So if I show you three charts, are they worth 3,000 words?
I don’t know about that part, but I definitely believe they
can be worth a lot of money.
These charts are part of the case I’ll make tomorrow in my
debate with InvestorPlace colleague Louis Navellier.
As you may know, I have a friendly bet with Louis about The
Race to 40K. Specifically, whether the Dow will gain 50% to hit 40,000
before bitcoin gains more than 250% to get to $40K.
We’re going to hash it out tomorrow at 4 p.m. ET. Your
registration is confirmed, and I can’t wait. But today, let me give you another
sneak preview as to why I’m confident I’ll win.
I own bitcoin and have for a long time. It’s never been a
trade for me. It’s about the transformative potential of bitcoin and all
I think we are now in the early stages of what could be a
huge run driven by multiple catalysts.
Bitcoin’s recent halvening reduced the new supply of coins
coming on to the market at a time when demand is rising.
Bitcoin use is becoming much more widespread and mainstream.
Just recently, banks were given the go-ahead to store cryptocurrencies for
their customers. PayPal (PYPL) and Venmo plan to offer the buying and
selling of cryptos. The biggest and best-known crypto exchange, Coinbase, is
reportedly looking at going public. Coinbase has been approved by Visa (V)
as a principal member, so it will be easier for users to spend their cryptocurrency
like they would cash in a regular old bank account.
So the real question is… Can bitcoin gain 250% faster than
the Dow gains 50% to get to 40K first?
I say yes.
Bitcoin is already breaking out, which brings me to the
three charts I want to show you. Let’s start with bitcoin. It has gained more
than 50% so far in 2020 and blown away the Dow’s 6% loss.
Now I want to show you the second chart, which is another
cryptocurrency called Ethereum. It has the second largest market cap behind
bitcoin. It is only about one-fifth the size of bitcoin, but it’s still more
than three times bigger than the third-largest coin, XRP.
Ethereum has broken out even more impressively than bitcoin.
Looks like a carbon copy of bitcoin’s chart, doesn’t it?
But when you look at the percentage move, Ethereum’s is even
A nearly 60% surge in a little over two weeks has sent
Ethereum to its best level in a year. It is by far the best performer of the
big cryptos, and its recent breakout is a great sign for bitcoin as well as the
You can see that big moves in cryptocurrencies aren’t just
possible. They happen.
Bitcoin is the bellwether, and its success will attract more
money into the cryptocurrency market.
Bitcoin’s success and its surge in price after previous
halvenings give us even more confidence in the future and my bet that it gets
to 40K before the Dow.
I can’t wait to talk more about it tomorrow. Louis and I
will see you then.
On Wednesday at the Dow vs. Bitcoin: The Race to 40K debate, I’m sure my colleague Matt McCall will make a strong case for cryptocurrency investing. I’ve gotten a peek at his research myself. But I can already tell you: There’s every reason to expect the Dow stocks to win the Race to 40K. In fact, I can give you five reasons here today!
The first one is very simple…
1. Our market is an oasis for the world.
This is a point I’ve made many, many times in the last few
years. And that’s still the case even during the COVID-19 pandemic.
For example, our GDP report may have rattled a lot of
people, but it was better than expected. It was certainly better than
Germany’s; Germany’s contracted even more, when you annualize it. (The European
numbers are quarter by quarter; our numbers are annualized.)
True, we’re likely looking at a U-shaped recovery, not the V-shaped recovery we’d all hoped for. I’ve been very honest about that. And that’s largely because of the employment situation. But help is on the way, with the Trump administration throwing lots of money for domestic manufacturing of COVID-19 vaccines in this “Operation Warp Speed.”
2. Interest rates are incredibly low.
I touched on the interest rate environment on Thursday and
how when the Federal Reserve is keeping bond yields next to nothing, stocks
become much more valuable.
Now here’s another effect: Companies can go out and refinance
their debt at ultra-low rates. That certainly includes the big Dow companies,
like AT&T (T). So that’s going to help their cash flow, their
earnings, their bottom line. That, in turn, should boost their share prices.
And these Fed policies also have yet another effect…
3. The U.S. dollar is having a really bad month.
You might think, “The dollar is weak? That’s horrible!”
