The stock market could be ready to crash in 2021. The writing has been on the wall for some time. Perhaps no expert has sounded the alarms more loudly than Jeremey Grantham, co-founder of $60 billion asset manager GMO.
The market crash is coming
When Grantham first warned investors in early 2020, he garnered plenty of listeners. But after stocks hit all-time highs last year, some fans grew impatient. Grantham reiterated this month that he is unperturbed.
“I am doubling down, because as prices move further away from trend, at accelerating speed and with growing speculative fervor, of course my confidence as a market historian increases that this is indeed the late stage of a bubble. A bubble that is beginning to look like a real humdinger,” he concluded.
“In the last few months the hostile tone has been rapidly ratcheting up,” he reflected. “The irony for bears though is that it’s exactly what we want to hear.”
Here’s the thing: you can make a fortune during the next stock market crash. You just need to play the game right.
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This opportunity is too big to ignore
A rising tide lifts all boats, and there are few tides bigger than cybersecurity. This is where you want to be during a market crash.
Every day, thousands of new endpoints go online, everything from smartphones and smart watches to servers and satellites. Anything connected to the internet is vulnerable to attack.
You might remember the company as a phone manufacturer, but those days are long gone. The company’s Cylance division, for example, uses state of the art artificial intelligence to detect threats before they arrive.
There’s almost nothing that can stop cybersecurity spending from rising next year, even a deep market crash. BlackBerry stock will be there to reap the gains.
This stock can grow during the crash
When the coronavirus arrived in March, retail spending fell off a cliff. Consumer spending still hasn’t fully recovered in many areas, but one segment of the market is roaring: e-commerce.
This dynamic proves that a crash one place can create a boom in another. Shoppers stopped going to physical storefronts, but they flooded digital retailers. As one of the largest e-commerce platforms on the planet, Shopify (TSX:SHOP)(NYSE:SHOP) soared last year, more than doubling in price.
Shopify specializes in powering the back-end infrastructure of small businesses. When those shops went digital, Shopify directly benefited.
“If Amazon is the digital Walmart, Shopify is the independent store down the block,” I recently explained. “But instead of owning the store, Shopify gets a cut of sales across the one million stores it enables.”
BlackBerry stock currently trades at an 80% discount to its peer group. Shopify stock, meanwhile, has already proven capable of generating 1,000% gains.
A market crash may be on the way, but with stocks like these, your portfolio will thrive.
Our best crash-proof stock picks are right below.
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This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.
John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. David Gardner owns shares of Amazon. Tom Gardner owns shares of Shopify. The Motley Fool owns shares of and recommends Amazon, Shopify, and Shopify. The Motley Fool recommends BlackBerry and BlackBerry and recommends the following options: long January 2022 $1920 calls on Amazon and short January 2022 $1940 calls on Amazon. Ryan Vanzo has no position in any stocks mentioned.