Peter Clausi with David Morgan on the rising interest in silver for 2021

In a recent InvestorIntel interview, Peter Clausi speaks with David Morgan of The Morgan Report, about investing in silver, the silver market and the source of the rising demand.

In this InvestorIntel interview, which may also be viewed on YouTube (click here to subscribe to the InvestorIntel Channel), David went on to say that he is bullish on silver and also commented on the gold to silver ratio. He said, “It is good for looking at long term trends and preview what you might use as an exit strategy.” He further added, “Gold has outperformed at this time, but silver is catching up and will continue to outperform.”

“Based on our current economic situation globally you should have some physical metal,” David commented. “Then you gain leverage by going into mining equities. A lot silver stocks have done quite well.”

To watch the complete interview, click here
Or to subscribe to The Morgan Report, click here: You Can Make a Killing Even In These Uncertain Markets (themorganreport.com)

To access InvestorChannel’s daily Silver Watchlist of the top 20 silver companies that David Morgan has selected for us to watch in the public markets, go to Silver – InvestorChannel




eResearch’s Chris Thompson on initiating coverage of Organic Garage and the healthy food market

In a recent InvestorIntel interview Peter Clausi speaks with Chris Thompson, CEO, President and Director of Equity Research at eResearch Corporation on initiating coverage of Organic Garage Ltd. (TSXV: OG), a health food grocery retailer that offers “healthier food for less”.

eResearch recently published an Initiation Equity Research Report on Organic Garage Ltd. on November 11, 2020 with a Buy rating and a target price of C$0.30. In addition to discussing his career history with Peter, Chris explains how COVID-19 provided a positive impact on the health food sector. Chris also described Organic Garage as an undervalued stock and potential catalysts for share price appreciation.

To watch the full interview, click here.

About Organic Garage Ltd.

Organic Garage (TSXV: OG) is one of Canada’s leading independent organic grocers and is committed to offering its customers a wide selection of healthy and natural products at everyday affordable prices. The Company’s stores are in prime retail locations designed to give customers an inclusive, unique and value focused grocery shopping experience. Founded in 2005 by a fourth-generation grocer, Organic Garage is headquartered in Toronto. The Company is focused on continuing to expand its retail footprint within the Greater Toronto Area.

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The Astrologers Fund’s Henry Weingarten on the Biden market winners – copper, gold and critical materials win.

In a recent InvestorIntel Interview, Tracy Weslosky speaks with Henry Weingarten, Fund Director of The Astrologers Fund, Inc., about the current market trends and the likely triggers for the market to be up.

In this InvestorIntel interview, which may also be viewed on YouTube (click here to subscribe to the InvestorIntel Channel), Henry went on to say, “If you own copper stocks you should stick with them.” He also said that gold is doing well and added, “we are on our way to $2,000 by the year end.” He also expressed his positive sentiments for oil and said that critical materials like rare earths and lithium are very good long term investment.

To access the complete interview, click here




20-year day trading pro Guy Gentile talks about spotting the algorithms to not get hurt

“Every day they are tweaking those algorithms to try to take advantage of the market,” says Guy Gentile, Founder of DayTraderPro in an interview with InvestorIntel’s Tracy Weslosky on what it takes to be a successful day trader. “What I basically do is try and spot what the algorithms are trying to do and try to best trade around them, so that we can make money and that my followers and my community don’t get hurt in trading.”

Guy went on to share some of the strategies he follows while trading stocks – where the opportunities are and what you can’t control. He said that trading is also about risk management and cautioned that day trading is not for everyone. He expects to see more regulations in the day trading space, but “brokerage and trading education businesses are going to well in a COVID environment and also in a post COVID environment.”

To access the complete interview, click here




A look at some combined disruptions for the 2020s – Searching for the next Amazon or Tesla

Investors who invested early into disruptive companies made a fortune. Amazon (NASDAQ: AMZN) listed in 1997 at US$18, and today is at US$2,653, for a 147x gain in 23 years. Tesla (NASDAQ: TSLA) listed at US$17 in 2010, and now trades at US$1,003, handing investors a 59x gain in 10 years. Netflix (NASDAQ: NFLX) listed in 2002 at US$15, and today is at US$449, for a 30x gain in 18 years.

Returns like these are life changing events for many shareholders who saw the disruption early. Just $10,000 invested into Amazon would now be worth a staggering US$1.47 million, into Tesla it would be worth US$590,000, and into Netflix it would be worth US$300,000.

Tesla has risen over 5,000% the past 10 years, recently outperforming Netflix & Amazon

Source

In each case there was a major disruption – Online shopping for Amazon, electric cars for Tesla, and online video on demand for Netflix. Once you determine a disruption is coming then you need to determine the potential winning stock.