Well, not really. Ironically, a weak dollar is good for multinationals, and
half the S&P 500 companies’ sales are outside America…which means it’s paid
in foreign currencies. If those get stronger against the dollar, that’s
actually more money for many of our companies.
4. Trading volume has been light on the downside.
All this is not to say that our stocks will go nowhere but
up. Their recovery hit the brakes last week, in fact. But the key with any
sell-off is the volume. As long as trading volume is light and there’s no panic
selling, we’re okay.
So, don’t worry about the gyrations; take advantage of them
with stocks like the free pick I’ll be giving away at Wednesday’s Race to 40K debate. As
long as the trading volume remains light, there’s nothing to be too concerned about.
Also, it’s important to keep in mind that August is a
seasonally weak month. The reality is that the market is plagued by with low
trading volume given that Wall Street and Europe are on extended summer
This opens the door for unscrupulous short traders and scam
artists who try to manipulate stocks with false rumors and bogus reports.
But perhaps people aren’t as enthusiastic sellers lately
because they’ve noticed the same thing I have…
5. This earnings season has been stunning.
I always watch corporate earnings very closely. And the
magnitude of the earnings surprises, even the sales surprises have been nothing
less than incredible.
Some bad earnings will come out later, and good earnings
tend to come out early; that’s just normal for the market. But by and large,
I’m very, very pleased!
Let’s just look at the “FAANG” stocks as a quick example. Here’s
how their revenue and earnings numbers rang up:
Facebook (FB), Apple (AAPL), Amazon (AMZN),
Netflix (NFLX) and Google (GOOGL) all beat analyst expectations
on their second-quarter revenues. The first four turned in double-digit sales
growth (while Google was down slightly).
And most of the FAANG companies beat handily on earnings, too…especially Amazon. While Wall Street expected more like $1.65, Amazon ended up turning in $10.30 per share! That was nearly double the year-ago figure. (Remember, company management initially guided to a second-quarter operating earnings loss , as they planned to spend at least $4 billion to adjust to the coronavirus pandemic.) Netflix, too, ended up doubling EPS, year-over-year.
As I’ve made clear to readers like you, technology is what
is getting a lot of us through these tough times… whether it’s communicating
online, shopping online, or getting entertainment online.
Technology is also Matt’s basis for saying bitcoin will win The Race to 40K.But the
proof we’re seeing NOW is coming from the publicly traded companies.
It’s certainly being reflected in these earnings
announcements from Big Tech. Despite the sharpest economic crash in decades,
all the FAANG companies were profitable in the second quarter – some far more
than the analyst community expected!
And if, in the second quarter, other companies miss their
estimates…well then, the money just get reshuffled to other stocks for the
reasons I mentioned above. (Since I only recommend the highest quality
companies as per my Portfolio Grader scans, that money’s going to come
Now how about the future? Well, that’s just as uncertain for
our biggest companies as it is for anyone else…
Facebook is currently dealing with a boycott triggered by some of the hateful, violent and misleading content that’s popped up on its platform. Microsoft (MSFT), Coca-Cola (KO) and Ford Motor (F) are some of the companies to have pulled ads from Facebook. Smaller companies may have to pull back on ads, too, simply because of the COVID-19 impact.
Apple’s sales are getting a bump from stimulus check spending, a phenomenon that won’t last forever. Even so, in the last quarter, iPhone sales were down slightly (though services, iPad and Mac sales all increased nicely), and Apple has been forced to delay the new iPhone by “a few weeks.”
Amazon has already forecasted that its revenues will ease off the gas a bit in the third quarter, with 24% to 33% growth…though it did not provide earnings guidance.
Google also foregoes earnings guidance. And of all the FAANGs, it might have the most exposure to the economic standstill – as it makes more than three-quarters of its money from advertising. And ads for things like travel deals are not big business right now.
Netflix doesn’t expect its luck to last, either: “In Q1 and Q2, we saw significant pull-forward of our underlying adoption leading to huge growth in the first half of this year…we expect less growth for the second half of 2020 compared to the prior year,” as per the earnings announcement.
I don’t say this to cast any doubt on the market as a whole;
far from it! I simply want you know that there may be better specific
buys for you right now. Ones that offer exposure to powerful long-term trends.
As you know,
I have a bet with my InvestorPlace colleague, the legendary growth investor
Louis Navellier, about whether bitcoin or the Dow Jones Industrial Average will
hit 40K first.
