The 10 best stocks to own in the 2020s
Thursday, 29 November 2018
By Bernd Struben
- Trump’s gut…and global interest rates
- O cannabis
We open today with a question that’s been on all of our editors’ and analysts’ minds here at Port Phillip Publishing.
And that is…
What might be the 10 best listed stocks to own throughout the 2020s?
Not just in Australia. But in the world?
And not just market-beaters during the 2020s. But, stocks whose potential returns could outshine all others?
It’s a daunting question. But getting the answer right could see you turn every $1,000 you invest into $73,700 in the course of a decade. Or potentially even more…
Let me show you what I mean.
I’m sure you’re familiar with Netflix. In fact, there’s a very good chance you or someone in your family subscribe to their service.
But had you heard of Netflix in 2007?
Back then the company had already been around for 10 years. And it was sounding the death knell for Blockbuster and other bricks and mortar video store formats with its video by mail rental service. But the company wasn’t a household name yet.
Over the next decade that changed dramatically. And Netflix’s share price soared 7,270% between 2007 and 2017.
Six months ago, the brains trust here at Port Phillip Insider got together to have a bit of a debate: Who might be the potential Netflixs of the next decade?
It wasn’t a simple task. But eventually we came up with 10 very special, and intriguing stocks we all agreed look like world beaters over the coming 10 years.
We’ll be unveiling them on 5 December. Watch this space…
Now a look at the markets, where US stocks soared on dovish noises from Fed Chair Jerome Powell.
(More on that below…)
Overnight, the Dow Jones Industrial Average was up 617.70 points, or 2.50%.
The S&P 500 gained 61.62 points, or 2.30%.
In Europe, the Euro Stoxx 50 index finished up 1.87 points, or 0.06%. Meanwhile, the FTSE 100 fell 0.18%, and Germany’s DAX closed down 10.23 points, or 0.09%.
In Asian markets, Japan’s Nikkei 225 is up 150.56 points, or 0.68%. China’s CSI 300 is up 0.31%.
In Australia, the S&P/ASX 200 is up 24.62 points, or 0.43%.
On the commodities markets, West Texas Intermediate crude oil is US$50.73 per barrel. Brent crude is US$58.76 per barrel.
That’s a 3.5% fall in WTI since this time yesterday, and a 2.5% decline for Brent.
Why the renewed price falls? Once again, it’s all about supply. Lots and lots of supply.
In the US, crude stockpiles rose for the 10th consecutive week last week. Stockpiles were up 3.6 million barrels, exceeding analyst expectations…again.
And Putin just threw cold water on the oil bulls hoping Russia might help out by tightening the taps.
‘Russian President Vladimir Putin said current oil prices around $60 a barrel are “absolutely fine” for his country, adding that Moscow is ready if needed to work with OPEC on stabilizing the market after a major drop. Two weeks ago, Putin said a level of $70 suited Russia…
‘Putin said the current oil price is “balanced and fair” and well above the level Russia needs to meet its budget forecasts.’
Turning to gold, the yellow metal is trading for US$1,221.20 (AU$1,671.96) per troy ounce. Silver is US$14.33 (AU$19.62) per troy ounce.
One bitcoin is worth US$4,171.80. That’s up 10.2% since I wrote to you yesterday. After a period of unusual calm, bitcoin’s price volatility is back. And with it the potential for large rapid gains…and losses.
You can stay atop all the latest crypto investing advice with Sam Volkering and Ryan Dinse here.
The Aussie dollar is worth 73.04 US cents.
Trump’s gut…and global interest rates
It’s getting towards that magical time of year again.
No, I’m not talking about Christmas…or New Year’s Eve…or Hanukkah…or Kwanza.
I’m talking about the end of year performance review.
You know, that lovely time you get to spend with your direct supervisor at work discussing what has and hasn’t gone according to plan. And how you hope to do an even better job next year.
It’s generally not much fun, regardless of which side of the table you’re on. And I’ve spent plenty of time on both sides.
I bring this up with Jerome Powell in mind.
Trump nominated Powell, aka Jay, to replace Janet Yellen as the Chair of the US Federal Reserve. Jay’s been on the job now since February 2018. That means he’s right on time for the old annual performance review.
And wouldn’t you like to be a fly on the wall for that one?
Trump’s been having a go at Jay over the Fed’s interest rate rises for months now. He’s gone so far as to call the Fed ‘ridiculous’ and ‘crazy’.
