and Silver in the short term, and Platinum for the long term.

Bitcoin’s incredible rally has concerned many analysts. Those analysts have warned of a large incoming bubble. One of them is Michael Hartnett, chief strategist at Bank of America’s Securities division.

He said recently that the surge in bitcoin’s value could be another example of speculative mania, highlighting the fact that bitcoin appears like “the mother of all bubbles.” The chief strategist says he thinks extreme inflationary prices within the market aided bitcoin’s rally in the past 60 days. Hartnett reminded followers that bitcoin has out-competed other assets with its value surging 1,000% since the start of 2019.

Bitcoin “wins the title when compared to previous bubbles,” he claimed, comparing its performance to other past bubbles. Bubbles which included a takeoff in gold prices of more than 400% in the 1970s, Thailand’s stock market in the 90s and Japanese stocks in the 80s. He went on to compare bitcoin’s bubble to the dot-com bust in the 1990s and housing crash in the 2000s. Hartnett highlighted that those sectors saw triple-digit percentage increases before catapulting down.

He did not directly claim that bitcoin would go into freefall like these other bubbles. But he connected the surging prices of cryptocurrencies as another example of “very speculative” investing.

Others who have recently predicted a bitcoin bubble include the chief economist at Rosenberg Research, David Rosenberg. Who warned about a bitcoin bubble in December, saying that BTC was “a classic, follow-the-herd trade.” Another warning was issued by NYU economist, Nouriel Roubini, also known as “Dr. Doom”. Who said “the value of bitcoin is completely manipulated by whale investors.” “It does not have fundamental value. We are nearing the time when the bubble is going to burst.”

  • Investor Bill Miller said Friday he anticipates bitcoin surging by 100% in 2021 as more people add the asset to their portfolios as a hedge against inflation.

  • “The interesting thing about Bitcoin is that it gets less risky as it gets higher, which is the opposite of stocks,” the legendary investor said. 

  • He went on to say he’s not sure when Bitcoin’s price will correct, and if investors can’t tolerate a 80% correction, they should not buy bitcoin.

Investor Bill Miller said this past Friday he views bitcoin as going up 100% this year as more people start using the asset as an inflation hedge.

Miller said investors should hold about 1-2% of their investments in bitcoin instead of cash, because cash will lose at least 2% with current inflation rates. 

“Having a little bit in bitcoin is more a risk management thing than anything else.”  the founder of Miller Value Partners said. 

He went on: “The interesting thing about Bitcoin is that it gets less risky as it gets higher, which is the opposite of stocks.”

Miller said he does not have a target for bitcoin’s price, but that he does have expectations.

“I believe bitcoin… will rise 50% to 100% within the next 12 to 18 months. And if you ask me will it be higher or lower, I would for sure say it would more likely be higher,” he said.

Bitcoin has more than doubled over the last 30 days, and gone up over 30% in 2021 so far. While some investors want to take profits now as the price explodes, many investors are waiting for a downturn to buy at a cheaper price.

Miller told people who are on the sidelines waiting that it already occurred in the first quarter of last year, when the price was at near $4,000.

“That’s what usually happens. Once a correction happens, investors who are waiting on the sidelines then wait for the correction to keep decreasing,” Miller said. “And after they missed the upside, they’re wondering if they should buy it then.”

“We’ve had several 80% corrections, if you can’t tolerate that, then you should not buy bitcoin,” he added. 

These statements come days after Miller published his fourth quarter market letter, where he told followers that bitcoin is “best viewed as digital gold”, but has many advantages over gold. 

“Warren Buffett has called bitcoin ‘rat poison,'” Miller said. “He might be correct. Bitcoin may be rat poison, but the rat could be dollars.”

Warren Buffett’s Berkshire Hathaway (NYSE:BRK-A)(NYSE:BRK-B) did not do well in 2020. When a stock hands over a gain of a measly 2% while the S&P 500 index gives 16%, it was a terrible year for that investment.

But this year could be different for Berkshire’s holdings. In fact, here are a few Buffet stocks that could make the legendary investor smile this year.