It’s a fun
bet for charity, but the ideas behind it are quite serious. I’m glad you’ve
signed up to hear us both make our cases next Wednesday, August 5, at 4 p.m. in
The Race to 40K debate.
read our recent articles, you know I’m also very bullish on stocks and agree
with Louis that Dow 40,000 could happen in the near future.
But my best
is that bitcoin will get there faster.
Let me give
you a sneak preview of a few reasons I’m convinced that will happen
bitcoin is already hot and bullish sentiment is soaring. It broke through
$11,000 on Monday on strong volume, climbing 13% for its biggest single-day
gain in nearly three months.
It is up
over 55% this year, almost double gold’s increase, while the Dow Jones
Industrial Average is down more than 8% – although it’s made a fantastic 40%+ climb
off its March 23 bottom.
$40,000, bitcoin still needs to climb 250% from its current level.
makes a lot of sense when you start to consider two big catalysts. One is
increasing mainstream adoption. It’s simply becoming more and more a part of
our everyday lives.
swirling that digital payments leaders PayPal (PYPL) and its smaller
mobile payment service Venmo both plan on rolling out cryptocurrency buying and
selling to users soon. Venmo has 52 million user accounts and PayPal has 325
million. That’s 377 million more potential customers coming online!
Square (SQ), another digital payments firm
helmed by Twitter (TWTR) CEO Jack Dorsey, allows bitcoin purchases in
its Cash App – and the feature keeps gaining popularity.
The company reported
$306 million in bitcoin revenue in its first quarter, handily beating the $222
million in revenue on all of its other traditional currency services for the
government also moved in a big way to open up crypto investing to more
the Office of the Comptroller of the Currency said it will finally allow
federally chartered banks to custody cryptocurrency.
we’ll soon see a major bank step up and begin storing crypto for its customers,
which means even more folks will be able to invest in bitcoin.
Another big reason
I think bitcoin will reach 40K faster than the Dow isn’t a future event that might
happen. It’s something that’s already happened.
It occurred less
than three months ago. It didn’t get much coverage, but it was a trigger that’s
set to send bitcoin soaring. After all, it’s happened before.
time this event happened in 2012, bitcoin shot up 2,135%.
time it happened in 2016, bitcoin rose 3,122%.
The third time
was on May 11, 2020.
If we get
even one-tenth of the gain we saw in 2016, $40,000 is a done deal.
about the “halvening,” or “halving” as it’s also known. That’s when the reward
for mining a bitcoin is cut in half.
Up until a couple
months ago, a “bitcoin miner” received 12.5 bitcoins for mining a block. Miners
today receive 6.25 bitcoins as a reward.
result is that ALL bitcoins are more valuable.
halvenings prior to 2020 show it takes a little time for bitcoin to take off.
Bitcoin started to go vertical about five months after the halvening that took
place in November 2012.
In 2016, the
halvening took place in July, but bitcoin didn’t start to soar until almost a
breakout could well be the start of this next big move, so you haven’t missed
out. In fact, you could be in the perfect position to capitalize on bitcoin’s
next big boom.
exactly what Louis and I will talk more about in The Race to 40K next
Wednesday, August 5, at 4 p.m. ET. It’s going to be a lot of fun and
who doesn’t love talking about big moneymaking opportunities?
Hello, folks. If you’re anywhere near as excited as us about
Dow vs. Bitcoin: The Race to 40K, a
live event that I am hosting with my fellow Investorplace analyst Matt McCall next
Wednesday at 4 p.m. ET, then you know that there’s an incredible
opportunity ahead of us.
Thanks for locking in your seat to this webinar event. As
you know, Matt and I both see the market rallying over the next year; however, I
expect Dow will reach 40,000 first while Matt looks for bitcoin to hit the 40,000
Let me start off by saying that I hope you’ve enjoyed the
articles from Matt. As far as my articles go, we have talked about why I think
stocks are the best game in town. On Thursday, I explained why interest rates
could be a catalyst to push the Dow from 26,000 to 40,000, making it not just
possible – but probable.
The reality is
the Dow reaching 40,000 is going to be a huge milestone for bullish investors.
I am certainly looking forward to the massive bull rally over the next year!