There’s a reason for Trump’s disgruntlement.
When you’re running trillion dollar annual deficits atop an existing national debt in excess of US$21 trillion, interest rates matter.
Not to mention that Trump likes to take credit for the soaring US stock markets…but is less pleased to hold his hand up when markets tank. And the Fed’s tightening has dragged down most companies’ share prices.
Anyhow, here’s a little preview of how Jay Powell’s annual review might go. In an interview with The Washington Post on Tuesday, Trump is quoted as saying the following:
‘So far, I’m not even a little bit happy with my selection of Jay… Not even a little bit. And I’m not blaming anybody, but I’m just telling you I think that the Fed is way off-base with what they’re doing. I’m doing deals, and I’m not being accommodated by the Fed. They’re making a mistake because I have a gut, and my gut tells me more sometimes than anybody else’s brain can ever tell me.’
Not even a little bit happy. Ouch!
And apparently there’s no one to blame. Certainly not the man who appointed Powell in the first place, apparently without consulting his gut.
Blameless or not, Powell looks to have gotten the not-so-subtle message from his boss.
In October, Powell was still saying the Fed was ‘a long way’ from hitting its neutral target.
Yesterday he said the bank’s benchmark rate was only ‘just below’ the intended target.
And as you saw above, investors in US stocks loved the shift in attitude. The battered tech sector led the way, with the NASDAQ posting a 2.95% gain.
Netflix (remember Netflix?) led the charge. The share price closed up 6.0% for the day. And the good vibes look to be taking hold in the Asian and Aussie markets as well.
Gold — and gold miners — were another immediate beneficiary.
‘Dovish comments from the Federal Reserve’s Jerome Powell suggesting slower-than-anticipated interest-rate hikes awakened gold from its recent slumbers…
‘Shares of mining companies rallied in tandem with the metals and the main stock indexes in the Americas. The Bloomberg World Mining Index of 115 companies jumped after Powell’s comments were released, with Alcoa Corp. (+9.1 percent), Constellium NV (+8 percent), Kinross Gold Corp. (+5.8 percent) and Freeport-McMoRan Inc. (+5.7 percent) among the biggest gainers.’
Over at Gold & Commodities Stock Trader, resource analyst Jason Stevenson has been forecasting a sharply rising gold price in the months ahead.
Rounding off the day, it’s been some time since we touched on the still booming market for legal cannabis.
And booming it is.
As Bloomberg reports:
‘The flood of U.S. pot companies onto Canadian stock exchanges continued Friday, with DionyMed Holdings Inc. receiving conditional approval for its listing after raising C$35 million ($26 million) in a private placement…
‘The firm plans to expand into other states following the recent midterm elections, which saw Michigan legalize recreational marijuana and a changing of the guard to a more pro-pot Congress. Cannabis remains illegal federally in the U.S.
‘“We’re quite optimistic about the improvement around banking issues and tax issues and compliance issues federally, and I think that’s part of the call to arms for expanding...’
Unlike a real flood, the ‘flood of pot companies’ won’t lift all the boats.
Some pot stocks will flounder and eventually fail. But the best ones could continue to deliver the types of 10-bagger gains (that’s 10 times your investment) we’ve already seen over the last year.
And small-cap investing expert Sam Volkering thinks he’s found the next big winner. It’s currently still a very small company, with a market cap of only $75 million. But if Sam’s right, that won’t last for long.
As Sam explains:
‘Quietly, while the big guns have hogged all the headlines and investor attention, these guys have been systematically building exposure to Canada’s exploding legal weed market.’
These kinds of plays are risky. But when stocks like this take off, they can take off fast.
Wait, wait, wait! Don’t forget to check out the latest from The Australian Tribune:
‘Is Ukraine Orchestrating a Dangerous Crisis with Russia?’
‘Anytime Russia and Ukraine clash it’s cause for concern. The potential for a small skirmish to spiral into something larger is very real.
‘The bigger danger arises if allies get involved. And that’s where every citizen has the responsibility to read between the lines before supporting any kind of unwarranted escalations.
‘As an Australian, the first thing you need to ask…’
If you’re fed up with sanitised, politically correct dogma cut and pasted from one mainstream source to another then The Australian Tribune is for you.
And it’s absolutely free.
Sign up here to get The Australian Tribune delivered free to your inbox five days per week.
You can visit our website at https://www.theaustraliantribune.com.au/ to read the complete article above now.