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The Top Fintech Companies That Younger Investors Should Own

Let’s take a look at the top fintech companies that young investors should own. These stocks are worth potentially adding to your portfolio.
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For a few years, a handful of companies have dominated the financial technology (fintech) industry. This list includes companies like Visa, Mastercard, American Express, Discovery and PayPal. But it’s likely that these companies’ best growth years are behind them. Luckily, there are tons of exciting, young top fintech companies to invest in.

In some cases, these companies are creating entirely new industries. If you are a younger investor with a long-time horizon, the following companies are all worth potentially adding to your portfolio. With that in mind, let’s take a look at the top fintech companies that younger investors should own.

Top Fintech Companies to Buy

No. 5 SoFi Technologies (Nasdaq: SOFI)

When it comes to financial apps, SoFi Technologies is a little bit of a jack-of-all-trades. Its bread and butter is loans (mortgages, student loans, personal loans, etc.). But it also has products for investing, banking, insurance and money management. So far, Sofi’s stock has been a rollercoaster. It went public in late 2021 and its stock shot up to $25 per share. Since then, it has come crashing down to under $10. Despite this slump, there’s still plenty of good news that makes this company one of the top fintech companies to own for the long run.

Insider Buying

As legendary investor Peter Lynch said, “Insiders will sell their stock for all types of reasons. But they only ever buy for one: they think the price will go up.” In the past six months, there have been 48 instances of insiders at SoFi buying more stock. At the same time, there have been just seven transactions of insiders selling. In particular, CEO Anthony Noto has been scooping up stock.

Who has more insight into the business than the CEO? Probably nobody. The fact that Mr. Noto is putting his money where his mouth is is a great sign to SoFi investors.

Banking charter

SoFi recently got approved for its long-awaited national bank charter. This will allow SoFi to offer more competitive interest rates which could improve its lending business. Previously, SoFi relied on a partner bank to offer loans, which ate into its margins. This charter should help with SoFi’s profitability over the long term. It also gives SoFi the ability to offer high-yield checking and savings accounts. This charter approval came at the perfect time as interest rates are on the rise.

The Federal Reserve recently raised the Federal Funds rate, its first raise since 2018. In general, higher interest rates are good for banks. This is because a bank can profit from the difference between the interest it pays to customers and the interest it earns from investing.

Keep reading for more info on top fintech companies.

No. 4 Affirm Holdings (Nasdaq: AFRM)

Affirm Holdings is one of the world’s biggest Buy Now, Pay Later companies. Buy Now, Pay Later is a new industry that allows customers to finance online purchases. For example, instead of paying $150 for a pair of shoes online, Affirm will let you pay $50/month over three months. In this sense, it essentially offers the same service as a credit card. There are a handful of Buy Now Pay Later services out there. But, there’s one thing that separates Affirm and makes it one of the top fintech companies out there.

Affirm has a massive moat of partner companies. By this point, it partners with almost every major retail brand in North America including Target, Amazon, and Walmart. Since BNPL is such a new industry, this moat will play a crucial role. It helps to establish Affirm as the leader in the space. Since consumers will constantly see Affirm’s name at checkout, they will subconsciously associate it as the safer option. This helps Affirm build consumer trust, which leads to repeat clients.

Another distinct advantage that Affirm has? Its CEO.

Who is Max Levchin?

Max Levchin emigrated to the U.S. from Ukraine as a teenager. While in college, Max had no money and signed up for a credit card. A few semesters later, he was buried in debt and had trashed his FICO score. This is when he first realized the importance of finance.

He developed a love for financial services and later co-founded PayPal alongside Elon Musk and Peter Thiel. Years later, he used this experience to found Affirm. With a net worth in the billions, Levchin is no longer motivated by money. Instead, his passion is to help others get access to credit (something he struggled with in college).

Levchin also had an amusing answer to a question on Affirm’s lack of profitability in a Yahoo Finance interview:

“So I do think it’s my responsibility and the company’s responsibility to make money. Like we’re not a charity, we never declared ourselves to be nonprofits. So I do not want to mislead anyone into believing that we do not intend to make money. We very much intend to make money, and hopefully lots of it, and continue to do so for shareholders forever and ever. And we intend to be a self-sustaining business.”

