A Look at the Next Decade in Tech Stocks

In this episode of Industry Focus: Tech, host Dylan Lewis and Motley Fool contributor Brian Feroldi kick off 2021 with their favorite tech stocks for the upcoming year (but really, decade) and take a look back at 2020 -- the biggest winners, regrets, and the lessons from the past year. Find out more about these companies' growth opportunities, their valuation and more.

To catch full episodes of all The Motley Fool's free podcasts, check out our podcast center. To get started investing, check out our quick-start guide to investing in stocks. A full transcript follows the video.

This video was recorded on Jan. 8, 2021.

Dylan Lewis: It's Friday, Jan. 8, and we are talking about the top tech stocks for 2021. I'm your host, Dylan Lewis, and I'm joined by fool.com's tenacious, trusted, treasure trove of tip top tongue-twister titles, Brian Feroldi. Brian, how are you doing?

Brian Feroldi: Dylan, you're starting off the new year with nailing my title yet again, but it is good to see you, my friend.

Lewis: Well, I had some encouragement. I was delighted to get the Feroldi family holiday card over the course of December and that just reminded me I've got to stay on top of my game. We took a couple of weeks off there, but I'm not sleeping. I'm still doing my tongue-twisters even if we're not airing.

Feroldi: It is going to be, I think, three weeks since we had a Friday where we could do Industry Focus, so awesome to be back.

Lewis: In some ways, it was nice to get the break but I've got to say, I'm ready. We've been planning, we've got a killer show, I'm really excited. We are going to be talking about the top tech stocks for us for 2021 in terms of what we see out there, and what we're interested in, and put some money behind. We're also going to be talking a little bit about the year that was with 2020 in both our biggest winners and some of our biggest regrets. Loved this, though. We've had a week of people from Industry Focus pitching their top tech shares. We're giving people a nice, well-rounded basket of stocks for 2021, all the sectors represented, Brian.

Feroldi: I think it's a great idea and of course, we couldn't finish out this week without talking about some tech stocks, because tech was, once again, the sector to be in in 2020.

Lewis: It was. I don't know about you, I'm someone that is heavily, heavily overweight tech. I figure, you know what, I'm a little bit more balanced when it comes to the stuff in my 401(k) and some of my retirement accounts. My personal brokerage account, I can be a little bit more focused. I can invest individually in stocks that I follow and understand more, and take a little bit more risks. Because of that, my portfolio did pretty well in 2020. Brian, how about you?

Feroldi: I'm not a big believer that you have to own stocks from every sector. My personal strategy is to own as many awesome companies as I can and as few terrible ones that I can. There's a lot of awesome tech stock, so I, like you, I'm very exposed to the sector.

Lewis: I think owning a few terrible companies is possible. It's just a great mission statement here for your portfolio.

Feroldi: Easier said than done.

Lewis: But that's the beauty of being an individual stock picker, because you get to choose. In my case, because of being over way tech, and because the beauty of the Fool community and the Fool universe, had a lot of really great winners myself in 2020; to give a couple names and some shine there, DocuSign, MercadoLibre, Square, all multibagger of years for me. I think businesses across the board that saw really big step changes in trends that we're already going to be benefiting them. And boom, just to the next level, adoption skyrocketed. I know the same. It's probably true for stuff you are on, Brian.

Feroldi: That's exactly what we saw in 2020. If you had a positive trend in your favor prior to 2020, the odds are pretty good, it got sped up and your stock price went above bananas. If you had a headwind in 2020, the odds are pretty good that your stock got smashed. Since I tend to invest in companies that I think can grow for a long period of time, I had a lot of winners in my portfolio. For me, my absolute biggest winner, it wasn't even close, it was Tesla (TSLA 1.77%). I've been invested in Tesla since 2013 or 2012, a long time, and I've added along the way. Tesla putting up a 734% return in 2020, that's certainly boosted my portfolio.