1. Apple

Apple (NASDAQ:AAPL) is possibly Buffett’s favorite stock, behind only Berkshire itself. But unlike Berkshire, this technology goliath was red hot in 2020 with its shares increasing by nearly 81%. And don’t think that Apple’s growth will vanish this year.

Wedbush analyst Daniel Ives believes Apple could skyrocket up to a $200 per share value. That’s an increase of more than 50%. I’m not sure if the stock will keep that jaw-dropping level in 2021, but there are many reasons to be bullish about Apple.

Maybe the most important reason to be hopeful is Apple’s iPhone sales. Newsmagazine said in December that Apple wants to increase its iPhone production by around 30% in the first part of 2021. This could lead to Apple’s quarterly sales in the second part of 2021 being very strong.

Also, Apple’s other products and services continue to have solid momentum. The company released high-end AirPods Max headphones that look to be destined to become another huge success.

Apple’s value might seem steep at more than 30 times expected earnings. But don’t think that will stop the tech giant’s prospects in 2021.

2. Mastercard

Mastercard (NYSE:MA) did better than the major market indexes in 2020 with an increase of almost 20%. I expect this year to be another market-beating year for the payment giant.

The pandemic hit many industries hard, with the travel industry especially hit hard. That was not good news for Mastercard. And the company’s Q3 results showed it, with both earnings and revenue missing analysts’ estimates. 

I see Mastercard as a great pandemic rebound play. As vaccines become more widely available, the world could finally get a leg up on the pandemic. That should kickstart an economic recovery and give a big boost to Mastercard’s business.

One other reason why I’m hopeful about Mastercard. The company’s leaders approved a $6 billion buyback program this past December. So Mastercard will be fighting to repurchase its own shares in 2021, which should increase its stock price. Warren Buffett has been a fan of Mastercard for a while. But he might adore it in 2021.

3. Bristol Myers Squibb

Buffett bought a lot of pharma stocks in the third quarter of 2020. Several of them could do very well this year. I’m especially hopeful of Bristol Myers Squibb (NYSE:BMY).

BMS is very cheap right now. Its shares are trading at a very low eight times expected earnings. But don’t let that cheap valuation scare you. It does not reflect on the company’s growth prospects at all.

BMS could soon win approvals for its new blockbuster cancer immunotherapy Opdivo. Meanwhile, Zeposia, its treatment for multiple sclerosis has already won regulatory approval and has a great shot at winning more approvals for treatment of ulcerative colitis. Also there is Inrebic, which seems to be inches away from securing European approval for treating myelofibrosis. The company’s cancer cell therapies ide-cel and liso-cel could also win approval in the U.S. this year. 

While BMS awaits these huge events, its current lineup continues to impress with healthy sales for blood cancer drugs Pomalyst and Revlimid, cancer immunotherapy Yervoy and blood thinner Eliquis. For all these reasons, I think BMS could be a big winner in 2021.

Alibaba has been slammed over the past couple of two months. And now we can expect bulls to start sweeping in and start buying the e-commerce giant.

Alibaba  (BABA) stock has been hit hard recently. Shares of the Chinese e-commerce giant are higher by 1% on Monday, but that is after their painful end to last week.

In the short trading week (due to the holidays), Alibaba did not give investors holiday cheer. Instead, it gave them lumps of coal by losing 13% of its price on Friday, ending with a total loss of 15% for the whole week.

At the lowest point on Friday, its shares were 18% lower as investors sold their shares one after another.

At the low of $211, its stock had lost 34% from its highs on Oct. 27. What happened in these two months?

Well, first the Ant IPO was pulled days before its public debut. And since Alibaba holds one-third ownership in the company, this was a huge negative and the data clearly shows it.

While the IPO was delayed because of regulatory problems, new regulatory issues being aimed at Alibaba are the latest triggers for a deeper selloff.

As we get to 2021, this looks like a purchase opportunity rather than a selling moment. Management agrees, as they are now increasing the company’s share repurchase plans.

