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Posted December 11, 2020

Ray Blanco

By Ray Blanco

Where the Market Goes From Here

Today were digging into the mailbag to answer questions Ive received over the past month.

Well touch on a variety of topics, and Ill give my thoughts as briefly as I can.

First, probably the most popular two-part question Im getting right now

Do you see the market continuing upward heading into 2021? And will tech continue to lead the charge?

Yes, I think its possible the market continues to move higher headed into 2021. However, stocks will not go straight up. They never do.

Never discount the possibility of down days, sideways days, even days of mild panic for stocks.

But all things considered, from strong earnings to further stimulus hopes, COVID-19 vaccine rollout and the buzz around Teslas inclusion in the S&P 500

I would say the markets generally have a tailwind that could keep current trends in place.

As to the second part of the question, will tech continue to lead? The answer is yes.

Tech as a theme has, in short, taken over everything.

Consider Airbnb Inc.s (NASDAQ: ABNB) debut on Thursday.

Shares shot out of the gate up over 114% and ABNB closed with a market cap of $101 billion.

ABNBs a tech darling, of course: a hospitality play that doesnt own a single room, a vacation rental company that doesnt own a single piece of vacation property you get the idea.

Tech stocks like ABNB are also often described as being disruptive and game changing. I know how tough it can be to separate the good names from the hyped-up ones.

The point is if a company can fit a broad definition of tech right now, the market has an appetite for it. This makes finding new names to invest in fun and exciting.

Its also a reason to do diligent research and exercise caution. Never fall into the trap of buying a stock just because you convince yourself it fits into some larger tech trend.

I have only the slightest hunch where ABNB shares, for example, are headed next.

Im going to stick to our core ideas like biotech, satellite internet and electric vehicle battery technology to find our new investing opportunities.

Those are all tech themes with long, profitable track records.

What About the Rise of Bitcoin?

This next question has become much more popular in recent weeks

What is your take on cryptocurrency as an alternative means to protect cash in bank holdings?

Broadly speaking, having a diversified portfolio is better than not having one. However, cash in the bank is a safe harbor itself.

Thats not to say, however, that its a bad idea to take a slice of hedge allocation (gold holdings, for example) and dabble in cryptos.

Every situation is different, and it boils down to making investing decisions you feel good about that also allow you to sleep at night.

If volatility isnt your thing, crypto isnt for you.

My colleague Robert Williams wrote what I thought was a fantastic piece on Bitcoin versus gold on Tuesday this week.

Its a timely look at where Bitcoin stands in the financial ecosystem here in late 2020.

For more on cryptos place in our future, you can read Roberts piece by clicking here.

Clearing out the Rest of the Mailbag

Next up

What is going on with Apple-Fi?

As youve likely read, and as Ive written several times in recent weeks, the Apple-Fi core thesis remains intact

But Elon Musks Starlink is moving much faster, launching satellites by the dozens and rolling out wider beta service to rave reviews.

In time, the evidence still tells me there will be room for multiple winners in this space, and the companies Ive assembled in Technology Profits Confidential all stand to do well.

Speaking of multiple winners

If Johnson & Johnson comes out with a one-shot COVID vaccine versus Pfizers and Modernas two-shot vaccines, does that make J&J a better investment?

Not necessarily. What counts most is that the vaccines can be produced at scale and distributed safely to all those who need them.

Moderna shares, for example, are up about 8x year to date. A two-shot vaccine course did not slow down Moderna one bit in recent months.

Thanks for reading, and please send me more questions. You can reach me at Id be happy to write another of these mailbag issues again soon!

To a bright future,

Ray Blanco

Ray Blanco

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