Market timing is not really investing. No one knows where the market is going tomorrow, or what a particular stock will do next week. Surprises happen all the time, driving stock prices up or down without any prior warning. Betting on short-term price movements is exactly that – a form of gambling. Real investment success comes from buying stocks of fantastic companies with great management teams, owning those stocks for a long time and the ability for compound returns to work their magic.
That said, it certainly doesn’t hurt when these amazing stocks are available at bargain prices. That’s what I see in Fiver International (FVRR -5.48%) and Silvergate Capital (AND -4.21%) at present. And that may not be the absolute bottom of the market for either of these spring stocks, but they are very cheap and you can always buy more if stock prices continue to fall.
Fiverr: disrupting the world of work
The world of work is changing before our eyes. For better or worse, the old tradition of establishing a career with a 9 to 5 work schedule, retirement plans and a gold watch in retirement is fading. The so-called gig economy is chipping away at the edges of this plan, threatening to replace it entirely in some industries.
Fiverr International isn’t just leading the charge. This company has written entire chapters of the gig economy playbook and continues to innovate. Always popular with customers in the small and medium business category, Fiverr recently entered the business space with the launch of Fiverr Business. This freelance services marketplace helps buyers identify needs that can be met by a qualified freelancer and provides onboarding templates for new freelance relationships. The platform is only two years old but already accounts for more than 5% of Fiverr’s total gross merchandise value (GMV).
“We believe the opportunity in the online freelancing market is large and in its infancy,” Fiverr CEO Micha Kaufman said on a recent earnings call. In other words, Fiverr should be able to grow rapidly for many years before hitting significant market saturation.
Many market makers seem to have missed this note. Fiverr’s recent growth spurt is widely seen as a direct result of early coronavirus lockdowns. The stock is down 89% from mid-February 2021, when COVID-19 vaccines became widely available. At the same time, Fiverr’s sales growth continued to soar, indicating healthy business. There’s a stark disconnect between the company’s high-octane growth and the stock’s dramatic fall:
This is what wealth building investments are made of. Fiverr shares are poised for a powerful long-term rally. The road to unlocking this rebound may be bumpy and Fiverr’s shares could fall even further, but you shouldn’t let that stop you from investing at these inviting prices.
Silvergate: The bank that powers the crypto market
Cryptocurrencies and crypto-trading services are not isolated. They must connect to the traditional banking world in order to allow individuals and businesses to exchange real currencies for digital coins. Silvergate Capital was one of the first providers of financial services for crypto-based projects and remains one of the leading lenders in the space today. Additionally, the company has developed its own technology platform to manage transactions involving cryptocurrencies and fiat currencies. This Silvergate Exchange Network (SEN) is still active, providing trading services around the clock and around the world.
This combination of crucial crypto-trading infrastructure and legacy capital makes Silvergate a unique entry point into the cryptocurrency market. By investing in Silvergate, you can benefit from sustained growth in this sector without picking specific winners from the thousands of blockchain currencies available today. Silvergate and SEN support a plethora of crypto projects.
For example, this is where MicroStrategy (MSTR -4.89%) turned when he wanted to sign a loan secured by the existing assets of the business analysis firm Bitcoin (BTC 0.59%) assets. And just about every crypto exchange you’ve heard of runs on the SEN platform, including Coinbase (PIECE OF MONEY -4.18%)Kraken, Bitstamp and Crypto.com.
Silvergate therefore allows you to tap into the crypto market without directly owning digital assets and with the benefit of running a growing and profitable business. In the second quarter of 2022, the bank’s earnings grew 41% year-over-year, alongside an 18% increase in assets under management. The SEN system processed $191 billion in cryptocurrency transfers during the quarter. And the company achieved these high-quality results in a period when Bitcoin prices fell 57% and Ethereum (ETH 1.03%) ticked 68% less. Now imagine what Silvergate can do in a cryptocurrency bull market.
And of course, the stock is on sale right now. Mr. Market brushed aside Silvergate’s strong trading results to focus on the idea that anything in cryptocurrency should be risky. Share prices are down 43% in 2022 and Silvergate is trading at the modest valuation of 10.7 times forward earnings. This is a great stock to buy today, and maybe buy more if there are more price drops on pressure.
Anders Bylund holds positions at Bitcoin, Coinbase Global, Inc., Ethereum, Fiverr International, and Silvergate Capital Corporation. The Motley Fool holds and recommends Bitcoin, Coinbase Global, Inc., Ethereum, and Fiverr International. The Motley Fool recommends Silvergate Capital Corporation. The Motley Fool has a disclosure policy.
#Dont #wait #stock #market #crash #main #stocks #sale #Motley #Fool