Notably, Max Levchin has not sold a single share of Affirm stock, one of the top fintech companies. He’s in it for the long run.

No. 3 Toast (NYSE: TOST)

Have you ever been to a restaurant where you paid the bill right at your table using a small device? That was most likely Toast. The official name for Toast’s business is cloud-based restaurant management software. Toast went public in late 2021 and has had a rough start so far. Since going public, its stock is down over 60%.

Before judging Toast’s stock too harshly, though, remember what’s been going on the past few years. For the most part, many restaurants have been shut down due to COVID-19. During this time, companies like Toast were set up for failure. Luckily, things turned around slightly in 2021 as restaurant sales lept 41%. Moving forward, Toast’s toughest days are hopefully behind it.

Similar to Uber, you don’t need to be a business mastermind to realize that Toast offers a superior product. It makes the restaurant experience faster, easier, and more efficient for everyone involved. As it continues to grow its product offerings, it’s easy to see Toast becoming one of the top fintech companies to own.

No. 2 Coinbase (Nasdaq: COIN)

As a cryptocurrency exchange, many people may not consider Coinbase a fintech company. However, there’s a good reason why this could change very soon.

Something very notable happened during the Russia and Ukraine conflict. After martial law was declared, Ukraine’s central bank cracked down on digital money transfers. Due to this, the government started accepting donations in cryptocurrency. After this announcement, donations started rolling in in the form of Bitcoin, Ethereum, Tron, Polkadot, Dogecoin and Solana.

In total, Ukraine received 102,000 cryptoasset donations totaling $54.7 million. For reference, the USAID pledged $54 million in aid. While these donations are great news for Ukraine, this scenario could also be the start of a bigger trend.

In the past, crypto critics have exclaimed that there is little real-world use for crypto. They lamented that crypto is just a bubble and get-rich-quick scheme. Now, the situation with Ukraine completely negates this argument. In a critical time of need, crypto provided a viable option to dodge central bank regulations and instantly send money where it needed to go. Moving forward, crypto has proven itself as a legitimate way to raise and send money.

As one of the world’s largest exchanges, Coinbase could very well be one of the top fintech companies to own in the coming years. Of course, this depends on how the future of crypto plays out.

Top Fintech Companies No. 1 Block Inc (NYSE: SQ)

Of all of the companies on this list, Block Inc (formerly Square) is the most established. Block is best known for its point-of-sale tablets. However, over time, it has developed a large ecosystem of commerce solutions. It owns the popular money-sending app Cash App as well as the Buy Now, Pay Later service, AfterPay.

Block’s acquisition of AfterPay is a formidable addition to its ecosystem. Now, Block will let consumers pay for products in a multitude of different ways. Consumers can pay via a Square terminal, Cash App, the Cash App debit card, and now AfterPay. With this ecosystem in place, Block is dangerously close to achieving the network effect.

The network effect is when a product or service becomes more valuable with each additional user. Essentially, as more stores offer Block’s checkout products, it will incentivize more consumers to start using them (and vice versa). Due to this, Block could be incredibly close to exponential growth.

Looking forward, it’s easy to see Block Inc becoming one of the leading payment processing companies. One thing is for sure. It’s already one of the top fintech companies that younger investors should own.

I hope that you’ve found this article valuable for learning some of the top fintech companies every investor should own. Please remember that I’m not a financial advisor and am just offering my own research and commentary. As usual, please base all investment decisions on your own due diligence.

The post The Top Fintech Companies That Younger Investors Should Own appeared first on Investment U.

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International

The next pandemic? It’s already here for Earth’s wildlife

Bird flu is decimating species already threatened by climate change and habitat loss.

I am a conservation biologist who studies emerging infectious diseases. When people ask me what I think the next pandemic will be I often say that we are in the midst of one – it’s just afflicting a great many species more than ours.

