Last Article of An Extraordinary Year in 2020
For the last article of this extraordinary 2020, I like to discuss about a future new trend that will be very interesting in the US Stock Market, as well as the fact that I have been disposing OCBC for another STI component which I target for 2021.
Let’s look at the new trend first…
The New Trend for the US Market
It is what I called the igaming/sports betting trend. Basically I believe that companies involved directly or indirectly in the sports betting scene will grow significantly in 2021.
The reasons are as follows:
1. New Jersey Supreme Court Ruling
If we look prior 2018, Sports betting was illegal. As per article, it was “after New Jersey's Supreme Court victory in May 2018, any state that wishes can legalize sports betting”. Thus, since then, many states have proceeded to legalise sports betting.
Covid-19 pandemic accelerated the process of state government pushing ahead to legalise sports betting. The reasons were simple – for taxes. As per article, with the Covid-19 pandemic, US State and local government are losing out on the tax revenue from casino and the fastest way to “cover” this gap is to legalize sports betting.
3. More Funds Required
US State and local government require much more funds to stay afloat and also assist their economy to get back to “normal” – as well as assisting those in need.
4. US Casino Also Need To Digitalize To Survive
In the past, Casino is always looking to attract tourist to visit them and to spent time & money at their casino. As the Covid-19 pandemic came along, Casino has been trying to stay afloat with the lockdown and the lack of tourist. Therefore, the fastest way is to digitalised the “casino business”. This may accelerate the igaming scene as online gambling/betting becomes the new norm.
Other articles where information are taken from:
Thus, with the reasons above, I believe this igaming/sports betting trend will be the trend to watch in 2021. As of now, only about 28 states (out of 50 states) have legalize sports betting and only 12 of them allow mobile betting. Therefore, the potential growth is still significant. Oh...and we have yet to touch on countries outside the US.
Now to the 2nd topic...
Now on the company that I am replacing OCBC. Do note that I am still in the mist of reducing/selling my position. At this point in time, I do not know if my position will be reduced to zero or will I just be staying with a smaller position.
I like to clarify that OCBC was chosen because it is a large position and I wanted to invest more into the US market. It is definitely not that it is a bad company for the long term. Rather, out of all my SG long term holdings* (2 Retail REITs, 1 Supermarket and 1 Staple Food companies), I think OCBC represent the biggest uncertainty** in the next 2 years among the list of SG companies in my portfolio.
*I do still have 2 other SG positions but these are shorter term bets. So when my theory plays out, they will be sold.
**I Will Be Having A FB Live with JR_Chai to discuss on the uncertainty at night on 4 Jan 2021. More information will be provided in due time!
Oh and the new company is..... (The article will be out tomorrow!)
My guess is GAN or ELYSReplyDelete
They are definitely in the watchlist.