However, I don’t even need a bullish market to maximize gains in my portfolios,
thanks to the beauty of my stock-picking system.
No matter the
market environment, my tried and true Portfolio Grader has helped me
find all of the biggest winners in my career.
So, today, I want to share the “secret sauce” behind my
growth investing strategy.
Now, every stock I recommend must pass these 8 critical
Sales Growth: the percent change in a company’s sales this quarter versus
the same quarter last year. Companies that show increasing sales at a very high
rate are among the best candidates to become big winners over time. If a
company can continually increase sales over long periods of time, then it would
seem to indicate that they have a product or service that is very much in
demand. I look for companies that show year-over-year sales growth of 20% or
Operating Margin Growth: the profits left
after direct costs such as salary and overhead are subtracted. I then look at
whether this percentage margin is contracting or growing year-over-year. A
company’s operating margin will increase when its product is in such high
demand that the company can continue to raise prices for the product or service
without an offsetting increase in costs.
Earnings Growth: the percent increase in a company’s earnings per share
(EPS) this quarter versus the same quarter last year. EPS is just the company’s
earnings divided by the number of shares they have outstanding. Naturally,
companies that are continually growing earnings year-over-year get a higher
score than those that aren’t.
Earnings Momentum: how rapidly a company’s earnings have been accelerating
over the past four quarters. Companies that are accelerating and growing
earnings faster year-over-year are stronger candidates for my Buy Lists than
those where earnings are slowing.
Earnings Surprises: a company’s ability to exceed the consensus earnings
estimate among Wall Street analysts. Here I am looking for stocks that can
exceed what Wall Street believes they can achieve. Stocks that deliver positive
surprises for several successive quarterly earnings periods often go on to
become growth stock megastars.
Analyst Earnings Revisions: the size of raised magnitude in which earnings projections
have increased over the past month. When an estimate is raised, it has
tremendous positive implications fora company and its stock. If the expectation
is up, then the stock should be worth more —and rise in price to reflect that
Cash Flow: the money the company has left after paying the cost of
doing business and the upkeep and the maintenance needed to stay in business
(relative to its total market value). In simple accounting terms, free cash
equals operating earnings minus the capital expenditures needed to run the
business. This is especially important for dividend stocks. And in a bear
market, analysts suddenly emphasize this part of the balance sheet above all
others. It shows if the company has the liquidity it needs to ride out the
Return on Equity: a company’s profitability in terms of profits made from the
money shareholders have invested. It is calculated by dividing the earnings per
share by the equity (book value) per share. The higher the number, the more
profitable a company is, and the higher return management is providing to
From there, a
stock must also prove its mettle, so to speak, on Wall Street. When it also
earns a strong Quantitative Grade (my proprietary measure of institutional
buying pressure), it becomes an urgent buy in my Portfolio Grader.
allows me to avoid the bad stocks and also signals when to sell a stock if its
fundamentals begin to deteriorate or institutional buying pressure dries up. By
concentrating on the numbers, my system takes the guessing out of picking
Corporation (CYBE), a company specializing in 3-D sensing technology solutions,
for example. When the company smashed earnings in the first quarter of this
year, my stock-picking system upgraded the stock from a Hold to a Buy. I told
my Breakthrough subscribers to buy the stock in May, due to the positive
earnings forecast and strong fundamentals that my system picked up on.
released its second-quarter earnings announcement last week and, once again,
crushed expectations, with an over 200% earnings surprise! The stock is sitting
pretty at a 29%
gain in less than three months since my initial recommendation!
And I’ve got much
more where that came from. At my debate Wednesday with Matt McCall, I’ll be
giving away another of my favorite Breakthrough Stocks, to prove the
exciting opportunities available for stock investors right now.
In the meantime,
you’ll be hearing from Matt tomorrow. He’ll share some of the positive rumors
swirling around in the cryptocurrency community, as well as the major catalyst
he’s eyeing to win our bet, The Race to 40K.And
then Monday, I look forward to talking with you about the earnings environment
that helps make MY case for stocks!
set up an exclusive website with resources
you may want to peruse prior to our debate on Wednesday at 4 p.m. ET,
where Matt and I will thoroughly debate whether stocks will reach that
milestone first, or if bitcoin will. I’m very confident I’ll win. And that
you’ll see the explosive potential of the stocks my Portfolio Grader is
uncovering now. You don’t want to miss it!