Looking ahead to the 2020s I think we are likely to see several combined disruptions. This means the potential is there for the winners to make exceptional returns. Below I look at five combined disruptions and who may be a potential multi-bagger winner for each one.

Electric Vehicles/ride sharing/Autonomous Vehicles/TaaS/delivery

There is now very little doubt that the 2020s will see electric vehicles (EVs) disrupting conventional vehicles. EV market share of new car sales in 2019 was 2.5%. Bloomberg forecast this to be 28% share by 2030 (~24 million new EVs pa), and 58% share by 2040 (~54 million pa). I think from 2023 onward, when an EV costs the same as a conventional car to buy; it will make no sense to buy a conventional car when an EV has 5-10 times cheaper running and maintenance costs. My model suggests that by 2030 EV market share should be 36% or higher, with raw materials and production bottle necks being the limiting factors. That would mean a 14x increase in EVs by 2030. That’s a disruption.

Combined with the above we will see ride sharing EVs, autonomous EVs, transport as a service (TaaS) EVs, and delivery (including drones) EVs.

My potential winner is summarized by the phrase ‘Tesla will be the new Tesla’. Tesla will grow by many multiples from today, and will continue to disrupt and dominate the transport sector. Yes the stock is up 59x since IPO, but it has potential to still increase many fold from here. This is because the EV disruption has only just begun and can be across ALL forms of transportation. Also because Tesla is also disrupting other sectors such as energy storage, solar, and perhaps one day TaaS (‘robotaxis’) and energy production.

For a smaller stock with potential in this area I like Exro Technologies Inc. (CSE: XRO | OTCQB: EXROF).

‘Tesla will be the new Tesla’ – The EV disruption has only just begun led by visionary Elon Musk

Solar & wind/energy storage

Apart from hydro, solar is now the cheapest form of energy production in most places around the world. Wind is not so far behind. This will mean the 2020s will see a massive disruption by solar and wind power generation, replacing conventional fossil fuel electricity generation such as coal and gas power stations. Lithium ion battery and other forms of energy storage will enhance the solar & wind energy disruption.

My potential winners from the 2020s solar disruption are:

  • Solar generator (solar parks) – Sky Solar Holdings Ltd. (NASDAQ: SKYS)
  • Solar roof/panels & Li-ion battery energy storage – Tesla (NASDAQ: TSLA)
  • Solar inverters – SolarEdge Technologies Inc. (NASDAQ: SEDG), Enphase Energy Inc. (NASDAQ: ENPH)

Solar (PV) and wind are the cheapest sources of electricity in most locations globally (excluding hydro)

Source

Artificial Intelligence/cloud/5G/IoTs/robots & subscription revenue models

The Artificial Intelligence (AI) disruption is still in the early stages. AI will enable or combine with the cloud, 5G, the Internet of Things (IoTs), and robots to disrupt many industries. Some examples already are online bots replacing humans and voice and facial recognition for call centers and surveillance.

My potential winners from the 2020s AI disruption are: Nvidia (NASDAQ: NVDA), Skyworks Solutions (NASDAQ: SWKS). We could also add in existing winners that use AI extensively such as Facebook, Alphabet Google, and Apple. The later is already strong in subscription services. For a smaller stock with potential in this area I like Predictmedix Inc. (CSE: PMED | OTCQB: PMEDF).

Internet – Streaming/social media/shopping/e-commerce/online education/work from home platforms

Streaming on demand using the internet is rapidly replacing conventional TV and cable TV. Social media continues to grow users and online shopping and e-commerce continue to gain market share. Within the e-commerce sector payments and other banking services (lending, investments) should be a major disruptive theme in the 2020s. We will see online neobanks with no branches offering discounted mortgage lending rates. Another big advance will be in online education and working from home.

My potential winners from the 2020s payments disruption are: Mastercard, Visa, Paypal, Tencent, Alibaba, Apple, and Samsung Electronics.

For the neobanks disruption: GoBank (owned by Green Dot Corp. (NYSE: GDOT)).

My potential winner from the 2020s work from home disruption is: Slack Technologies (NYSE: WORK).

Reusable rockets enabling global satellite internet/space travel/rapid long haul earth travel

Reusable rockets have resulted in cheaper space travel essentially disrupting NASA and others. In the 2020s this will lead to a low earth global satellite network to serve rural and remote areas led for now by Starlink, owned by SpaceX (private). It will also lead to space tourism (Virgin Galactic already charges US$250,000 for a 90 minute flight), and possibly 1 hour flights across the earth that may disrupt the long-haul airline industry. The SpaceX Starship could fly from New York to Shanghai in 39 minutes, rather than the 15 hours it takes currently by conventional plane.