Lewis: Brian, we've talked about it on the show before, but there are folks out there that are listening, that are Tesla shareholders, and they're happy right alongside you. There are probably some people that feel like they miss the boat. I can represent that side of things when it comes to Tesla. I think I had a basis of about 200 pre-split and around the private takeout point had hit my limit and wound up selling. It's hard to look at those gains and say, "Man, the opportunity costs and what I wanted to do with that money instead." But if I'm being honest, I think if I had held on, I would've been right for the wrong reason. I don't think it would've been aligned with what I saw happening. It's a regret in a way, but I think ultimately, I was true to what I wanted there.

Feroldi: That's perfectly fine. You don't have to own every big winner to do well, and there are lots of companies that you just shouldn't own. If there's any company in the universe that is easy to have a wrong opinion on, it is Tesla. Yes, no shame in selling or taking a pass on Tesla altogether.

Lewis: I like your philosophy there, not having to own all of them. Because you take that step back and you look at your overall portfolio performance. If you're outperforming the S&P 500, you're beating most people. If you could take that step back and see great returns, and thankfully, I was in that position for 2020, then it makes it a little easier to swallow some of those huge winners that you don't have a ticket to. But the reality is there are a lot of really great winners in the Fool universe, and I'm lucky enough to own several of them.

Feroldi: I think you said something that's really worth double-clicking on. How did your portfolio do versus whatever benchmark you are measuring? Whatever you would be invested in if you weren't stock picking. Stock picking is wonderful, it's super fun, it's highly engaging, but if you are stock picking and you are not outperforming indexes over lengthy periods of time, you're doing extra work to be less wealthy. So, make sure you measure your returns against a benchmark.

Lewis: Yeah, and I will say, if you're using the S&P 500, use the total return. There are some people that just look at the price return. Look at the total return, don't slight yourself there. Make sure that you're holding yourself accountable because there will be an extra 1% or 2% there, because of the dividends being reinvested.

Feroldi: That's a good point though.

Lewis: I dared my soul a little bit with Tesla, Brian. When it comes to the past year, what do you personally have a regret with when you look at your portfolio or some of the decisions that you made?

Feroldi: It's really easy to look backwards in time and play the "woulda, shoulda, coulda" game. It's not that hard to look back and say, "Wow, Wayfair is like a 20-bagger off of its low. I really should have put all my money into Wayfair in March; because of course, it wasn't going to disappear. Of course, home furnishing was going to take off immediately after that." That's not a very useful exercise because would you have made that decision in real-time with the information that you had at the time? I don't like to look backwards and say, "I did this wrong. I did that wrong." I think it's OK to look back, see what happened, and see if you can learn the lessons from them that you can apply forward. But I don't really have any big regrets. But for the sake of saying something, I do remember the day that Pinterest (PINS 1.28%) hit $10 per share, and I said, "That makes no sense." That price makes no sense. This is a very high-quality business, I think it can grow for a long period of time. That was pretty much the low. When I said that to myself, I should've been quiet about it on Motley Fool Live and bought like crazy.

Lewis: That's one of the things of what we do. Because we talked about businesses so often, we have our trading rules in place here at The Fool that can occasionally lock us out from buying something that we might be very, very interested in doing. But it's important. We think that that's a really valuable element of what we do here. I will say, Brian, I went through that Fool arc of having a couple winners that I missed out on, and had the teachable moment for myself from it. I think what's hard and maybe what might be helpful for listeners is, we talk all the time about getting skin in the game on something that you want to own. Even as someone who says it a lot, I still don't always manage to do it. There are two businesses in particular with 2020. One of them, Datadog and another one's Zoom, where I remember doing the S-1 shows on those companies. I remember loving everything about them. They were just compelling, best-in-class companies, great retention rates, checked all the boxes, the valuation spooked me. Ultimately, that's what scared me off from getting a start-up position. I think my teachable moment for myself with 2020 is particularly if it's at first position. Just take a small bite; I say it all the time, but just take a small bite. The difference between having sold your brokerage account and tracking it, and not having it is huge in terms of how much you pay attention to it.

Feroldi: I think that's a wonderful lesson, but that is an incredibly hard lesson to internalize. If you like everything but the price is just insane, it's awfully hard to buy if you have any valuation vent at all. For example, what about Snowflake today? Seems like a really great business, will you pay 200 times sales for a company that's worth $100 billion plus? Boy, is that really hard to do. The good news is, if you really like Zoom, that stock has been falling drastically, so you might have another chance, Dylan.