I am referring to the highly pathogenic strain of avian influenza H5N1 (HPAI H5N1), otherwise known as bird flu, which has killed millions of birds and unknown numbers of mammals, particularly during the past three years.

This is the strain that emerged in domestic geese in China in 1997 and quickly jumped to humans in south-east Asia with a mortality rate of around 40-50%. My research group encountered the virus when it killed a mammal, an endangered Owston’s palm civet, in a captive breeding programme in Cuc Phuong National Park Vietnam in 2005.

How these animals caught bird flu was never confirmed. Their diet is mainly earthworms, so they had not been infected by eating diseased poultry like many captive tigers in the region.

This discovery prompted us to collate all confirmed reports of fatal infection with bird flu to assess just how broad a threat to wildlife this virus might pose.

This is how a newly discovered virus in Chinese poultry came to threaten so much of the world’s biodiversity.

H5N1 originated on a Chinese poultry farm in 1997. ChameleonsEye/Shutterstock

The first signs

Until December 2005, most confirmed infections had been found in a few zoos and rescue centres in Thailand and Cambodia. Our analysis in 2006 showed that nearly half (48%) of all the different groups of birds (known to taxonomists as “orders”) contained a species in which a fatal infection of bird flu had been reported. These 13 orders comprised 84% of all bird species.

We reasoned 20 years ago that the strains of H5N1 circulating were probably highly pathogenic to all bird orders. We also showed that the list of confirmed infected species included those that were globally threatened and that important habitats, such as Vietnam’s Mekong delta, lay close to reported poultry outbreaks.

Mammals known to be susceptible to bird flu during the early 2000s included primates, rodents, pigs and rabbits. Large carnivores such as Bengal tigers and clouded leopards were reported to have been killed, as well as domestic cats.

Our 2006 paper showed the ease with which this virus crossed species barriers and suggested it might one day produce a pandemic-scale threat to global biodiversity.

Unfortunately, our warnings were correct.

A roving sickness

Two decades on, bird flu is killing species from the high Arctic to mainland Antarctica.

In the past couple of years, bird flu has spread rapidly across Europe and infiltrated North and South America, killing millions of poultry and a variety of bird and mammal species. A recent paper found that 26 countries have reported at least 48 mammal species that have died from the virus since 2020, when the latest increase in reported infections started.

Not even the ocean is safe. Since 2020, 13 species of aquatic mammal have succumbed, including American sea lions, porpoises and dolphins, often dying in their thousands in South America. A wide range of scavenging and predatory mammals that live on land are now also confirmed to be susceptible, including mountain lions, lynx, brown, black and polar bears.

The UK alone has lost over 75% of its great skuas and seen a 25% decline in northern gannets. Recent declines in sandwich terns (35%) and common terns (42%) were also largely driven by the virus.

Scientists haven’t managed to completely sequence the virus in all affected species. Research and continuous surveillance could tell us how adaptable it ultimately becomes, and whether it can jump to even more species. We know it can already infect humans – one or more genetic mutations may make it more infectious.

At the crossroads

Between January 1 2003 and December 21 2023, 882 cases of human infection with the H5N1 virus were reported from 23 countries, of which 461 (52%) were fatal.

Of these fatal cases, more than half were in Vietnam, China, Cambodia and Laos. Poultry-to-human infections were first recorded in Cambodia in December 2003. Intermittent cases were reported until 2014, followed by a gap until 2023, yielding 41 deaths from 64 cases. The subtype of H5N1 virus responsible has been detected in poultry in Cambodia since 2014. In the early 2000s, the H5N1 virus circulating had a high human mortality rate, so it is worrying that we are now starting to see people dying after contact with poultry again.

It’s not just H5 subtypes of bird flu that concern humans. The H10N1 virus was originally isolated from wild birds in South Korea, but has also been reported in samples from China and Mongolia.

Recent research found that these particular virus subtypes may be able to jump to humans after they were found to be pathogenic in laboratory mice and ferrets. The first person who was confirmed to be infected with H10N5 died in China on January 27 2024, but this patient was also suffering from seasonal flu (H3N2). They had been exposed to live poultry which also tested positive for H10N5.

