week. be sure to follow me on twitter, facebook and instagram, and i'll be back next week with more in-depth interviews right here on "the wall street journal at large." are. thank you for joining us. ♪ ♪ ♪ jack: welcome to bauer ron's roundtable where we get behind the had hadlines and prepare you for the week ahead. i'm jack otter. coming up, why the company is betting on a rise in older users, and barron's annual top stock picks for the coming year, why you should add them to your portfolio. we begin with what we think are the three most important things investors should be thinking about right now. tech stocks had a big week as the nasdaq rallied, but small company stocks are the ones to watch. bitcoin topped $20,000 for the first time.

what comes next? a bigger rally or deep losses, what you need to know. and popular trading platform robin hood financial is facing new regulatory charges of enticing inexperienced investors to be engage in frequent trading. we'll look at the game my caution of trading apps. on the barron's round table, ben levisohn, carlton english and jack howe. ben, the market pulled back a little bit on friday after hitting yet another record. what are you looking at? >> yeah, it was a fantastic week for stocks. small caps gained more than 3%, the nasdaq did too. the dow was up a little bit less, but it was really just an all-around pretty decent week. what struck me was this was a week where we had a fed meeting, expect fed was really kind of irrelevant. basically reiterated that it's going to keep rates low for a very long time and keep doing what it's been doing. and you can hear noise around these meetings, people are going to come out with opinions saying that it means this or that, but

really the fed is just going to keep doing what it's been doing. and i think it's almost safe to say we could ignore it at least until the market forces it to actually do something. jack: interesting to see small caps finally make a move. does that rally have legs? >> it probably does. i think, you know, it depends if you're long or short term. when you look at the short term, it's had quite a move. it's come very far, very fast. i wouldn't be surprised to see it take a bit of a pause. but i think in the longer term that it actually does have legs. usually when you see small caps make a move like this, it can often be followed by continued strength especially if we see the kind of rotation out of growth stocks that people have been talking about. small caps should be a beneficiary of that. jack: one more question for you. ever day we seem to hear more news about this russian hack, and every day it's worse. is the market focused on this yet in. >> i think the market isn't quite focused on it yet, but it's starting to impact

individual stocks. for instance, you have cybersecurity companies, cloudstrike and cyber arc are certainly started to benefit from this. i think it has the potential to be a much bigger issue. when you just think about our technology infrastructure, how vulnerable it seems to be. jack: yeah, it certainly does. so, jack, let's talk about all the excitement over bitcoin crossing $20,000. i think the it hit $23,000 at one point. what do you make of that is? >> $23,000, and it started the year at $7,000. if i'm doing right on this, jack, that's better than a triple this year on bitcoin. if you're wondering why it's rising so quickly, i think you can say it's speculative access. some people say it's fears over monetary debasement. some people say it's just promising savings technology. i know plenty of sensible people who own some bitcoin. i think it might be a game of financial musical chairs. you can puck your own narrative.

-- puck your own narrative. if you want to buy some, you can buy using paypal or cash app or robin hood. there's no etf yet. there's a story in this week's barron's where we talk about some publicly-traded options, something called grey scale bitcoin trust. if you want to know what's next for bitcoin, where it's headed next, i can maybe narrow it down for you a little. i know you know scott minor,-on the program earlier this year -- he was on the program earlier this year. he just came out with a forecast he thinks it's headed to 400,000 based on its scarcity relative to gold. and we have a contributor at barron's that says if you do this analysis where you compare the trading volume with the number of bitdowns that have been mined, he thinks it's worth $12,000. so you're either going to make 20 time your money from here or lose half your money. i hope that's helpful, jack. jack: that's super helpful. you really narrowed it down,

jack. speaking of speculative excess, carlton, let's talk about robin hood, hit with a fine this week, i believe it was for paying for order flow. can you explain what that's all about? >> yeah. so robin hood is a free trading platform, came under fire from the ftc. basically, it didn't properly discuss close how it makes money. retail investors, they know they don't have to pay piece on their trades, but the way robin hood makes money for selling those trades to market makers. and now this is a very common practice, but the issue was that robin hood didn't properly disclose that, and what the ftc found was that some of the prices on those trades weren't advantageous to retail investors. they found that, basically, retail investors lost about $34 million over a three-year period, so they were fined about $65 million for that the, and they did not have to admit or deny wrongdoing. jack: we should explain that's not a huge hit for each individual investor, it's a fairly small amount.

but what might be more troubling is something barron's called out back in august and recently regulators have been talking about, and that's the so-called gamefi case of trading. sometimes the potential gains are highlighted more than the potential losses. that's something to worry about, right? >> yeah. and robin hood also came under fire for that from the state of massachusetts. they found that robin hood is inducing people to trade more than they probably should. the confetti, the squat-like machine graphics, the push notify cautions people get on their phones about hot trades and stuff. and when you think about how people should be investing, you should be a long-term investor, you shouldn't be treating trades as a game, it may not be the best idea for retail investors, so they're coming under fire on that part of it too. of. jack: yeah, i was saying maybe every time somebody crypts a diverse fewed portfolio, you should get con if thety there.

jack called me a nerd for that. [laughter] earlier this year paypal embraced bitcoin. why cfo john runny says you should too. that is next. one of the worst things about a cold sore is how it can make you feel. but, when used at the first sign, abreva can get you back to being you in just 2 and a half days. be kinder to yourself and tougher on your cold sores.

