As Democrats Regain Control of the Senate, Stocks Achieve Record Highs

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The results of the runoff elections in Georgia for the final two seats of the US Senate are in: Two Democrats, Raphael Warnock (defeating Republican Kelly Loeffler) and Jon Ossoff (defeating Republican David Perdue), will now occupy them. 

In case you’re wondering why any of this is important: The Democratic party now has majority control of the Senate, and future Vice President Kamala Harris (also a Democrat) will be able to resolve any tiebreakers as the president of the chamber. 

We now have Democrat Joe Biden poised to become the 46th President of the United States on January 20th, a “blue” Senate, and a near-blue “House.” It’s going to be a bright blue wave for the next four years, and the stock market reacted to this news in the form of record highs.

Here are the most important numbers you need to know about yesterday’s trading session: 

  • Dow Jones: +1.4% (record high)
  • S&P 500: +0.6% (intraday record)
  • NASDAQ: -0.6% 

CNBC reports on several more implications of the new of the Georgia election with respect to government spending: 

“This outcome could facilitate the passing of new coronavirus relief, raising hope for the country’s economic recovery, some investors speculated.

…Goldman Sachs expects another big stimulus package to the tune of $600 billion in the near term if Democrats prevail and take the Senate.

Certain stocks gained on expectations for additional government aid. The small-cap benchmark Russell 2000 jumped nearly 4%. Industrial giant Caterpillar surged 5.5%.

JPMorgan Chase and Bank of America shares rose 4.7% and 6.3%, respectively, amid the 10-year yield topping the 1% milestone as higher rates should help their bottom lines.”

Now, I want to go off on a tangent and give you some friendly advice for the next four years of your investment career…

A lot of you may be disappointed by the results of the 2020 Presidential Election and consequently the results of the Georgia runoff election. You may feel as if the worst days are ahead of us, thanks to the elections likely being fraudulent and the stated intentions to undo all of the 4 years of hard work laid down by President Trump. 

But no matter what happens, my best piece of wisdom I can bestow upon you is to ride the momentum of the blue wave. Don’t fight it and don’t try to quash it, as you’ll only end up being wiped out and left to drown in the big blue sea.

However… if you choose to accept where the wave is going and what it plans to do, you can stand to make a fortune over the next four years. And unlike President Trump’s four-year term, the Biden administration’s agenda is much more crystal clear in its intentions. 

You may not like the intentions and have your own reservations about them, but at least you know exactly where they want to go. 

What do YOU think about the results of the Georgia Senate election? Will it have disastrous implications for our economy over the next four years, or will things more or less stay the same? Reply to this newsletter and share your predictions with us!

Will a Democrat-Run Future Be Positive for Weed Stocks? 

Here’s something I didn’t expect to see: Apparently, pot stocks grew like bamboo trees after the news about the Senate elections happening in Georgia. 

From Reuters

Cannabis stocks surged on Wednesday as Democrats won a key US Senate race in Georgia and led in another, moving closer to a stunning sweep that would give them control of Congress and power to act on their promise to legalize pot [on a federal level].

US-listed shares of Aphria Inc, Hexo Corp and Cronos Group rose between 10.4% and 13%.

Pot stocks have rallied since Joe Biden’s victory in the US presidential elections in November and higher demand for pot during the coronavirus-led lockdowns.

Vice President-elect Kamala Harris has promised pot decriminalization, which would remove it from the classified substances list. But with Republicans gaining control of the Senate in November elections, the passage of acts to decriminalize it, had looked bleak.”

I don’t know if these intentions will necessarily play out. However, I will mention it has worked beautifully for the country of Canada. Ever since they legalized the recreational use of cannabis back in October 2018, business has been booming and the black market has been slowly fading away into non-existence. 

Why can’t the American government pull their heads out of their a**es and realize what other countries have figured out several years ago!?

