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‘We’re always one watershed moment away from a bubble:’ Marketgauge.com partner

Yahoo Finance’s Kristin Myers and Michele Schneider, Marketgauge.com Partner, discuss Bumble’s public listing and company valuation.

Video Transcript

KRISTIN MYERS: So I want to keep this market conversation going with Michelle Schneider, Marketgauge.com partner and director of trading research and education. I'm so excited to chat with you, Michele. It has been such a long time.

A lot to get to today. I do want to start on Bumble's IPO. It is actually having a nice pop here, up almost 70% from that original price offering of $43 a share. Now, I saw a lot of folks saying that they were overvalued. Their CEO, of course, saying that, quote, love, is profitable. I'm wondering what your thoughts are.

MICHELE SCHNEIDER: Well, we do have Valentine's Day coming up. I'm not surprised to see the outperformance here based on what the valuation was coming into the first day. It's a really great idea. And obviously, it's been a trend with Tinder, I think, is the one that started a woman-driven dating app. So it's really part of the whole generation of women coming to play. So I think that's great.

In terms of the actual stock, I look at it like all IPOs, really, is that you might see a really great first day. But I like to look at some historical information. So I can't really make much of a judgment. We have a range for today. As you mentioned, it's about-- I think 73 or so was the low. And it went up over 76, or maybe 79 was the high. So now that gives us a range to look at for tomorrow.

And then we can have a further idea of what to do with that. But the IPOs and the SPACs have been all the rage for this whole year so far. So it's right in line with that with a pretty good premise fundamentally.

KRISTIN MYERS: And even beyond that, I feel like there's been a huge speculative frenzy in the markets lately. We heard Jared just talking about Bitcoin. And we also heard him talking about GameStop. I mentioned at the top of this show the cannabis stocks.

I'm wondering, as we saw, especially throughout 2020, a lot of these companies running up well past their valuations. I'm wondering if you think that's going to continue in 2021. What are you anticipating? Because a lot of folks are talking about this bubble that they see forming right now this year.

MICHELE SCHNEIDER: People love to use the word bubble. And there's always bubbles all around us, I mean really. We're always like one watershed event away from a potential bubble because last year was the pandemic. This year, what is it? So that's really what I'm thinking about.

Fundamentally, what would create a bubble? Could it be no more stimulus. Well, possible, but that doesn't really seem to be happening right now. Are we talking general market or Bitcoin? Because there are two different types of bubbles here.

But in terms of the general market, we are looking like we're coming back from the pandemic. Businesses are opening. I know here in my own town, we finally went from red to yellow. So we're allowed to go indoor dining this weekend. We have vaccine rollouts coming out. The oil market is certainly showing some hope for more recovery and people going out again. So I don't see the bubble unless there's something coming from what we don't know about at this point.

And then in terms of Bitcoin, same thing. I don't see where there's a bubble, when each day, like Jared pointed out, you have more institutional interest. Like today, for example, on top of the Mastercard, we have BNY Mellon, which is trying to create a secure infrastructure using a digital asset unit based on cryptocurrency. So this is legitimizing the whole space, as far as I'm concerned.

KRISTIN MYERS: I'm wondering how you think market performance is going to be this year and if there's any sectors that are of particular interest to you in 2021.

MICHELE SCHNEIDER: Well, you and Jared talked about cannabis. And I'm definitely all about the cannabis stocks. We've been long for much lower levels. And I'm not surprised to see the GME curse with the hearings that Jared talked about coming up. Yeah, I mean that's what happened to Tilray, right? It got way over-bloated based on the speculation of the retail investors. And now they're all liquidating ahead of the hearings that are going on.

[COUGHS] Excuse me.

But overall, I still think that we are going to have a much more friendly environment, legislatively, from the federal government in cannabis. Look at Tilray. You've got France, Portugal, and now the UK looking into medical marijuana. So we're branching out globally. So that's one sector I like.

I still like the whole idea of EVs. They may have gotten rich. But I'm also really more interested now in the electricity distribution part of the EVs because Tesla, Musk had said that the electricity demand is going to double. And I think he's absolutely right.

So we're looking at some of the lithium battery companies as well. One that's been totally beat up and undervalued because of legal issues has been QS, Quantum Scape, so that's one we have a little skin in the game. And then generally, I'm looking at manufacturing, industrial, and hopefully the recreational side of life to come back as potential opportunities, some of the other stuff we're already in. And there's one more.

KRISTIN MYERS: Now, Michele-- oh, what's the other one?

MICHELE SCHNEIDER: Yeah. This to me is the hottest thing to be looking at right now, and that's agricultural tech, ag tech. That's really where I have our eyes right now. So we're already in App Harvest. And I know he was a guest, actually, on your show last week, the guy who's the CEO. I think that's really future-thinking. And then also Origin, which is a Chinese company, the symbol is SEED. I don't have skin in that game yet. But we have put our clients in App Harvest, and it's gone up. So I think that you got to look at the future in terms of what's the new technologies that are going to help people live better and cheaper because everything has gone skyrocketing, obviously, through the pandemic.

KRISTIN MYERS: All right, absolutely. Some great insights from Michele Schneider, as always, Marketgauge.com partner and director of trading research and education. I'm going to have to try to hop in here and do the 2:00 PM more often so that you and I can chat. Thanks so much for joining us.