QV end of year round-up – shares and cryptocurrencies to buy now

 

I have included this chart because for me investing/ speculating in bitcoin and other cryptocurrencies is mainly about charts. I don’t attempt to analyse the fundamentals or rationalise what is happening beyond the core point that bitcoin has limited but not completely frozen supply so there is liquidity and potentially unlimited demand. As you can see from the chart, in 2013, at the dawn of the bitcoin era. bitcoins were not perceived as having any value at all. One unfortunate computer programmer reportedly swapped 10,000 bitcoins for a pizza delivery. Fast forward to 2021 and those two pizzas cost him over $300m. It shows (a) that miracles can happen if you give them a chance and (b) that the bitcoin price could be anything – much higher or much lower than the current price and similarly for other cryptos.

I have alerted bitcoin nine times so far in QV for Shares starting at $3,540. Since then they have been on a wild roller coaster, which enabled me to alert them again nearly two years later at $5,711.  They are a classic buy and pray investment. My ultimate case for holding them is that they might go to some ridiculous price eventually. If they can top $30,000 anything is possible, precisely because they are impossible to value, like a Van Gogh painting, which can go from seemingly worthless daubs on canvas, which Van Gogh hoped to sell for $125 to a 1987 sale price for one of five versions of $40m in 1987  to virtually priceless today.

Going back to the bitcoin chart. It is very bullish. If the price went much higher from here technicians would look at that chart and not be surprised; that forecast doesn’t come with a guarantee but it does show the potential. The early price action also tells a story. As soon as people started to get their heads around bitcoin, the world’s first virtual currency, the price rocketed in months to over $1,000. It trades 24 hours a day, seven days a week, all around the world. This is an investment instrument, which is wonderfully explosive. It can plummet too so it is probably not the best home for cash earmarked to pay for your grandchildren’s school fees.

Sadly new regulations mean that from today it is no longer possible for non-professional investors to trade cryptocurrencies on IG, which is another example of the nanny state ensuring that only the rich can make even more money. The less rich are apparently too stupid and feckless to be trusted to take their own decisions.

 

 

This chart makes the case for investing in US shares. The Nasdaq 100 excludes financials like boring old banks but does include exciting fintech shares and is heavily weighted for technology generally. Since the 2009 bear market low point it is up over 12 times. Over the same period the FTSE 100 has less than doubled and is still below its all-time peak set in late 1999/ early 2000. Nevertheless, I still have to argue the case for US shares with some subscribers. The wonder for UK-based investors is that the world really is your oyster. People point to the tax advantages of UK investing, which is a great argument for believing that tax considerations should never drive investment strategy. I never invest in ISAs or SIPPs, even though in SIPPs you can hold US shares; I just buy and hold shares in the best companies.

I also treat investing as a game, which is really fun to play (as long as you make money, which I always do or at least have done over many years). My approach has not changed much. It is about finding shares in great businesses, buying them and holding them as long as they stay great (and I don’t get too many margin calls). What has changed, especially in recent years, is the number of great companies, which has increased exponentially and the powerful following wind driving the technology sector, which has steadily increased over recent decades and is now blowing at gale force. Most of the shares I hold are all about technology, creating it or applying it. I don’t hold any what I call old-school businesses and haven’t done for years.

Another key point is the way the US dominates technology although there are signs of life elsewhere, especially in China but in other places too. The best ones are usually obvious, by the way. If you have to think about whether a company is exciting or not; it isn’t. I sometimes get this wrong and think a company is exciting when it isn’t but that doesn’t matter because I spot most of the good ones and the duds are relatively few. The US dominates technology in much the same way as, in the 20th century, Hollywood came to dominate the global film industry

I also believe strongly in giving miracles a chance, as with bitcoin. If you don’t buy and you don’t hold you are never going to benefit if a business grows to the stars as some do. In the past I used to think there were only a handful of really exciting stocks so my portfolio held few shares, sometimes only one but usually three or four. I now work with larger portfolios because there are so many exciting stocks and that way you can spread your risk without giving up on the excitement. Most of the shares in the QV portfolio, around 227 at the last count, are good ones. The average gain on all stocks since I launched the service in 2017 is over 66pc. Not only is the portfolio large but the best performers are recommended again and again so that the average number of recommendations per stock is around six.

