twitter, facebook if instagram, and i'll will back next week right here on "the wall street journal at large." thank you for joining us. ♪ ♪ ♪ ♪ jack: welcome to a potential edition of "barron's roundtable". this week we're looking ahead to how the market might surprise us in 2021 is. i'm jack cotter. so-called -- jack otter. technology investor kevin lanza joins us with more opportunities for 2021 and and beyond. then will anyone really want to get on an airplane or take a cruise next year? we've got the travel stocks poised to take off, and hater, the three stocks we think you should avoid in 2021. you don't want to miss it.

but we begin this special edition with our top three surprises. the fed has signaled they will keep rates near zero, but could covid-19 vaccine spark inflation? and move if over, tesla, bank of america will be 2021's high flyer. on the bare ron's round table, ben levisohn, carlton english and jack howe. ben, for years economists have warned inflation was just around the corner, you know, those deficit hawks, regular meshes said they -- americans said they saw inflation, but the fed has said there's no inflation. >> that's right. but this year there may be a bit of a surprise. economists have been predicting 4% growth, but they actually might be underestimating how strong growth could be in this coming year. some people i've talked to think it could be as high as 6.5%, and they also think that inflation could reach 2.5-3.5%.

that's faster than anyone, including the fed, is planning for. jack: so one economic reason whey that sounds odd to me, not only are we down, i think, 11 million workers, but there are not as many people who are actually in the job market. so you've got to puck up that slack -- pick up that slack, then you've got to get people back in the job market. >> actually, wages have been holding up really well, in some cases rising. i think what we will see is we know that the jobs that have been lost have been in things like restaurants and bars and other service-oriented businesses that require people to be face to face with each other. and then when we've seen the vaccine get out there, when we see covid finally under control, these jobs are going to come back, they'll come back quickly. i think businesses is are really ready to spend to get people back, and welcomed see an upside -- we could see an upside surprise even in services. jack: okay. so now you've got more employees making more, but factories have

not been cranking out that much stuff, so is that more money chasing fewer things? >> it could be. it's just a question of are people going to want to put the money to work. i think they will. they got a lot of money went out through the first round of fiscal stimulus, we might get a second round of fiscal stimulus, and i think there's just a lot of money to be spent on a lot of stuff. there may not be enough of it as things start to reopen. jack: so, jack, tell us, all this growth will at least be good for stock, right? >> i mean, the starting point for stocks is expensive, right? we're way over 20 times earnings on the u.s. stock market, and there's all this good news you're talking about, there's vaccines, jobs, businesses reopening, and as ben said, or we'll get better economic growth. the problem is it starts to look like a mirror image of early 2020. and we we know then that bad news for the economy ended up being good news for stocks because congress and the federal

reserve did extraordinary things to support people who were struggling and also financial markets that were struggling. if the news looks a lot better in 2021, you could get much less of that kind of stimulus. and just a thought on investors' minds that they might be getting press stimulus -- less stimulus could make them nervous. michael hartnet, he calls this sell the vaccine thesis. he thinks within the next couple of months you're going to get a pretty good selling opportunity for the u.s. stock market, and then he thinks we'll stay in a pretty wide trading range after that. i'm not saying that there's a crash coming or anything like that, just saying it might not be as good news in 2021 is as in 2020. jack: the old buy the rumor, sell the news rule, i guess. so, carlton, if people weren't shocked by what ben and jack had to say, they better sit down the hear when you're going to tell us, which is after tesla zoomed,

what, 700% higher this year, you think a bank is actually the place to put your money next year? >> i do. now, let me be clear before i get a bunch of angry e-mails. i'm not saying that bank of america's stock is going to have the type of 2021 that tesla had in 2020. i don't see it going up 700% or anything like that, but i think the appetite for some of these high-flying growth stocks is going to wane in 2021, and the an tighten and the conditions for, you know, basically bank of america and other universal bank stocks look good. on the banks, the balance sheets are looking strong, they reserved a lot for loan losses, and a lot of executives saw they may have overreserved. so some of them may be released into earnings as the vaccine is rolled out. we're going to see the economy reopen, that is going to help banks. and there are so many different businesses, your basic lending and asset management, they're really going to be able to weather the storm, and i think we're going to see a good year for them. analysts are not expecting much