Alibaba Stock Trading

Monthly chart of Alibaba stock.
Chart courtesy of

Because of the triggers mentioned above, look at what has happened to Alibaba stock over the past couple of months. After increasing for almost half a year, investors took a sharp gut punch.

But hope is not lost.

The stock is getting support at its 21-month average. It’s getting support at $211.70, which is the 2018 high. Further, the shares bottomed near this number on Friday, low-ticking at the number $211.23.

The 2018 high may seem irrelevant, but look at how obvious this range was in late 2019 and the first part of 2020. This range was risky, highlighted by the wicks, but there were no complete closes above $211.70.

This continued for six months — until this past year.

A top company being lower by 30% from highs looks like a safe investment. Conservative traders can calculate their risk against recent lows and look for a rebound.

With a daily close under $211, it could place the monthly volume weighted average price measure close to $197. It could also cause the 200-week moving average, which is currently near $187, to come into the play.

Those would be negatives to watch.

But on the positive, look for a return back to the stock’s 50-week moving average close to $240, followed by the 10-month moving average, which is currently around $246. When and if we reach the latter, the 200-day moving average becomes important.

Although it could take time for the stock to fully recover, it seems like a good dip to buy for hungry bulls.

Dow futures rose slightly Monday morning, right beside Nasdaq futures and S&P futures, with new tariffs counter-balancing positive Chinese data. Apple (AAPL) is consolidating at a profitable zone. But Amazon, Shopify, Microsoft (MSFT) and Zscaler (ZS) are revealing a sell rule that is always important to follow.

Large institutions will often buy top stocks at 10-week moving averages. But when a stock plummets under this important level in heavy trading, it shows the end of the run.

Meanwhile, Apple’s AirPods were big sellers over the holiday. And overall online sales continue to skyrocket, which is great news for (AMZN) and e-commerce tech company Shopify (SHOP). Mall visitors dropped on Black Friday, but increasing buy-online-get-offline orders show that traditional outlets like Target (TGT) are coping well with lockdowns.

Dow Jones Gives Big Signs

Dow Jones futures increased 0.2% vs. fair value, after going as high as 0.5%. S&P 500 futures went to 0.2%. While Nasdaq futures hit 0.2%. Note: Premarket moves in Dow futures doesn’t always lead to real world trading in the next session.

These futures rose on optimistic Chinese factory data, combining gains on new Trump tariffs vs. Argentina and Brazil.

Chinese activity increased for the first time in half a year. Going up 0.9 point to 50.2, above the break-even level of 50 and defeating forecasts. The non-manufacturing index also jumped from 1.6 points to 54.4. Also, the Caixin survey had Chinese manufacturing increasing at a faster pace, ticking up 0.1 point to 51.8.

The ISM manufacturing index will be out on Monday at 10 a.m. ET and the services gauge out Wednesday and Friday we have the November jobs report.

Meanwhile, in the AM on Monday President Trump tweeted he was reinstating aluminum and steel tariffs vs. Argentina and Brazil, saying they were guilty of “massive” currency depreciation, hurting American farmers.

Stocks Rally

The market rally is looking great. Even after Friday’s small pullback, the Dow rose 0.6%. The S&P 500 went up 1% and the Nasdaq increased 1.7%.

Growth stocks also had a great 7 days. With the best ETFs such as the iShares Expanded Tech-Software Sector ETF (IGV) gaining 1.9% and the Innovator IBD 50 ETF (FFTY) going up 2.3%. While the VanEck Vectors Semiconductor ETF (SMH) increased 1.5%.

Should You Hold Or Sell Apple?

Apple has gained 21% from its flat-base buy point of 221.47. It has now moved into the profit area of 20%-25%. Which is seen on the Marketsmith charts as the lime green area.

With these numbers, most stocks will consolidate or pullback greatly. You may watch a stock go sideways. Or you might see some or all of your gains evaporate. So it’s a great idea to withdraw some profits from stocks after a 20%-25% gain. (If a stock rockets 20% in the first two weeks after a surge, try to hold it for eight more weeks.)