My default position with shares, once bought, is never sell. This saves a great deal of agonizing and is usually the right decision. My main sell signal is if  the company starts producing bad news and both main moving averages are falling; then I will step aside but even then I look for and often find opportunities to buy back in after the price collapse if the shares show serious signs of life. GetSwift, Wirecard and NMC Health are not coming back, not in this lifetime at least but others do recover because humans are persistent and ingenious creatures with an amazing ability to find a way.

One of the things I do at regular intervals is to go through the QV for Shares table and recommend the shares I like at that moment. I do this mainly based on the price action but with the confidence that all the shares are only in the table because they have great fundamentals, outstanding leadership and exciting prospects. If they weren’t 3G (great growth, great story, great chart) they wouldn’t be there. So the fact that I don’t write much about them in this list does not mean they are weak recommendations; quite the contrary. In the course of putting the list below together I made three investments myself and may well make more in coming days. Funds permitting I would very happily invest in the entire list of 60 recommended shares, roughly a quarter of all the shares in the table.

Incidentally, not being in the list is not remotely a sell signal. It just means I didn’t pick that particular share as a buy on 5 January 2021. Next month the list would and will be different. I haven’t done any special analysis of 2020 performance but I know it has been good, maybe very good. I don’t know how 2021 is going to turn out but, in general, I expect more of the same, albeit with new names coming into prominence and maybe even new sectors. Hopefully, I will be alert to new developments and keep you posted.

Last but not least, the object pf the exercise is to build a great buy and hold portfolio. Do that and the gains should look after themselves, albeit that there will no doubt be some scary moments. The list is long so I am just going to name and price the stocks. Take my assurance; they are all exciting companies with big ambitions. It has taken years of research and close attention to stock market trends to find them, albeit that Accesso is an exception that proves the rule, a dud that just may be flickering back to life.

Accesso  ACSO  Buy @ 445p  MV: £184m  Next figures: 18 March Times recommended: 4  First recommended: 2160p  Last recommended: 2700p

Activision Blizzard  ATVI  Buy @ $89.0  MV: $69.50bn  Next figures: 11 February  Times recommended: 5  First recommended: $61.45  Last recommended: $$82

Afterpay APT  Buy @ A$113.50  MV: A$33.5bn (£18.5bn)  Next figures: 3 March Times recommended: 9 First recommended: A$54.52  Last recommended; A$110

Align Technology ALGN  Buy @ $543  MV: $42.4bn  Next figures: 3 February  Times recommended: 6 First recommended: $254  Last recommended; $465

Ashtead  AHT  Buy @ 3600p  MV: £15.7bn  Next figures: 2 March  Times recommended: 9  First recommended: 1803p  Last recommended: 2879p

ASML  ASML  Buy @ $500  MV: $206m  Next figures: 20 January Times recommended: 2 First recommended: $420  Last recommended: $466

Autodesk  ADSK  Buy @ $298.5  MV: $65.5bn  Next figures: 4 March  Times recommended: 3  First recommended: $187.8  Last recommended; $252

Baidu  BIDU  Buy @ $212  MV: $59bn  Next figures: 25 February  Times recommended: 4  First recommended; $259.37  Last recommended; $101

BiliBili  BILI  Buy @ $101cyb  MV: $24.8bn  Next figures: 3 March  Times recommended: 2  First recommended: $62.50  Last recommended: $74

BioTechne  TECH  Buy @ $317  MV: $12.25bn Next figures: 9 February  Times recommended: 3  First recommended: $279.50  Lowest recommended: $252  Last recommended; $273

Bitcoin  Buy @ $34,200  Times recommended: 9  First recommended: $3,540  Last recommended; $18,367

Cadence Design Systems  CDNS  Buy @ $135.5 MV: $37.5bn  Next figures: 27 January  Times recommended: 9  First recommended: $71.55  Last recommended: 118

Chegg CHGG  Buy @ $89.64  MV: $11.5bn  Next figures: 16 February  Times recommended: 3  First recommended: $67.81  Last recommended: $81

CoStar Group  CSGP Buy @ $889  MV: $35bn  Next figures: 23 February Times recommended: 3  First recommended: $725  Last recommended: $860

Crowdstrike  CRWD  Buy @ $205  MV: $46.2bn  Next figures: 19 March Times recommended: 12  First recommended: $92  Lowest recommended; $51  Last recommended: $167

CyberArk Software  CYBR  Buy @ $151.5  MV: $5.85bn  Next figures: 18 February  Times recommended: 3  First recommended: $77.50  Last recommended: $98.96