loan growth next year, but they still see earnings increasing by 15% for the sector. jack: ben mentioned that rates or at least inflation could go up. if rates were to go up, real quick, explain to viewers why that is good for bank names. >> yeah. so when the rates go up, when you're looking at the longer end of the yield curve, that's basically where the banks are lending out their money, so they're earning that higher rate. you and i maybe aren't earning as much on our deposits as we would like, but that spread between the higher longer rate and the lower shorter rates is what really helps the banks. jack: so if you wonder whew you pay a lot for your mortgage but nothing in your savings, carlton just, planned it. coming up, the new stocks that could take a bite out of the fangs, and find out who's on our grinch list for 2021. ♪ you're a mean one,

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♪ jack: bank stocks dominated the market in 2020, but the companies driving the next round may be the winners in 2021. joining me now president of firsthand fund, ken lanza. -- kevin lanza. thanks a lot for joining us. >> good to be here. jack: this year about to end, currently fantastic for the technology sector, but whenever it happens, i mean, your tech opportunities fund nearly doubled. whenever i see that, of course, i grew up in 1999, 2000, i think, uh-oh, the crash is coming. but you remain bullish. >> that's right. that's right. we think that as crazy a year as it's been with so many, so many challenges, it's really caused people to reset their expectations and rethink a lot of things. and that's actually good for the

psychology of accepting new solutions and more innovation. so in a weird way, that helps technology. jack: that's interesting. so stay at home stocks were obviously the play, many of the best performing stocks at least benefited from the fact that we were all zooming or at home exercising, whatever -- >> right. jack: what do you see as the big trend for the coming year in. >> well, i think that what's really helped us was to take a look at what was not just a stay at home stock, but what was a stock that was riding a trend that was already going to happen anyway. people are streaming more and more, people are using distance learning more and more and really just kind of doubling down on those existing trends that that just got all righted by the fact that people's lyed -- accelerate ared by the fact that people's lives were so disrupted. jack: so one trend, we've had it for a while, was electric vehicles.

you think that's certainly around to stay. you said to me you looked at tesla, but before you bought it, drove away. you found another stock, though, that will benefit no matter what car company does well. >> well, that's right. you know, if you look under the hood, so to speak, of an ev, first of all, you won't see the engine because there isn't one. but if you really look inside the ev, what you'll find is there are some real power electronics challenges. and this a may be a little bit esoteric, but you can't just use regular silicone chips to drive those power circuits. you need to use something called silicone carbi or -- carbide. they're likely to be inside almost all of the, vs, and that's a nice place to be. jack: if tesla keeps on zooming,

they're in that too. >> that's right. that's right. and, you know, that's -- and you can find doesn't examples where people do this on tech trends where they try to find sort of the arms more chant of the emerging ecosystem or sort of everyone's friend in the emerging ecosystem, and that's a way to maybe squeeze some of the uncertainty out of this big bet you're taking on the future. jack: so a very different type of company, a real story stock is peloton. i love the billion on the, i think it's incredible -- peloton, but again, it's a big runup. do you think it can still keep on going? >> you know, peloton was a very interesting trade that we got into, and i'm thinking more and more every day like maybe we're just going to keep it. [laughter] and i think what'll be telling here is pay attention to how quickly people come back to the gyms once the gyms are open. i don't know what percentage of people who bought a peloton will ever go back to the gym. and if they don't and they really like sort of their ability to socialize while they