Lewis: Hey, you never know when the discounts are going to come. Things go on sale when you don't expect them to.

Feroldi: That's right. But I do like the general point that you're making. If a company checks a lot of boxes for you, just get a little bit of skin in the game to put it on your radar and hope that the price declines, you can add your positioning over time.

Lewis: I think the reason I'm harping on that a little bit for myself is you have your watch list, and in my case, it's a physical list, sometimes it's a digital list in a Google Drive folder or something like that. But I tend to revisit that list when I have cash, just as a matter of the investing process. What I noticed is I'm far more in tune with what I own. I want to check my brokerage company pretty much daily. It's a lot easier for me to spot opportunities in stuff that I own or see success in stuff that I own, just because I'm regularly in the routine of checking that. I'm not so frequently checking my watch list and updating it, which is another lesson, I think, for me. If you're only putting a small amount of money toward it, there's nothing wrong with really liking everything and then being like, you know what? It's got to grow into this valuation. But as we saw, the stuff changes can happen, Brian, and then the valuation could start making a lot more sense.

Feroldi: It's very, very difficult to do that with you, Dylan. Yes, I have made that mistake and I can guarantee I will make that mistake constantly for the rest of my investing career.

Lewis: Listeners, you'll hear us doing this show on Snowflake in exactly one years' time. Brian, you talked about your regret being Pinterest. I feel like that's a half regret because as it turns out, you did wind up having a position in the stock. If I'm not mistaken, it's your stock for 2021?

Feroldi: That is correct. When I looked at my portfolio, I was like, what stock has done really well that I think is going to be permanently benefited because of COVID? I just came back to Pinterest. While the stock has done extremely well in 2020, I still think the growth story here is just getting started. When I look back at the most recent numbers we have to work off, it is the third quarter. Pinterest reported 37% growth in users and this is at a pretty decent scale. They're at 442 million users with the bulk of that growth coming in international markets. So, about two-thirds or three-quarters of their users are in international markets. Pinterest said that they're seeing particular growth from users under age 25. That's really attractive to me, because that is where advertisers want to put their dollars behind and overtime, the purchasing power of that cohort will certainly grow.

Beyond just the growing user numbers, which I think were boosted heavily from COVID, Pinterest also rolled out a number of tools during the year that are really going to make its platform much more attractive for advertisers as well as for posters. They made a big push into video. My wife is a heavy Pinterest user and she absolutely says, "I've seen tons more videos on the sites than I ever have before." They also launched an automatic bidding future for advertisers, they launched this product in July. In the third quarter, it already represented half of the company's conversion revenue. Talk about success with a product that easy. It's clear that those tools are very, very useful for advertisers.

The reason I'm so bullish on Pinterest easing from up here though has to do with ARPU, average revenue per user. Pinterest is so early in its monetization efforts. In the third quarter, it pulled in on average $1.03 off of the average user on its platform. For comparison, Facebook in the same period, $7.90. Facebook is pulling in more than seven times the revenue per user. Now, Facebook has been monetizing for much longer, it has a lot more data. But I think that the drumbeat away from Facebook and Twitter, is just going to get louder and louder, and Pinterest doesn't have to deal with any of those problems. I think, between the growing user base, as well as the company's continued monetization efforts, the next +10 years, we'll see double-digit growth for this company.

Lewis: Yeah, I think that ARPU comparison is probably one of the most succinct and compelling thesis you can have on a company. If you think Pinterest is going to ultimately grow to match the worst most prevalent social media company, that means that they still have a 2.5X on their current ARPU. Right?

Feroldi: Exactly. As they roll out the tools, to me, the big thing is that they're not plagued with any of the negativity that many other platforms are. I've seen the power of the platform in real-time, where my wife goes on, she looks at some image she's liked and she is like, what about this, and it's like, OK yeah, that makes sense for our life, let's buy that thing. I think that a lot of users are going to do that exact same journey.

Lewis: Yeah, I'm interested in that growth in the age under-25 element, Brian, because I think that that's a little bit of like a narrative shifting data point for a platform like Pinterest. When we talk about accessing the -- I guess, is that Gen-Z, sub-25? Is that the market we're talking about?