Delivery Hero  DHER  Buy @ €141.50  MV: €27.2bn  Next figures: 28 April  Times recommended; 1 First recommended: €119

Diageo  DGE  Buy @ 2945p  MV: £69.9bn  Next figures: 4 February  Times recommended: 1  First recommended: 3200p

Disney (Walt)  Buy @ $178.45  MV: $323bn  Next figures: 9 February  Times recommended: 3  First recommended: $140 Lowest recommended: $109.20  Last recommended; $129

Domo DOMO  Buy @ $61 MV: $1.8bn Next figures: 9 March  Times recommended: 3  First recommended: $40  Lowest recommended; $19.34  Last recommended: $44.50

Epam Systems EPAM  Buy @ $345  MV: $19.4bn  Next figures: 18 February  Times recommended: 6 First recommended: $163  Last recommended; $331

Estee Lauder  EL  Buy @ $256  MV: $92.7bn Next figures: 5 February  Times recommended: 6   First recommended: $150  Last recommended: $232

Ether  Buy @ $1127  Times recommended: 4 First recommended: $1100 Lowest recommended; $240  Last recommended; $505

Etsy  ETSY  Buy @ $175  MV: $21.8bn Next figures: 2 March  Times recommended: 9 First recommended: $30  Last recommended: $135

Fair Isaac  FICO Buy @ $505  MV: $14.7bn  Next figures: 4 February  Times recommended: 5  First recommended: $210  Last recommended: $477

Ferrari  RACE  Buy @ $226  MV: $39.8bn  Next figures: 4 February  Times recommended: 3  First recommended: $131.50  Last recommended: $178

Five9  FIVN  Buy @ $172  MV: $11.4bn  Next figures: 23 February  Times recommended: 6  First recommended: $51.45  Last recommended; $132

Fiverr FVRR  Buy @ $210.50  MV: $7.4bn  Next figures: 24 February  Times recommended: 4  First recommended: $65  Last recommended: $190

Futu Holdings  FUTU  Buy @ $57  MV: $3.3bn  Next figures: 24 March  Times recommended: 3  First recommended: $29.40  Last recommended: $48

Globant  GLOB  Buy @ $214  MV: $8.4bn  Next figures: 18 February  Times recommended: 3  First recommended: $155 Last recommended: $188

Halma  HLMA  Buy @ 2521p  MV: £9.6bn Next figures: 15 June  Times recommended: 9  First recommended: 1490p  Last recommended: 2393p

HelloFresh  HFG  Buy @ €67  MV: €11.1bn  Next figures: 3 March  Times recommended: 4  First recommended: €28.14  Last recommended: €47.82

Hubspot  HUBS  Buy @ $381  MV: $17.5bn  Next figures: 16 February  Times recommended: 5  First recommended: $163.80  Last recommended: $235

IDEXX Laboratories   IDXX  Buy @ $497  MV: $42.5bn  Next figures: 29 January  Times recommended: 4  First recommended; $320  Last recommended; $438

Inogen  INGN  Buy @ $44 MV: $974m  Next figures: 2 March  Times recommended: 2  First recommended: $191.50  Last recommended; $203.50

Intuitive Surgical  ISRG  Buy @ $803  MV: $95bn  Next figures: 21 January  Times recommended: 14  First recommended; $329.13  Last recommended; $780

JD Sports  JD.  Buy @ 858p  MV: $7.9bn  Next figures: 13 April  Times recommended: 4  First recommended: 600p  Lowest recommended: 558p  Last recommended; 794p

Keywords Studios  KWS  Buy @ 2872p  MV: £2.1bn Next figures: 16 April  Times recommended: 10  First recommended: 1075p  Last recommended: 2250p

Learning Technologies Group  LTG  Buy @ 173p  MV: £1.33bn  Next figures: 6 April Times recommended: 9 First recommended: 80p  Last recommended: 161p

Lemonade  LMND  Buy @ $118  MV: $6.9bn Next figures: 25 February  Times recommended: 2  First recommended: $80  Last recommended: $90.50

Litecoin Buy @ $163  Times recommended: 2  First recommended: $160  Last recommended; $101

Logitech International LOGI  Buy @ $99.50  MV: $16.8bn Next figures: 3 February 2021  Times recommended: 4  First recommended: $66  Last recommended: $87

LVMH  LVMH  Buy @ €505  MV: $258bn  Next figures: 26 January  Times recommended: 6 First recommended: €249.45  Last recommended: €413