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♪ jack: online shopping surged during the pandemic and so has online payment company paypal. will the company stay strong when the covid crisis is over? cfo john rainey joins me now. thanks for coming on the show. >> it's good to be on, jack, thank you. jack: i'm wondering if you can update us on the holiday shopping season. we got a weak retail number, but your numbers are way up more up-to-date. >> sure. well, we've been seeing the trend for a couple years now where in-store or offline shopping has been moving online.

in fact, in the last couple years, online shopping has been greater than in-store, and that trend is even more pronounced this year. i think in part because of the lack of mobility and then the lockdown that people are facing around the country. within the various categories or verticals, there are a few that stand out. certainly, no surprise that food and online groce trues remains -- groceries remains the single largest growth year-over-year, still growing over 100%. more in the holiday shopping numbers, two of the standouts are fashion and sports equipment as well as home and garden. jack: explain to me here, we know that paypal is really helpful for small retailers. they can use your service and that's easy. what's the value proposition for me? paypal is great, but i can also just tap my credit card, my

laptop autofills it. why is it good for consumers. >>? >> so as a form of payment, paw pal actually enjoyed the highest conversion rates in the industry meaning that when an item is placed into a shopping basket, how often that converts into a sale for the consumer and the merchant. and not everyone wants to shop, wants to share their credit card with merchants that maybe they don't know. but that really, i think, understates the value proposition for paypal. we're a digital wallet. we provide alternative payment methods, buy now, papau later, installment payments to our customers, give them the ability to buy and sell cryptoto currency and even use that to shop at our network of 30 million merchants around the world. and then even more not only do they have the ability to earn loyalty points through their credit cards by using paypal,

but we give them a vehicle to redeem those. they can effectively redeem those points just like a credit or debit card at, again, new of our 30 million merchants around the world. jack: what did surprise me was that the fastest growing group is people over 50 with both paw pal and venmo. -- paypal and venmo what's up with that this. >> yeah, it has been a sort of interesting trend that's happened during this period of time. another data point, jack, said that 14% of u.s. consumers are shopped online for the first time since the pandemic. and it really, i think, points to some interesting trends that are taking place in the industry where i think with some of the younger my eleven y'all demographics -- millennial demographics, they're more acclimated to digital payments, but still a lot of people are not there. certainly this demographic that we refer to as silver tick, 50

and older, is still the fastest growing demographic of anyone that we see. and it's not just necessarily them shopping one time and then using paypal. we're continuing to see elevated levels of engagement. and i think that really speaks to the value proposition around digital payments. once you go through that, once you buy something online and you shop with limited friction by checking out, you continue to do it because it is, in fact, an easier way to transact. jack: we're tight on time, but i want do you, you mentioned crypto, wit coyne. i think of -- bitcoin, i think of that more as a speculative investment, but you guys give them some cd by being on pay -- cred by being on paypal. >> one of the interesting things we see about users that have bought cryptois 50% of them are coming to the app daily to engage with the app in some way. and the unique thing that paypal offers its customers that no one

else is doing is not only can they buy and sell cryptocurrency, they can use it to shop at our network of 30 million merchants around the world. historically, i think merchants have been are luck about the to accept that as a form of payment because of the very reason that you mentioned, the volatility. but are allowing our customers to do that in some ways makes it a more fungible currency. the merchants aren't bearing new risk because we actually convert it to few yacht prior to that transaction occurring. in some ways, this does make it much more like a currency versus an invest vehicle. jack: john rainey, thank you so much. >> thanks, jack. jack: coming up, the list of top stock picks for 2021. we'll reveal five of them right here. after the break. ♪ ♪ research shows people remember commercials with nostalgia.

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♪ ♪ jack: this week barron's announces our much-anticipated annual list of top ten stocks for the coming year. associate editor and veteran stock bucker andrew berry joins us now to reveal five of them. pleasure to have you back on the show. i love this feature each year. 2020 was a great year for at least half the market. what do you see in 2021? >> good to be back, jack. investors need to scale back their expectations for 2021 given how well the stock market's done in the past two years. the s&p 500's returning about 50% since the start of 2019, and valuations are at near record levels with the s&p trading for more than 20 times next year's anticipated earnings. my guess is stocks return maybe 5 or 10% next year with. jack: so some analysts are writing about the pfizer flip once this first vaccine was announced, it seems like some of

the value names that were not benefiting from the pandemic are doing a little better, gaining ground on the stay at home stocks. are you seeing that? >> yeah. the value stocks have done better recently, but for the year, it's way behind growth. valued about flat, growth is up about 30%. the stock market likes to have a value orr yen talkings and could do quite well if the recent run continues. jack: so let's go to your picks. the first one actually is one of those big tech stocks. >> yeah. the first pick is alphabet. it's a fantastic collection of businesses including their search engine, waymo, chrome, android, youtube. and considering the growth prospects of the company, alphabet may generate mid teens growth in earnings the next couple of years. the stock reasonably priced. >> hey, andrew, it's your pal