Another +$2,000 Leap for Bitcoin, and a NEW All-Time High

I didn’t think much about Bitcoin until I sat down and reviewed how the market performed yesterday. But then I got an alert from Yahoo! Finance and it read as follows:

Bitcoin jumped to another all-time high on Wednesday as extreme swings continued to buffet the world’s largest cryptocurrency.

The famously volatile digital coin advanced as much as 8% to $36,499, surpassing the previous high set Jan. 3, and was trading at $36,190 as of 4:37 p.m. in New York. It had plunged as much as 17% on Monday. Bitcoin quadrupled in 2020.”

The Motley Fool also wrote on this news, noting that Bitcoin miners are big-time beneficiaries of this latest move:

“As bitcoin rises, bitcoin mining stocks are staying hot in general. CleanSpark’s peers Riot Blockchain and Marathon Patent Group are also on the rise today. As of 1:30 p.m. EST, Riot Blockchain stock was up 7% and Marathon stock was up 25%.” 

I have a weird feeling that even with the COVID-19 vaccine rollouts, Bitcoin’s value will continue to go up. Even a 2x-increase by the end of 2021 doesn’t seem too unreasonable. Because after this pandemic, people are going to be paranoid about the next one coming 5-10 years down the line. 

And IF we ever come across another COVID-19 in our lifetimes, we’re going to be goddamn ready for it. 

Hedge Funds: The Newest “Collector’s Item” of Super-Wealthy Families

I haven’t heard the term “hedge fund” in a hot minute, most likely because several of them had some VERY dismal quarterly and annual returns in 2020. In some cases, clueless teenagers using Robinhood on their mobile phones managed to seek out better performance with their portfolios!

But for those hedge funds who went against the status quo of the institutions and bet big during the stock market rally of the last ten months, they’re being rewarded with capital from ultra-wealthy families. From Bloomberg:

“More than a third of 185 investment firms for wealthy clans plan to boost allocations amid the economic upheaval caused by the COVID-19 pandemic, according to a survey released Wednesday by BlackRock Inc. and Juniper Place, a London-based firm that helps asset managers raise capital.

Family offices and other investors soured on hedge funds in recent years, bemoaning high fees and lackluster returns. But the health crisis has given some of those managers a boost, particularly stock-pickers who benefited from aggressive bets on technology stocks and copious economic stimulus that drove equities to new heights.

More than three-quarters of family offices said they preferred long-short equity hedge funds, according to research BlackRock conducted in July and August. Such funds were the best performing broad strategy last year, gaining about 4% through November on an asset-weighted basis, according to data from Hedge Fund Research Inc.

Must be nice to live that kind of life – not only do you need to FIND hedge funds like this, but you also need a certain amount of capital before you can even consider ringing them up….

Brand New Upgrades in 2021 for American Express Credit Cards!

Credit card company American Express is starting 2021 off strong with several deals and perks for anybody who uses their Membership Rewards points system, particularly with their Platinum Cards and Blue Business Cards. 

Here are some of the most important offers being made: 

  • Up to $180 in statement credits on purchases made at eligible merchants via PayPal until June 30th
  • Up to $1,700 in statement credits for Amex Offers (i.e. select merchants) through June 30th
  • Up to 400,000 additional Membership Rewards points across select back-to-business categories (wireless, gas, shipping, advertising, office supplies)
  • Up to $250 back on select business purchases
  • One-time complimentary night ($150 or more) if you book a stay at an eligible hotel
  • Lower fares on flights, seats, and routes with select airlines (up to 20% savings from the publicly listed ticket price)
  • 2x Membership Rewards points on car rental bookings made through Amex Travel

Obviously, there are going to be several exceptions to these rules and more details you have to know about. Moreover, some of these benefits may not be available with select cards from American Express. 

But I’m curious to know: What new credit cards have YOU signed up with for 2021, and what benefits do they offer you? Reply to this newsletter and share your secret credit card deals with us!

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