Meituan Dienping 3690  Buy @ HK$310  MV: HK$1712bn (US$221bn)  Next figures: 15 March  Times recommended; 2  First recommended: HK$223  Last recommended: HK$245

MercadoLibre  MELI  Buy @ $1650  MV: $82.2bn  Next figures: 25 February  Times recommended: 12  First recommended: $316.17  Last recommended; $1603

Mettler-Toledo International  MTD  Buy @ $1176  MV: $28bn  Next figures: 11 February  Times recommended; 1  First recommended: $1145

MongoDB  MDB  Buy @ $355 MV: $21.4bn  Next figures: 17 March  Times recommended: 10  First recommended: $74  Last recommended; $262

Monolithic Power Systems  MPWR  Buy @ $370  MV: $16.7bn  Next figures: 11 February  Times recommended: 3  First recommended: $225   Last recommended: $318

Netease  NTES  Buy @ $101.5  MV: $67bn  Next figures: 16 February  Times recommended: 1  First recommended: $86

Palo Alto Networks  PANW  Buy @ $350  MV: $34bn  Next figures: 2 March  Times recommended: 5  First recommended: $205  Last recommended; $304

Peloton Interactive  PTON  Buy @ $148  MV: $43bn  Next figures: 10 February  Times recommended: 6  First recommended: $45.11  Last recommended: $120

Pinduoduo  PDD Buy @ $185  MV: $145bn Next figures: 17 March  Times recommended: 9 First recommended: $49.57  Last recommended: $154.50

RingCentral  RNG  Buy @ $383.50 MV: $34bn  Next figures: 15 February  Times recommended: 6  First recommended: $238.73 Last recommended: $348

SolarEdge Technologies  SEDG  Buy @ $316.50  MV: $16.2bn  Next figures: 24 February  Times recommended: 6  First recommended; $147.75  Last recommended; $264

Synopsys  SNPS  Buy @ $258.50  MV: $39.50bn  Next figures: 24 February  Times recommended: 3  First recommended; $180.50  Last recommended: $238

Taiwan Semiconductor Manufacturing  TSM  Buy @ $112.5  MV: $597bn  Next figures: 14 January  Times recommended: 2  First recommended; $95.50  Last recommended: $105.5

Team17  TM17  Buy @ 830p  MV: £1.07bn  Next figures: 23 March  Times recommended: 6  First recommended: 570p  Last recommended; 780p

Tesla  TSLA  Buy @ $735  MV: $697bn Next figures: 2 February  Times recommended: 13  First recommended: $75.97 Last recommended: $648

Twilio  TWLO  Buy @ $335  MV: $51.5bn  Next figures: 10 February  Times recommended: 11  First recommended: $61.50  Last recommended: $319

Xero XRO Buy @ A$148  MV: A$21.7bn (£12bn) Next figures: 13 May Times recommended: 13  First recommended: A$38.10  Last recommended: A$135

 

The short term is always a mystery in the stock market. There are so many forces at work that have nothing to do with corporate performance, which kicks in over the long-term as a determinant of share price trends. This is why QV for Shares is all about carefully choosing shares for their outstanding long-term growth potential, believing in those choices and holding unless their is strong evidence that the shares are no longer 3G. One strategy, which I favour with QV although it is not the only one, ia to invest equal amounts in a growing portfolio of shares and add to positions over time on fresh buy signals. These will usually be at progressively higher prices but if the whole market falls down a snake (experiences a sell-off of which there have been several since 2009) there can be opportunities to add to holdings, still buying into strength but at lower prices. It is not the only way to invest but it is the way, which most closely replicates how QV operates and, on past form, should deliver impressive results.

The chart of the Nasdaq 100 above presents a picture of a troubled decade for shares in the first decade of the new millennium followed by a much stronger performance in the second decade. This may be connected. Investors became disenchanted with shares in the 2000s and came out of shares but have been rediscovering their enthusiasm ever since. At the same time it has become much easier to invest across borders, which has been drawing money from around the world into the strongly performing technology-driven US stock market. I expect this to continue but other stock markets, including the UK’s, seem to be waking up. The choice of exciting companies in which to invest is likely to become even greater.

Cryptocurrencies are a hard-to-read new category of investment. However in a world flush with liquidity and with interest rates at historically low levels it is easy to see their attraction. My view is that they deserve a small place in a growth-oriented portfolio because of their speculative appeal. Are they going to play a major role in the world economy in future? I have no idea but many clever people think they will.