For more than a century, the stock market has stood well above all other investment vehicles. Although stocks will not generate a positive return every year, the market has delivered the highest long-term average annual return, relative to other assets, such as bonds and gold.
But in the past two years, stocks have come in a distant second to CRYPTOCURRENCY. In just over 11 years, we have seen Bitcoin (CRYPTO: BTC) earn more than 7,700,000,000%. There are also coins based on memes Shiba Inu (CRYPTO: SHIB), which has accumulated earnings greater than 5,000,000% since it debuted less than 15 months ago.
Staggering earnings like these have investors flocking into the crypto space like never before. These investors are counting on continued euphoria and growing real-world adoption to generate life-altering returns.
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Investing in cryptocurrencies carries a lot of risk
However, I am not convinced that the cryptocurrency craze has staying power. With few exceptions, the real world use case for digital currencies is virtually non-existent. For instance, Dogecoin (CRYPTO: DOGE) It has been promoted incessantly on social media for the past year, but only has about 1,700 businesses that accept it as a form of payment, according to the Cryptwerk online business directory. Shiba Inu has even less use in the real world, with only 91 merchants accepting SHIB as a form of payment.
Another major problem with cryptocurrencies is that investors always overestimate the adoption and utility of new technologies. Whether it's genomics, business-to-business commerce, 3D printing, or some other groundbreaking advance, bubbles are commonplace. While blockchain technology has the potential to become mainstream at some point in the future, we are a long way from moving away from the existing financial payments infrastructure.
Perhaps the most damning aspect of cryptocurrency is the lack of a barrier to entry. CoinMarketCap.com lists nearly 13,000 cryptocurrencies, as of last weekend. Every month, new projects are released, all of which threaten to become more popular, useful or efficient than existing cryptocurrencies. For example, several popular cryptocurrencies offer a cheaper and significantly faster means of completing a payment than Bitcoin.
A trio of growth stocks to buy before any cryptocurrency
Instead of putting my money to work in cryptocurrencies, which could be next in a long list of asset bubbles, I would buy the following trio of high growth stocks in an instant.
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PubMatic
First is the cloud-based ad tech company PubMatic (NASDAQ: PUBM), whose objective is to benefit from a change in the way advertisers reach users.
Since the dawn of the Internet, advertising has become increasingly programmatic. In other words, humans are increasingly being removed from the equation, with machine-based algorithms handling ad buying, selling, and optimization.
PubMatic is a sales platform whose clients are publishers. Effectively sell display space from publishers to advertisers. However, it doesn't just auction this space to the highest bidder. The company's cloud-based platform aims to optimize the user experience, which means showing them relevant ads. This keeps advertisers happy and generally gives publishers better pricing power.
What PubMatic does such an obvious investment is the ongoing shift towards digital advertising. According to PubMatic, industry-wide digital advertising spending should grow approximately 10% annually through 2025. However, PubMatic has easily doubled the industry average growth rate. This is because most of its revenue comes from connected TV / over-the-top programmatic ad spend.
Considering that existing PubMatic customers spent 50% more with the company in the quarter ending in June than in the comparable quarter of 2020, I'd say it's at the center of a foolproof growth trend.
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Trulieve Cannabis
Another high-growth stock that you would buy in the blink of an eye long before any cryptocurrency is a marijuana company. Trulieve Cannabis (OTC: TCNNF).
Trulieve is a US Multi-State Operator (MSO) Although Canadian marijuana stocks were once the hot buy, it is US marijuana stocks that offer the best long-term prospects. Cannabis testing company BDSA forecasts a compound annual growth rate of 14% for the US marijuana industry through 2026, which will ultimately generate sales worth $ 47.6 billion.
What will make people raise an eyebrow on Trulieve? it's your concentration. Although it has expanded to new states, Trulieve recently opened its 100th dispensary in Florida. By concentrating so many retail stores in Florida, where medical marijuana is legal, Trulieve has been able to keep its marketing costs low. As a result, it has been profitable on a recurring basis for over three years. It also gobbled up roughly half of the Sunshine State's oil and dry cannabis market share.
Trulieve also plans to grow inorganically. Earlier this month, it closed a stock acquisition of MSO Harvest Health & Recreation. Harvest Health had a five-state focus, with its home state of Arizona being the most lucrative. Inheriting Harvest's 15 dispensaries in Grand Canyon state could allow it to control another billion-dollar cannabis market.
There is just no pure game marijuana stock generating greener than Trulieve Cannabis.
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Sales force
A third and final growth stock that you would rack up long before you buy any cryptocurrency is the cloud-based customer relationship management (CRM) software provider. Salesforce.com (NYSE: CRM).
Consumer-oriented companies use CRM software to improve existing customer relationships and increase sales. In addition to accessing customer information in real time, it can be used to manage online marketing campaigns, handle service issues, and run predictive analytics to determine which customers might buy a new product or service. CRM software sales are expected to grow by a double-digit percentage until at least the middle of the decade, if not more.
What makes Salesforce so special is its absolute mastery of the CRM space. According to IDC data, Salesforce contributed 19.5% of global CRM spend in 2020. For some context, this was more than the numbers 2-5 in market share on a combined basis. Salesforce's seat at the head of the table for this hot trend will be unrivaled anytime soon.
Salesforce also has an insatiable appetite for acquisitions. CEO Marc Benioff is always looking to build his business ecosystem and expand his potential user base to small and medium-sized businesses. This has been done in recent years with the acquisitions of MuleSoft, Tableau, and most recently Slack Technologies.
Including organic and purchasing growth, Salesforce can double its revenue approximately every four years. That's incredibly strong growth for a proven mega-cap winner.
This article represents the opinion of the author, who may disagree with the "official" recommendation position for a premium Motley Fool consulting service. We are variegated! Questioning an investment thesis, even one of our own, helps all of us think critically about investing and make decisions that help us be smarter, happier, and wealthier.