Again, I’ll be
giving away one of my favorite stock picks on Wednesday…and remember, this
event is 100% free, no strings attached.
As I say, I’m
putting my money where my mouth is – and so is Matt. He’ll also be giving away
a pick for free, to help investors profit as bitcoin also climbs to 40K.
I’d never bet
against Matt, long-term. I simply think that my horse in this race will get
Louis Navellier is a legendary growth investor with an
impressive track record. He’s made money for a lot of people, and he’s worth
Yesterday, he explained to you why he is confident the Dow
will hit 40,000 before bitcoin.
Louis made the case that stocks are the “best game in town”…
better than commodities, bonds, and even cryptocurrencies. (I’ll say my piece on
that in a moment.) He said that every time the Fed has pushed rates lower, it’s
provided more “juice” for the market.
In fact, Louis pointed out that stocks are five times as
valuable to investors as bonds, so you can see how the Dow from 26K to 40K
starts to look not just possible – but probable.
Here’s the thing. I don’t disagree with Louis. I’m just as
bullish on stocks as he is. We even work together on an investing service.
Stocks are one of the best games in town, but I
believe there’s an even better game out there. One that will also hit 40K…
and I believe will get there even faster than the Dow.
I’m talking about cryptocurrencies – and bitcoin in
Bitcoin has been setting up exceptionally well recently. So
well, in fact, that it’s set up to rally more than 250% in the coming years to
that milestone $40,000 level.
I know that’s a bold statement, but I’m confident in it.
The latest episode of
my MoneyLine podcast was just released this afternoon, and I want to make
sure you know about it because in it I give a sneak peak of what Louis and I
will be debating next week at our event called The Race to 40K. Your
registration is confirmed.
Believe it or not, bitcoin isn’t the only cryptocurrency that’s
set to skyrocket in the coming months and years. There’s a select group of
altcoins that will be even bigger profit-machines, and I’ll give you those details in the podcast
If you’ve never tuned in to one of my MoneyLine podcasts, I
recommend checking it out. I cover all aspects of the market, and this week I
talk not just about the Dow versus bitcoin but also the latest GDP number, second-quarter
earnings, and an amazing buying opportunity in biotech stocks. I even go into
the return of sports (thank goodness they’re back) and what stocks will be big
winners as things start to get back to normal.
Now… let’s circle back to that massive opportunity in
I believe we’re at the beginning of what will likely be
bitcoin’s next big breakout – a rally that will send the leading cryptocurrency
back to its all-time highs near $20,000 and beyond.
Bitcoin spent the first couple weeks of July consolidating
just above $9,000. This type of action is significant in the world of technical
analysis. When a stock, crypto, or any asset class consolidates for an extended
period, it usually leads to a big move.
Odds are that big move will be in the direction of the
current trend – which for bitcoin is up.
The longer the consolidation and the narrower the trading
range gets, the higher the likelihood of a major move. And bitcoin fits the
It’s long and narrowing consolidation pattern was followed
by a breakout through $10,000 for the first time in seven weeks… and then it powered
Since July 20, bitcoin is now up more than 22%. That’s in
just 11 days!
And I’m confident this is only the start.
I think it’s only a matter of months before bitcoin is back
at $20,000. And from there the sky opens wide up to $40K.
But the recent trading action isn’t the only reason I’m so
confident that bitcoin will beat the Dow to those record levels.
Something happened three months ago that set bitcoin on its
path to new highs. That same event occurred two previous times, and in the
months that followed bitcoin soared thousands of percent.
I’ll explain what happened in more detail on Sunday –
including why I’m confident we’re about to experience the same sort of
Louis will be back in touch tomorrow to try to convince you
that the Dow will win the race to 40K. But stay tuned for what I have to say on
I hope you’ve marked your calendar for Wednesday, August
5 at 4 p.m. ET, when Louis and I will sit down together and have our 1-on-1
debate. We both have many reasons to back up our claims, and either way you’ll
learn how to set yourself for life-changing profits.
First, let thank you for signing up for our Race to 40K event next Wednesday.
I’ve prepared some great material to explain why Dow 40K is
a real possibility in the next 12 months … and I know Matt is preparing his
material on why he thinks Bitcoin will get to 40K first.