Species already threatened with extinction are among those which have died due to bird flu in the past three years. The first deaths from the virus in mainland Antarctica have just been confirmed in skuas, highlighting a looming threat to penguin colonies whose eggs and chicks skuas prey on. Humboldt penguins have already been killed by the virus in Chile.

A colony of king penguins.
Remote penguin colonies are already threatened by climate change. AndreAnita/Shutterstock

How can we stem this tsunami of H5N1 and other avian influenzas? Completely overhaul poultry production on a global scale. Make farms self-sufficient in rearing eggs and chicks instead of exporting them internationally. The trend towards megafarms containing over a million birds must be stopped in its tracks.

To prevent the worst outcomes for this virus, we must revisit its primary source: the incubator of intensive poultry farms.

Diana Bell does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.

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NY Fed Finds Medium, Long-Term Inflation Expectations Jump Amid Surge In Stock Market Optimism

NY Fed Finds Medium, Long-Term Inflation Expectations Jump Amid Surge In Stock Market Optimism

One month after the inflation outlook tracked…

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NY Fed Finds Medium, Long-Term Inflation Expectations Jump Amid Surge In Stock Market Optimism

One month after the inflation outlook tracked by the NY Fed Consumer Survey extended their late 2023 slide, with 3Y inflation expectations in January sliding to a record low 2.4% (from 2.6% in December), even as 1 and 5Y inflation forecasts remained flat, moments ago the NY Fed reported that in February there was a sharp rebound in longer-term inflation expectations, rising to 2.7% from 2.4% at the three-year ahead horizon, and jumping to 2.9% from 2.5% at the five-year ahead horizon, while the 1Y inflation outlook was flat for the 3rd month in a row, stuck at 3.0%. 

The increases in both the three-year ahead and five-year ahead measures were most pronounced for respondents with at most high school degrees (in other words, the "really smart folks" are expecting deflation soon). The survey’s measure of disagreement across respondents (the difference between the 75th and 25th percentile of inflation expectations) decreased at all horizons, while the median inflation uncertainty—or the uncertainty expressed regarding future inflation outcomes—declined at the one- and three-year ahead horizons and remained unchanged at the five-year ahead horizon.

Going down the survey, we find that the median year-ahead expected price changes increased by 0.1 percentage point to 4.3% for gas; decreased by 1.8 percentage points to 6.8% for the cost of medical care (its lowest reading since September 2020); decreased by 0.1 percentage point to 5.8% for the cost of a college education; and surprisingly decreased by 0.3 percentage point for rent to 6.1% (its lowest reading since December 2020), and remained flat for food at 4.9%.

We find the rent expectations surprising because it is happening just asking rents are rising across the country.

At the same time as consumers erroneously saw sharply lower rents, median home price growth expectations remained unchanged for the fifth consecutive month at 3.0%.

Turning to the labor market, the survey found that the average perceived likelihood of voluntary and involuntary job separations increased, while the perceived likelihood of finding a job (in the event of a job loss) declined. "The mean probability of leaving one’s job voluntarily in the next 12 months also increased, by 1.8 percentage points to 19.5%."

Mean unemployment expectations - or the mean probability that the U.S. unemployment rate will be higher one year from now - decreased by 1.1 percentage points to 36.1%, the lowest reading since February 2022. Additionally, the median one-year-ahead expected earnings growth was unchanged at 2.8%, remaining slightly below its 12-month trailing average of 2.9%.