exercise, then, you know, that might be a more permanent shift of human behavior. so, and, you know, it looks like it's expensive, but compared to a gym membership, you know, maybe it's reasonable. jack: that's a good point, and it's right down there in the basement. one more thing and that is' roku. we've seen enormous disruption in the intertalk aboutment industry, of course. -- entertainment industry. roku, you think, is poised to one no matter how those trends go? >> right. roku has -- think of it this way. netflix at first was sort of everybody's partner, everybody's friend, a little non-threatening company, and then they kind of snuck up on us and became kind of a beast, and they got into content. roku never gets in a fight with anybody, they part partner up with everybody, and there's an angle on whatever streaming service you like whether hulu,

disney or amazon. roku plays well with everybody. and that's what we really like about it. and it's really, you know, pretty modest market cap still each though it's performed incredibly well this year. so it's a good case there as well that you can get with kind of a small to mid cap stock that's in the right place at the right time, and there's plenty of headroom for that stock to appreciate. jack: kevin landis, thank you so much. >> thank you. jack: coming up, the vaccine rollout means next year cooped-up americans may finally be able to go on vacation, and that's good news for the travel business. the stocks that are poised to when you're through with powering through, it's time for theraflu hot liquid medicine. powerful relief so you can restore and recover.

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♪ jack: the travel industry was one of the hardest hit but the pandemic. with a vaccine finally rolling

out, cruise operators, airlines and more are poised to make a comeback. matthew upchurch joins us now, thank you so much for coming on the show. we appreciate it. >> thank you so much, jack. jack: you know, can you put some numbers on this? we all know that travel was hurt, but let us know quite how bad it was. >> yeah, i don't think people fully understand the size and scope of the industry, because it's not always aggregated appropriately. but globally, it's a little over 10% of the gdp, 330 million jobs globally. and right now we're on track to lose 174 million jobs by the end of this year. and a lot of people think of travel as just, you know, ya maw ca or those places, but we actually don't understand here in the u.s. that there's almost 60 billion jobs. at the height of the great depression, we're at 50% of -- 75% of direct jobs and 50% of direct and indirect employment being affected here in the

united states alone. so it's massive. jack: the good news is you are seeing a bounceback already. who's coming back the fast? >> yeah, you know, it's been amazing. the vaccine has really changed people's psyche from the perspective of starting to have inquiries. you know, nothing changes consumer behavior like having something taken away from you that you took for granted. so we're seeing a lot of that. and i think what you're going to see is leisure travel is going to come back faster than business travel for a lot of reasons. never in the history of the planet have we ever had five generations of people from the baby boomers that will have a tremendous amount of time after prudence all the -- affluence all the way to the millennials and gen-zs who have traded goods for experiences. we've had good domestic and regional travel and luxury travel particularly is going to come back fast. jack: carlton, this trend will

help airlines, and lauren strauss thinks ryan air in particular is poised to benefit? >> yeah, so he's looking at that, and when it comes to looking at the airlines, he's also looking at the long-term prospects. ryan air is europe's low cost leader, and it's been adding capacity fast or than rivals. as travel picks up in europe, that airline is really poised to -- i don't want to say this, but fly. [laughter] >> so, jack, i'm not really in a hurry to get on a cruise ship right at the moment. but apparently, barron's thinks norwegian will be the beneficiary as people do start to get back. >> yeah, i'm with you. it could be years before the group gets back to it former profitability, but if you want to make a contrarian investment in cruise lines, our colleague says norwegian is the one. it has more of a luxury skew, and that's good right now. it also has small or ships.

when the time comes that people want to go back to cruising, they might prefer to go back to ships with 1,000 beds rather than, say, 5,000 beds. the company has said bookings have been pretty strong, so this' good. the stock sells for less than half of what it did before the pandemic but, again, you've got to patiently wait for those to bounce back -- jack: what are you seeing in terms of cruise line booking? >> i totally agree. you know, this has been the tale of two different considers, those that have cruised before and those that haven't. so with all the seven saucal press that the cruise industry got, the reality those people that have cruised before, the world cruise for 2022-23 sold out in 48 hours. there's a huge amount of pent-up grand because of the millions of people who know this category are very bullish on this, and our forward bookings have actually been quite strong, if not stronger than coming into 2020. jack: wow.