Today I want to explain why I still believe stocks are the
best game in town. I’ve been saying that for years now – but I wouldn’t keep
saying it if it weren’t true.
Commodities? Forget it. One minute, you’re up at $100 per
barrel oil. The next minute, someone like Saudi Arabia decides to start a price
war, and prices crash back down again to $20. (In fact, as we learned this
spring, it can get even worse than that. When COVID-19 struck worldwide, oil
prices crashed all the way into negative territory.)
Bonds? You can forget those, too. In fact, the Treasury
yield situation has gotten so extreme that I believe it will push more capital
into the stock market than ever before.
That’s because we’ve never seen such a sustained push to
near-zero interest rates. Even before COVID, rates had been very low for years.
And until world economies regain their former glory, there’s no end in sight.
In June and July, we’ve seen the beginnings of a tremendous, sharp rebound in jobs and economic activity. But as much as we’d all like that recovery to be V-shaped, the Federal Reserve disagrees. They still expect a U-shaped recovery, which is why they’re still working overtime to manage the “yield curve,” so that long-term interest rates don’t fall below short-term rates and damage the banking system. The 3-, 5- and 7-year Treasury yields hit record lows. We had a very successful 30-year Treasury bond auction. And not just that, the 10- and 20- year Treasury yields are ultra-low right now, too, in addition to the 30-year.
Let’s take a look back at the market action since February:
a perfect example.
I’m sure you’ll remember that sharp drop starting February
20. Since then, the Fed has intervened several times, and I’ve marked the major
dates in green circles above.
You’ll see that the first emergency rate cut (from 1.75% to 1.25%) on March 3 produced a sharp uptick in stocks. But then COVID-19 outbreaks began in earnest on American shores. On March 15, the Fed announced another cut to zero (where the Fed Funds rate remains today), as well as “at least $700 billion” in quantitative easing (QE). And the S&P 500 is up about 20% since then.
You’ll also notice that the Fed’s biggest monetary intervention – more QE, more lending to banks and to “Main Street” – coincides with the bottom for stocks: March 23. Since then, the Fed has been implementing and adding to these programs at various points. And the market gain is even more drastic, around 40%.
On Tuesday, the Fed just extended all emergency lending programs through 2020. So we’ll see the magnitude of the impact on the market’s bull run from here. I gave the “all-clear” for growth investors to start buying again on April 15.
My Portfolio Grader has been uncovering “Strong Buys” all the while. And the performance has been strong confirmation of my picks. My Top 5 Breakthrough Stocks, for example, have now reached gains as high as 75%, even 100%!
And that’s even with the big pause in economic growth
worldwide. I’ve been extremely careful to own companies that can grow sales and
earnings by double- and triple-digits in this environment. Imagine what they’ll
do from here. I call these the “crème de la crème,” and the earnings potential
may even be BETTER for these companies than what’s showing up in the numbers
So, this gives you a sense of how stock gains are “baked in”
to the economic recovery. That’s even before you get into the fact that stocks
yield so much more compared to bonds…
Right now, the dividend stocks in the Dow yield 3.14%. The 10-year Treasury bond yields just 0.58%.
In other words, Treasury yields would have to grow five
times to catch up to stocks. As they do, dividend yields will also climb
proportionally – making stocks even more attractive.
So…given that stocks are five times as valuable to investors
as bonds…you can see how the Dow going from 26K to 40K starts to look not just possible – but
Now that you see where I’m coming from, be sure to tune in
to our debate on Wednesday at 4 p.m. ET, where Matt McCall and I will
debate whether stocks will reach that milestone first, or if bitcoin will. I’m
very confident I’ll win. And that you’ll see the explosive potential of the
stocks my Portfolio Grader is uncovering now.
In fact, I’ll be giving away one of my favorite stock
picks on Wednesday…and, again, this event is 100% free, no strings
As I say, I’m putting my money where my mouth is – and so is
Matt. He’ll also be giving away a pick for free, to help investors profit as
bitcoin also climbs to 40K.
Tomorrow, you’ll be hearing from Matt as to why he thinks
Bitcoin can beat the Dow to 40K.
I’d never bet against Matt, long-term. I simply think that
my horse in this race will get there first.