Feroldi: Sure, you've sold me. It's Gen-Z.

Lewis: People under 25. We're going to leave it at that, so I don't step at it and say something that's the wrong label. But for that market, typically we're talking about Instagram, and for a long time, it was Snapchat as the go-to way for advertisers to access that market. If they're able to really build themselves as someone that can offer advertisers access there, that's another major selling point for them as they go out to advertisers.

Feroldi: I think that's completely right. And again, why do people go to Pinterest? Back it up. Why do people go to Facebook? People go to Facebook to connect with and see photos of their friends and family. Why do people go to Twitter? To communicate with each other. Why do people go to Pinterest? To see images that will inspire them to do something in their life. Of those three, I think that Pinterest is the most natural place to go for advertising. They called this outright in their S-1. Advertisements do not compete with native content, advertising is the native content. Not only do I think that there's room for Pinterest to grow its ARPU, to match Facebook overtime, it would not shock me if in time they eclipse Facebook.

Lewis: Yeah. Advertisements that naturally fit into native content is basically the advertiser's dream. We see that in written content, in video content all the time. I think that the closer and closer you can get to that in the way that it doesn't feel intrusive on the consuming experience, the better. The other thing, and listeners may be able to figure this out by now, I don't own Pinterest, but it is basically in the top three on my "2020, Dylan, get a stake in this company" list. One of the other things that is just so compelling to me is the automatic bidding process because that gives you scale. That is one of those things that if you are running a platform, you need advertisers to be able to participate at scale,and then you see numbers start really taking off. The fact that they are early on in that means that these numbers are probably going to start getting big pretty quickly in the following years.

Feroldi: Let's remember, last quarter revenue growth, 58%, gross margin expanded 400 basis points to 75%, so that's almost 60% top-line growth combined with a gross margin of 75%. They have crossed into the profitability on an adjusted basis, they have tons of stock-based compensation, which is dragging them down. But even though the stock has gone up a lot in 2020, the valuation to me is not insane. It's high, but it's not insane. 29 times sales. But more importantly, because they're now focused on producing non-GAAP earnings, they're trading at less than 100 times next year's earnings estimates. That's a high number, very high number, but given that I think that there is operating leverage ahead, and there's huge room for them to grow their top-line. I don't think it's crazy.

Lewis: I think it's helpful to take that valuation and not just look at it as a multiple on earnings or sales, but look at it overall and how it stacks up to some other social media companies. We're talking about a business that's worth just over $40 billion. For a social media business, a digitally scalable business, that is not that big. It really isn't. When you factor in the ad load coming, them getting better and better about bringing advertisers in, there's a lot to like and it's not very hard to see this business being multiples bigger five years from now.

Feroldi: To your point, Facebook is worth $755 billion and I still think that number is going to go up too, by the way. I could very easily see Facebook being a $1 trillion company someday. So yes, I don't think Pinterest will ever match Facebook's size and scale, but is there room for it to grow between $40 billion and $800 billion? I think so.

Lewis: Yeah, I think them being a $100+ billion company in five-years is not hard to forecast. If everything goes according to plan and the thesis plays out, that's a relatively easy thing to see. That's what we like, right, Brian? We like easy, we don't like hard.

Feroldi: I look forward to you joining me as a shareholder, Dylan.

Lewis: I will let you know when it happens. For me, for my top stock, I have two, because I don't want to short change folks. I did wind up pitching a business when we did our all host round table that aired on December 23rd. To give people a quick recap on that. Beautifully, Brian, this is a company that you are familiar with, so we can kick this one around a little bit. But for folks that listened to that episode you heard me talk about Axon (AXON 2.51%). I think that was my stock basically for the next year. But I think just in general, wonderful business. For the folks that are not super familiar, it's the company that's formerly known as TASER, they rebranded to reflect the fact that they are focused on their Axon body cameras and the Evidence.com cloud storage business. The short thesis here is basically that they supply body cameras that you see law enforcement wearing, and when it comes to that market, Brian, they are basically the only game in town. They're the only ones there.

Feroldi: That's correct. They have as strong a competitive position as you can have in a market. I believe they got there and the body camera by both organically and through acquisition, if memory serves.