My potential winner from the 2020’s space disruptions are: Virgin Galactic (NYSE: SPCE), SpaceX (private, 54% owned by Elon Musk, ~7.5% owned by Alphabet in 2015), and Blue Origin (private, owned by Jeff Bezos).

Virgin Galactic offers a 90 minute space flight for US$250,000 per passenger

Source: Virgin Galactic

Closing remarks

Combined disruptions will likely have the biggest impact on shareholder returns. Some of the winners are already leading the early stage of disruption but still can offer investors massive returns as the disruptions gain traction (such as EVs). Others may not yet be well known or may be private stocks not accessible yet to investors, such as SpaceX.

Investors should look for companies that are leading the disruption and who have visionary owners. Many of the names in this article offer just that. Investors that can successfully pick the right disruption and the winning stocks stand to make enormous gains between now and 2030.

Which one is your disruptive 2020s stock and why?




What should investors do as USA-China tensions build over trade war, Hong Kong and COVID-19

The US-China trade war of 2018-20 followed by the COVID-19 global lockdowns in February-April 2020 have left many investors feeling jaded, as stockmarkets gyrated up and down. President Trump and Xi Jinping continue to battle with not much really being resolved. This time they are fighting over an investigation into COVID-19 and what will happen in Hong Kong. Hong Kong is the perfect example of the two super powers pulling in opposite directions.

Today I look at some events that are likely to soon happen and how investors can navigate these tricky times.

Protests in Hong Kong as US-China tensions rise again

From 2018 to 2020 both the US and China businesses suffered a steady increase in tariffs due to the US-China trade war. The biggest losers from the trade war were manufacturers of global goods, especially those traded between the US and China such as US agriculture. Globally the auto industry was hit hard, as was the electronics industry, as poor sentiment caused consumers to reduce their purchases. The main winners in the trade war period were cash, bonds, gold, rhodium, and palladium. In the US the best performing sectors were utilities, healthcare, and tech.

Then in 2020 we finally got a US-China trade ‘deal’. Unfortunately many tariffs remain and the COVID-19 crisis has meant China has not been able to stay on track with its side of the deal, notably US agricultural purchases.

A history of US-China tariffs from 2018 to Feb. 2020

Source

Fast forward to today and given the US and China appear unable to settle their differences the following events are possible to occur next:

  • The US may add additional tariffs on China if China goes ahead with “any decision impinging on Hong Kong’s autonomy and freedoms”.
  • The US may raise existing tariffs on China if China fails to meet its current obligations.
  • The US may look to boycott more Chinese companies, as they did with Huawei technologies.
  • The US may force Chinese listing companies to delist from US exchanges. Last week the US Senate passed a new Bill (Holding Foreign Companies Accountable Act), effectively stating that Chinese companies must play by American rules or be banned from U.S. exchanges. This requires Chinese companies being fully accountable both for their financials and their share registry (cannot be CCP controlled). Luckin Coffee (NASDAQ: LK) and Baidu (NASDAQ: BIDU) already have indicated they plan to delist.
  • The US will work to secure critical materials and safer supply chains with their allies. This has already started with uranium, and is proposed with rare earths and other key battery materials (Onshoring Rare Earths Act – the “ORE Act”) .
  • China may retaliate with tariffs on more US goods, or boycott US companies and their products.

Reference for ideas: United States Strategic Approach to The People’s Republic of China

The playbook for investors

Reduce exposure

  • Reducing or selling completely exposure to US listed Chinese companies. It would also be wise to do the same for any Hong Kong listed stocks. The same could be said for any Chinese or Hong Kong foreign exchange exposure, property, infrastructure or bonds etc.
  • Reduce or sell US companies with considerable exposure to China earnings. Some examples would include Foxconn, Apple, Qualcomm, and Starbucks.

Increase exposure

  • US stocks in sectors with minimal China exposure – US utilities, US healthcare & aged care, US food and consumables, some US tech (Alphabet Google, Facebook, Amazon, and Netflix).
  • Countries which will benefit from increased US trade or US supply chain shifts away from China – USA, Canada, Mexico, Australia, Vietnam, and maybe India.
  • Critical materials companies including uranium. The recent US ‘ORE Act’ lists 6 key critical materials – rare earths, scandium, cobalt, graphite, lithium and manganese. Investors should look for quality sources of these materials in the US or in US allied countries.
  • Gold stocks and physical gold ETFs (SPDR Gold Trust ETF (GLD) or iShares Gold Trust ETF (IAU)).
  • Other valuable metals related stocks – Silver, rhodium, platinum, and palladium.