But on the other hand, some stocks will keep going for long runs. So how should you handle this?

It’s all based upon your confidence in the company and stock. If you believe Apple will be a big winner yet again, you might keep most of your holdings.

The Sell Signal To Watch: The 10-Week Line

Now of course, the market doesn’t care about your emotions or hopes. When a company goes past the 10-week line in large weekly volume, it’s an obvious sign that big funds are selling. Chances are great that the stock will keep falling. Also take into account the relative strength line, which follows a stock’s performance versus the S&P. 

Let’s Discuss Amazon

In 2018, Amazon was winning in a multiple year run. With its huge role in cloud computing and of course e-commerce, Amazon seemed unstoppable.

But the stock went down in the week of Oct. 5. Ending just below its 10-week as the market correction started. The next week, Amazon dropped again in the biggest volume in three months, well under its 10-week. That showed a clear sell signal.

Two weeks after, Amazon went below its 40-week line, which then became another resistance area. Amazon has not yet returned to old highs. 

One of the challenges retirees face today is low interest rates. To help manage, try these three plans.

Years ago, retirees could live off the interest from bonds and CDs. But a lot has changed. Now interest rates are at record lows, and retirees are not getting the income they need.

But don’t fear. Retirement is not out of reach. You just need to plan smarter. And here are three examples of just how to do that. With the end result being to boost your retirement income.

1. Begin by lowering your expenses.

My clients write down all their expenses. Each item is then thought about. I ask them, can we reduce this expense in anyway? Can you go without it or live with it on a smaller level? Cellphone bills, cable bills, subscriptions, these all add up fast.

Other expenses are harder to find. Cash gifts to adult children are very common. Retirees need to have a discussion with their adult children on how that money could harm Mom and Dad’s ability to retire safely.

In addition to this, go over your insurance and request proposals for home, health and auto. I can normally find better deals for my clients. Or, another idea that sometimes works, try increasing your deductible. Doing this will save you cash on premiums. This assumes of course that can meet the higher deductible when you file a claim.

For life insurance, does it still make sense? If your mortgage is paid and your kids out of college, maybe redirecting your dollars to long-term care insurance could be better.

2. Reduce your taxes smartly

Search through your tax returns for leaks. Are you canceling income with losses? If any of your stocks or funds lost money, you can take up to a $3,000 loss against your income. Are you giving to charity in the most tax favorable way? Giving a stock could be much better than giving cash. Giving stock lets you “sell” without paying taxes on that selling. This lets you preserve your cash for living expenses.

And if you have self-employment or consulting income, are you putting money into a retirement account? Self-employed (SEP) IRA are tax-deductible. You should use them to reduce your taxable income and build your savings for future needs.

3. Let your portfolio do the work.

Many retired people set up dividends and interest to be reinvested back into their portfolios. Instead, have all portfolio income paid to you. My retired clients get a weekly check or a wire to their bank account from their interest and dividends. The advantage? You won’t touch your principal. The downside is of course that growth might be limited. That is just a trade-off. And for retirees, it might be a good trade-off to make.

The key is to understand that the old-fashioned “living off interest” way of retiring is not a possibility any longer. These days, retirees must be smarter.

If you are feeling uneasy about retirement, you should go see an experienced financial adviser.

But here’s why you should rest easy.

Nobody knows exactly how coronavirus will change the economy — whether over the next couple of months or over the long term. What we do know is that the number of COVID-19 diagnoses continues to rise, and is now twice what it was when it peaked this past April.

Some states are responding by ordering new lockdowns while some are demanding people wear masks to contain the virus.

The situation is creating a lot of chaos for businesses. Restaurant chains, for example, face different restrictions in each state, which makes it harder to operate. Companies in the entertainment, travel, and retail sectors are dealing with similar issues.

Yet regardless of the terrible news, the market has been surviving — maybe even downright thriving. However, soon that’s going to change. An economic crash could be around the corner. But it won’t be the complete disaster you may believe.

Source: Getty Images.

The market will go down

The market hit a free-fall earlier this year in February and March, but turned around thanks to anticipation of an economic recovery. This optimism has continued among investors despite coronavirus being worse than ever.