jack howe, i can't see you on my screen right now, but it's okay. i keep a picture of you on my wall at home. i'm with you on alphabet, but do you think it will get broken up over the next five years, and what do you think that'll do for the stock's valuation? >> well, regulatory risk is a problem. most analysts don't think anything serious will happen to alphabet, but if the company were to be broken up, investors could benefit because the value of pieces of alphabet is going to be more than the current market value. jack: andrew, you mixed msg entertainment. tell us about that. >>msg entertainment owns madison square garden ma mat -- manhattan, and it's building a state of the art con sort venue in las vegas called the sphere. are opening stocks have been hot, and they've been a laggard lately. it should benefit in 2021 if sports fans and con sort-goers

return to -- concert-goers return to madison square garden in new york and also plan a revival in tourism in las vegas. >> andrew, just wondering, i totally understand the new york madison square garden, but even before the pandemic that las vegas have been you was getting a rot of criticism from investors -- a lot of criticism. do you think it really can deliver what even was hoping for? -- everyone was hoping for? >> well, it has been controversial. people doubt that entertainment can earn the kind of returns it hopesful we'll see what happens. but not a lot of good news and anticipation. is discounted in the stock. the arena's going to open in 2023 which gives a reasonable amount of time for revival in tourism in las vegas for them to take advantage of. jack: let's go through the last three quickly. you like berkshire hathaway here. >> coming off one of its worst periods of relative performance against the s&p 500 during buffett's 55 years at the helm. it generally pays to buy

berkshire when that happens. the stock is reasonably priced here and could men put in the post-buff if the era. >> hey, andrew, we've been hearing this about berkshire for a few years now, and the stock doesn't get better. isn't there are a lot of key man risk here? >> there defendant is with buffett 90 user old, but the company is likely to start paying a dividend. and, again with, with berkshire the sum of the parts of berkshire including companies like burlington, northern and geico are considerably worth more now. jack: gold selling a -- goldman, a time to buy. >> it's got a great fran choose, coming off record or earnings and pretty reasonably valued. they've been diverse fewing to areas like questioner banking,

and those initiatives show promise. jack: and real quick, your fifth pick is newman mooning. is that kind of an inflation play? >> it's an inflation play. i i mean, gold is up 20%, bitcoin, as jack howe mentioned earlier, is tripled. i'd rather own gold than bitcoin. and the world's leading gold minor offers a good play on gold. it's pretty reasonably priced at about 13 time, next year's earnings, it's very with run and is likely to have steady production, over 6 million ounces a year for the next decade or more. jack: andrew, always a pleasure. to see the rest of the pick,s, you're going to have to pick up the magazine or go online. r stay right there. thank you for the good food... and the good karma. thank you for all the deliveries... especially this one.

you've reminded us that no matter what, we can always find a way to bounce forward. so thank you, to our customers and to businesses everywhere, from all of us at comcast business.

♪

♪ jack: jack, i don't bet on sports because i'm a jets fan, and that would be financially disastrous for me. but it's a pretty good business as you found out when you spoke to draftkings. >> yeah, i spoke with jason robbins, cofounder, and the stock has multiple plied in value this year. draftkings is now worth about $21 billion. that's $6 billion more than mgm, the big casino company. and so i asked him how big do you think the company can become. he thinks it could be a $100 billion company eventually, is so almost five times today's value. and he says he aspires to be like amazon, wants to use his customer relationships now to expand into new businesses. he news gambling on video games could one day take off. you can hear that whole interview on my barron's street wise podcast. jack, i'll leave it to you to decide whether to buy draftkings

stock in your robin hood account and paw for it with -- pay for it with bitcoin. [laughter] jack: more proof that the house always wins. the stock was up 434% on the year. impressive. we end, as always, with some actionable ideas. carlton, what do you have for us? >> so going off of jack, we're talking gambling. i'm saying now may be a time to take some chips off the table. end of year is a good time to take a look at your portfolio, look at some of the winners, maybe just drum them back, rotate into some value-oriented investments or other things that will do well as the economy reopens. jack: ben? >> unlike carlton, i want to put chips on the table. take a look at chipotle. the stock has been in a rut since about the beginning of september, and it finally hit a new high this week. it hasn't taken off yet. their tech is fantastic, they keep offering new products, and it'll be even better once the

lockdown ends. jack: great ideas, thank you. check out this week's edition of barron's.com. that is all for us. wear your masks, be healthy, and we will see you next week on barron's round table. ♪ >> from the fox studios in new york city, this is maria bartiromo's "wall street." maria: and happy weekend, everybody. welcome to the program that analyzes the week that was and helps position you for the week ahead. i'm maria bartiromo. thanks so much for joining us this weekend. in just a few moments, we will get jonathan ward's take on former disney ceo bob iger being considered as the next ambassador to china. we are talking china with the founder of the atlas organization. and another big development in the fight against covid-19, moderna having the second vaccine approved, millions of doses of pfizer's drug already being distributed, the ceo of