Turning to household finance, we find the following:

  • The median expected growth in household income remained unchanged at 3.1%. The series has been moving within a narrow range of 2.9% to 3.3% since January 2023, and remains above the February 2020 pre-pandemic level of 2.7%.
  • Median household spending growth expectations increased by 0.2 percentage point to 5.2%. The increase was driven by respondents with a high school degree or less.
  • Median year-ahead expected growth in government debt increased to 9.3% from 8.9%.
  • The mean perceived probability that the average interest rate on saving accounts will be higher in 12 months increased by 0.6 percentage point to 26.1%, remaining below its 12-month trailing average of 30%.
  • Perceptions about households’ current financial situations deteriorated somewhat with fewer respondents reporting being better off than a year ago. Year-ahead expectations also deteriorated marginally with a smaller share of respondents expecting to be better off and a slightly larger share of respondents expecting to be worse off a year from now.
  • The mean perceived probability that U.S. stock prices will be higher 12 months from now increased by 1.4 percentage point to 38.9%.
  • At the same time, perceptions and expectations about credit access turned less optimistic: "Perceptions of credit access compared to a year ago deteriorated with a larger share of respondents reporting tighter conditions and a smaller share reporting looser conditions compared to a year ago."

Also, a smaller percentage of consumers, 11.45% vs 12.14% in prior month, expect to not be able to make minimum debt payment over the next three months

Last, and perhaps most humorous, is the now traditional cognitive dissonance one observes with these polls, because at a time when long-term inflation expectations jumped, which clearly suggests that financial conditions will need to be tightened, the number of respondents expecting higher stock prices one year from today jumped to the highest since November 2021... which incidentally is just when the market topped out during the last cycle before suffering a painful bear market.

Tyler Durden Mon, 03/11/2024 - 12:40

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Spread & Containment

A major cruise line is testing a monthly subscription service

The Cruise Scarlet Summer Season Pass was designed with remote workers in mind.

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While going on a cruise once meant disconnecting from the world when between ports because any WiFi available aboard was glitchy and expensive, advances in technology over the last decade have enabled millions to not only stay in touch with home but even work remotely.

With such remote workers and digital nomads in mind, Virgin Voyages has designed a monthly pass that gives those who want to work from the seas a WFH setup on its Scarlet Lady ship — while the latter acronym usually means "work from home," the cruise line is advertising as "work from the helm.”

Related: Royal Caribbean shares a warning with passengers

"Inspired by Richard Branson's belief and track record that brilliant work is best paired with a hearty dose of fun, we're welcoming Sailors on board Scarlet Lady for a full month to help them achieve that perfect work-life balance," Virgin Voyages said in announcing its new promotion. "Take a vacation away from your monotonous work-from-home set up (sorry, but…not sorry) and start taking calls from your private balcony overlooking the Mediterranean sea."

A man looks through his phone while sitting in a hot tub on a cruise ship.

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This is how much it'll cost you to work from a cruise ship for a month

While the single most important feature for successful work at sea — WiFi — is already available for free on Virgin cruises, the new Scarlet Summer Season Pass includes a faster connection, a $10 daily coffee credit, access to a private rooftop, and other member-only areas as well as wash and fold laundry service that Virgin advertises as a perk that will allow one to concentrate on work

More Travel:

The pass starts at $9,990 for a two-guest cabin and is available for four monthlong cruises departing in June, July, August, and September — each departs from ports such as Barcelona, Marseille, and Palma de Mallorca and spends four weeks touring around the Mediterranean.

Longer cruises are becoming more common, here's why

The new pass is essentially a version of an upgraded cruise package with additional perks but is specifically tailored to those who plan on working from the ship as an opportunity to market to them.

"Stay connected to your work with the fastest at-sea internet in the biz when you want and log-off to let the exquisite landscape of the Mediterranean inspire you when you need," reads the promotional material for the pass.

Amid the rise of remote work post-pandemic, cruise lines have been seeing growing interest in longer journeys in which many of the passengers not just vacation in the traditional sense but work from a mobile office.

In 2023, Turkish cruise line operator Miray even started selling cabins on a three-year tour around the world but the endeavor hit the rocks after one of the engineers declared the MV Gemini ship the company planned to use for the journey "unseaworthy" and the cruise ship line dealt with a PR scandal that ultimately sank the project before it could take off.

While three years at sea would have set a record as the longest cruise journey on the market, companies such as Royal Caribbean  (RCL) (both with its namesake brand and its Celebrity Cruises line) have been offering increasingly long cruises that serve as many people’s temporary homes and cross through multiple continents.

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