Closing remarks

The trade war and now COVID-19 has finally served a purpose to wake up the US to get their manufacturing and supply chains back under control, and away from China’s control. This will mean we can expect to see further moves to secure critical materials by the US. Already we have seen the US uranium reserve announcements, and now the ‘Ore Act’ to secure the US for rare earths and critical battery metals supply.

In these rapidly changing times investors need to stay nimble and look forward to what will likely unfold next. The next battlegrounds between the US and China will involve the biggest trends of the 2020’s – Securing critical material supply chains, 5G, electric vehicles, solar & wind energy, energy storage, and of course the top tech trends (AI, cloud, streaming, eSports, social media, and mobile payments).

Finally a worst case scenario is we may be in for a full blown US-China cold war. In that case investors will do well to add some cash and gold stocks to their portfolio. But don’t forget some exposure to the key critical materials (and companies that produce them) as they will be the foundation for the 2020’s as we move into a cleaner and more automated/connected world.




COVID-19 – Sectors and stocks to benefit as economies are now reopening

Global coronavirus cases are now over 4.5 million with 303,078 deaths; however importantly global new daily cases have flatlined and healed new daily cases are now about the same as new cases. This should mean that the worst is behind us now. After much economic damage countries all around the world are opening up their economies. Today I look at sectors and stocks that can be winners as economies reopen.

The oil sector – A 2x long Oil ETF and a 3x US oil miner ETF

COVID-19 lockdown has decimated oil demand causing oil prices to crash from above US$60 per barrel to below zero (negative prices) in the space of 2 months. This meant at one stage you had to actually pay to give away oil, due to oversupply and a lack of storage.

Recent reports have shown that oil demand has now picked up considerably and along with supply cuts the oil price has started to recover strongly.

Two ways to play the oil recovery.

  • ProShares Ultra Bloomberg Crude Oil (UCO) is a long oil fund with 2x daily leverage to an index that consists of crude oil futures contracts.
  • MicroSectors US Big Oil Index 3X Leveraged ETN (NRGU) offers investors a 3x leverage to go long (bullish) on the collective of ten equally weighted US oil miners in the Index basket. The fund rebalances daily and uses derivatives, so is more suitable to sophisticated investors.

My preference leans towards NRGU as you are getting exposure to the actual mining companies, which in itself gives leverage over the WTI oil price.

The WTI oil price is starting to recover strongly after turning negative in April 2020

Source

The property sectoriShares Global REIT (REET)

The global property industry has suffered heavily during COVID-19 dropping around 35% due to increased vacancies and pressure on rents. The iShares Global REIT ETF is a recovery play as shops and offices reopen. The REET fund is very well diversified across the property sectors including residential, industrial, retail, offices, specialized (logistics, data centers), and health care; but there is a strong US country allocation of ~65%. The current P/CF is 12.18 and the dividend yield is 7.09%.

The cruise line industry – Carnival Corporation (NYSE: CCL)

Carnival Corporation is the world’s leading cruise line company, but it is currently shutdown and burning about US$4 billion pa. The Company has adequate cash reserves to last about 18 months, so should survive provided we are back again cruising at full speed sometime in late 2020 or H1, 2021. Risks are high but so are the rewards as the stock has fallen from US$54 a share to now sitting at US$12.27 a share, up slightly from its low point. 2020 PE is estimated at -3.67 and 2021 PE at 19.4.

A Carnival Corporation cruise ship at night

The airline sector – US Global Jets ETF (JETS)

The global airline industry has been decimated by COVID-19 lockdowns. Luckily many airlines are backed by governments and in the US the government has provided support with a $25 billion rescue package for US airlines.

The US Global Jets ETF (JETS) is mostly a recovery play on the US airlines sector, also with some global exposure. Airlines (86.4%) dominate the sector holdings, followed by air freight & courier services (5.48%), and aerospace & defense (4.96%). The current PE is 6.98 and the dividend yield is 3.22%. Other sites quote a negative PE as 2020 earnings will be negative.

The sun will shine again soon on the airline sector

Closing remarks

As countries begin reopening their economies those sectors hurt the hardest have potential to recover the most. Initially increased global activity should boost the oil sector. Next as consumers again visit malls and go back to work in offices, the property sector will begin to recover. Finally, later in 2020 or by early 2021 we should have seen a significant recovery in the airlines and cruise industry.

Right now braver investors have the opportunity to buy into these areas at bargain prices and low valuations. This of course assumes we do go on and recover relatively quickly and do not fall back into lockdowns and global depression. As a safety against the later it is always good to keep some gold and some cash.