Before I start, I have mentioned a couple of times that The Fed will cut in February, not realizing that The Fed does not have a February meeting, but rather a January meeting on the 30th. I believe there is a chance The Fed will cut at the January meeting, but I believe it is more likely that they cut at their meeting in March.

Okay, I have yapped for a while about The Fed cutting rates this coming year and the many positive effects that action will have, but it all mainly comes down to this simple principle: money will be flying around. By the end of the year, money will be so much cheaper than it is now as The Fed attempts to energize the economy. Now, I should probably explain the effects that will have on certain stocks and where you should look to put your money in the coming year.

First, the “Magnificent Seven” are overvalued. This was their year but 2024 may be less exciting for them. Every one of those companies except for Tesla is a buy-and-hold for life, but I would not look to them for growth this year. I am not telling you to sell, as a company like Microsoft is something you should hold for the rest of your life, but they are not going to go up 60% again next year. Their growth will be limited for a variety of factors, but mainly because they have run their course a bit, and reached their ceiling. Not to say there is no chance these stocks have a year similar to this past year, just that the probabilities say that it is unlikely. So, you must look to other places for immediate growth if that is your target. Here is my favorite stock for the coming year.

Block (SQ) is a stock that is the favorite of many idiots. The most fintech stock of all fintech stocks, I believe Block may be undervalued. Block had a rough start to the year after Hindenburg Research dropped a report detailing how Cash App was overstating user counts and how Cash App was basically a black market for scams and fraud. Because of this, Block missed out on most of the craze this year for tech stocks. One would assume that this tech stock would be up 30%-50%, but no Block was down 40% until that rally began in early November. After all of this, Block is only up 15% YTD. Now, I do not like timing the market, generally, it is a bad habit, but Block is undeniably cheap. From BAC “Block’s stock price drop doesn’t account for its potential for growth.”

Where is Block going to grow? Block is going to run payments everywhere online and in-person. Through Square, Block has dominated payments. You know that white chip reader that every store seems to have? That is Square. Do you know that app that every person under the age of 30 is using to pay each other/invest in stocks and crypto/open debit cards/get paid by employers? That is Cash App. Those two companies would be excellent on their own, but once you combine them, you have a great “synergy” as they like to say. Square saw profits jump by 15% and Cash App saw profits jump by 27% in the most recent quarter, pointing Block on the direction towards profitability.

Block has captured the dollars of the youth which is super important as they begin to capture more buying power in the market. Now, there is a slight problem with all of this, by investing in Block you are investing also in Bitcoin and crypto in general. Jack Dorsey who used to run Twitter and now runs Block loves crypto. In fact, there are two division within Block that are solely crypto-focused. In 2018, Cash App became an early adopter and allowed their users to buy and sell crypto for a small commission. When crypto goes up, Block is also going to go up because investors love good news. When crypto goes down it is harder for Block to go up, investors rationalize the news, but it is still difficult to maintain positive momentum.

I have put a small portion of my account into Block; I believe Block is a buy. I think their leadership team is much more solid than they were before as they went through some growing pains, but I believe they are on the road to profitability. (Here is a good article I found on Block, https://investorplace.com/2023/10/block-breakdown-is-sq-stock-the-ultimate-fintech-play/.)

Okay, so that should wrap that up. Over the coming articles, I will be putting out more recommendations and they should all be about 700-1000 words, thanks for reading, and Merry Christmas/Hanukkah/Kwanzaa/whatever you celebrate.