is so one interesting thing though, ben, is that it's not just the luxury brands that we with think can do well, caesar's in las vegas is a barron's pick. >> that's right. and caesar's is, or you know, we've talked about the pent-up demand. it's going to benefit from that. it has casinos in las vegas, has casinos elsewhere. what's helped it during the pandemic has been its online gaming. that's been a big boost. but i think what people underestimate is just the cost savings that companies are going to have coming out of the crisis. just think about the buffet at any ca so know. jack: do i have to? >> those things are expensive, they are wasteful, and they're not going to be back the way that they were before, and that's going to help margins and casino companies. i think that's what's going to provide the next leg up for growth for these kind of stocks. jack: if the nsa made a sneeze guard out of kevlar, i don't think i'd go to a buffet. thanks, guys.

up next, the panel is back with three stocks that you should avoid in the new year. it's our grinch list. but first, remember what jack said earlier this year? >> if you see a wide theater release of that movie this year, i dress as wonder woman -- i will dress as wonder woman on the last episode of this show ♪ ♪ [ engines revving ] ♪ it's amazing to see them in the wild like th-- shhh. [ engine revs ] for those who were born to ride, there's progressive. there's an art to listening. it's the ability to hear more than what's being said.

to understand the meaning in every pause. and to be able to offer the answers that make someone feel truly heard. i understand, let's get started. that's what you get when you talk to a dell technologies advisor. to all the businesses make it through 2020... thank you for going the extra mile... and for the extra pump of caramel. 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. finding the right words can be tough.n it comes to autism, finding understanding doesn't have to be.

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♪ jack: jack, you bet that wonder woman would not open wide nationwide on christmas day, but warner brothers had other ideas. the stakes were high, and you lost that bet. [laughter] >> i did, jack. i gist want to say that -- just want to say that i've got newfound respect for anyone if out there trying to fought crime in a corps9. i don't even know how you swung your lasso of truth in this

thing. jack, i'm going the stick we show business for my grinch stock pick, and i'm going to go with netflix. it's a wonderful company, wonderful service, and they had a very good 2020 for the stock, but disney has twails been -- has actually been the better performer e over the past few months. think they have surprised wall street with their streaming growth, and these two companies had similar market values at one point. diss' pulling ahead. i -- disney's pulling ahead, athink people are anticipating they could at some point pass netflix, so could be a slower year for netflix. that's my grown. pick of the year. but the way, jack, i only needed the top half of this costume for television. i'm thinking about happening on to these for pool season next year. how do you tell chat the front and which is the back? jack: i do not know, but you are not allowed to undermine netflix. it's a free market, buddy, all right? ben, what is your grinch pick.

let's get jack off the screen. >> zoom, video communications. the stock is up 500% in 2020. it trades at 139 times 12-month forward earnings estimates. incredible. i don't know about you, but i, for one, never want to do another video conference once we're all back in the office again. jack: tough comps. zoom has, i think, 1 is 55 gain in revenue. tough to repeat that next or year. carlton, your pick is involving people who might be able to help jack figure out which way those little under things go. [laughter] >> yeah. so l brands. the stock more than doubled this year, a lot of it was spinning off victoria's secret. they could certainly help jack out if he needs it. but a lot of that is already are baked in. if the spin-off happens next year as it's expected to, you're basically looking at bath and body works, a soap and candle store. i don't see much more happening

with it, certainly not a repeat of this year. jack: carlton, ben, those are great insights. jack, i can't wait for the next bet. don't forget to follow us on twitter@barron's online. that is all for us. ... male announcer: coming up next on "leading the way." dr. michael youssef: there are some who pretend that war between the spirit and the flesh on the inside of us just do not exist. beloved, when it comes to the spiritual war, there are winners and there are losers. only a total and unconditional obedience will guarantee us every time that we will be victorious. announcer: coming up next. ♪