Nationwide business closures increase the chances that the economy will falter again. But the one factor that could guarantee a bear market will happen is the government allowing unemployment to expire.

Thanks to the CARES Act, workers are now collecting an extra $600 per week in addition the the usual unemployment benefits. That figure was selected by Congress with the aim of keeping the average person’s income equal to their previous ‘working income’. But for many, it means they’re earning more in unemployment than they made from working.

That is being taken away this July — and politicians have not discussed the idea of extending it. When this change happens, millions of Americans will go through a major income drop, and many won’t have the money to pay their expenses. That could have a disastrous chain-reaction effect across the entire economy and cause more business to fail and more people to not pay their rent. It will also be terrible for any business that relies on consumer spending, especially the restaurant business which is already suffering.

This is while more than 10% of Americans continue to be unemployed — which is worse than the Great Recession — and that data may soon get worse. By removing the $600 a week payment away, D.C. may set off an economic chain reaction that leads to a stock market crash.

Relax and invest

The latest stock rally was shockingly quick, likely due to the special circumstances that triggered the bear market in the first place.

Historically, the market takes more time to recover from such downturns. But after a while, it always returns to new highs. If it goes down as a result of coronavirus, no one knows what will happen.

There could be a double rebound as a result of optimism, the discovery of new treatment options, or the public acceptance of a perfected coronavirus vaccine. But it’s also possible those things won’t happen, and stock prices will be down for a much longer time.

But what we do understand is that the historic pattern is that recessions are followed by larger upturns. 

Because of this, during a recession, you should take the time to re-think each company in your portfolio. If you still feel your investment is still wise, then a downturn is the perfect time to add to your positions. For example, ask yourself has anything changed for this company in the long term. If the answer is so, then definitely hold and maybe even buy more.

Tesla, with yearly sales of $28 billion, has reached a value greater than the ten biggest carmakers in the world, who have combined sales of over $1.3 trillion.

Tesla Inc. (TSLA) shares hit another jaw-dropping high this Monday as traders and investors reacted to the carmaker’s record delivery of almost 500,000 vehicles last year.

Tesla shipped right under 181K cars during Q3 of 2020, which is a 61.2% increase from that same time last year. This number brings its yearly number to 499,550, just under Elon Musk’s 500,000 goal. While the company’s year-end production was right under 510K vehicles.

“With Tesla ending the year at 180K sales, and with output from their Shanghai facility increasing and the Berlin location starting production, we are somewhat shocked that the anticipated outlook for this year is just 784K units,” stated Joseph Osha, an analyst for JMP Securities  . “Our current estimate is 841K, and from what we see from the fourth quarter’s numbers, we would anticipate the 2021 forecasts to increase.”

“We think that Tesla sales in America could benefit Biden’s policies, potentially giving tax credits to EV buyers,” he said. “The one worry we do have is the Chinese market and the friction between the U.S. and Chinese governments.”

Tesla shares popped 5% higher in early trading on Monday to $743.76, an all-time high putting the company’s value at  $702.9 billion, greater than the whole market cap of the world’s ten biggest carmakers by volume, including Volkswagen AG VLKAY, Toyota Motor Co. (TM),  General Motors (GM) and Ford Motor Co. (F) 

Tesla ended Thursday December 31 at $705.67 per share. Which was an all-time high that brought its year-to-date gain to an amazing 743.4%.

The company said it sold 442,511 Model 3/Ys over the year, with 57,039 Model S/X cars also being shipped. Production figures were marked at 454,932 and 54,805 units.

Wedbush’s Dan Ives stated that the 500,000 delivery number was “not even seen as possible back in spring and summer,” and forecasts of sales as large as 710,000 for 2021, a 40% growth, would “put Tesla on the path to strong growth into 2022.”

“Obviously, competition is growing, with local players in Europe and China getting more efficient and companies in the US going after Tesla’s foundational EV income. And since the market is exploding, this industry will create multiple players all going for this EV goldmine,” Ives said.

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