Lewis: I think that's right, yeah. You're getting to the deeper sensors in my brain there. But really, this went from being something that was a tiny portion of their business, and really something that had to play out over time to what we have seen become a very large contributor to revenue. What I like is we've seen the thesis materialize. Axon cloud grew 40% in 2019, the sensors grew 60% in 2019. Management sees margin expansion across the board in all of its major segments. I think the body camera and the cloud storage is only going to become a larger part of this company going forward. From the investing side, that's high-margin revenue on the cloud side. These are recurring revenue cycles for them. They have customers that are going to be locked in for a long time, and they're the only player in this space, which you love. You love to see that. I think importantly, Brian, for me with this one, it's a really easy company to get behind. I'm going to highlight three points from the mission slide of their most recent earnings presentation. One, obsolete the bullet. Two, reduce social conflict. Three, enable a fair and effective justice system. Really, when I look at a company like Axon, what they're trying to do, they're trying to save lives, carry out more fair and equitable justice, and they are trying to add accountability and provide an unbiased record of what happens when things happen. I think as long as it's good for civilians, it's good for law enforcement. It's just a win-win all around.

Feroldi: I like to look at the softer side of investing things, and Axon here is one of Brian Stoffel's biggest holdings and investments. One of the reasons why is because it probably has the best mission statement I've ever heard, which is to protect life. Three words, ridiculously inspirational, very simple, and that is what the company is hyper-focused on. Now, that's all great and I do like to chat about the body camera business. To me, what makes it such a compelling investment is the software. The software that underpins it all, and how much emphasis that they are putting on getting that software into police offices. Once the software is in there, and it works seamlessly with the hardware that goes in there, that creates a product ecosystem that, to me, just reminds me of Apple. It's no stretch I think to call this company, the Apple of law enforcement.

Lewis: Yeah. The reason I wanted to pitch one Brian, is I think there are probably a lot of folks out there that look at the tax base and are really scared of some of the valuations that they're seeing right now. There are a variety of reasons why the multiples have been expanded for a lot of these companies. We're seeing SaaS companies that have recurring revenue, very high-margin revenue coming in, and we're trying to figure out how to value them. But also, there's really not a lot of money to be made in putting money into debt. There's a lot of money going into the stock market, a lot of money going into real estate. I look at this company and I say, there are a lot of elements of it that are exactly what you want in a tech business. You have high-margin revenue coming in, it's really sticky. What I really like in their case though, is this is something that law enforcement needs to have. They are basically installed with who they already have relationships with. They're not going anywhere, and they're only really going to be adding customers. I don't see this going away. Really, no matter what happens, it's I think it's the new normal. That's good for a lot of people. But I think on the investing side, it means that yes, there are elements of this that are tech, but this is a much more stable tech investment than a lot of things we normally talk about on the show.

Feroldi: Yep, I think margins are going to grow too as their software offering gets out there and becomes more popular. This is a company that purposely was profitable, and then went backwards as it invested aggressively to both develop its software capabilities and get them out there into police offices for, I think, free for the first year or something like that. They knew that once police offices gave this product a try that they were going to become heavily reliant on it. It's a strategy that I think over the next five years will produce huge growth in earnings.

Lewis: Since I pitched that one already, Brian, I want to give some folks that are listening something new as well. I feel like it's only fair. I will add another one, and we're talking up our own book here Brian, because you own Pinterest. I will be a shareholder when I'm able to be a shareholder, I already own Axon, and this third company I'm going to name, I own, I believe you might own it as well, and that is MercadoLibre (MELI 2.46%). We talked about it briefly before being a huge winner in 2020. It has been a huge winner, basically, no matter how far back you look, I don't see that ending anytime soon.

Feroldi: Tesla is my No. 1 holding. My No. 2 holding, Dylan, is MercadoLibre, if that gives you [laughs] any sense of what I think about the long-term potential of the business.

Lewis: Yeah. It's my largest holding. Some of that is me putting the money behind it, but a huge chunk of that is really just the share price appreciation, the fact that the business has continued to execute. There are a few companies that I think benefit from as many mega trends as MercadoLibre does. It is so squarely positioned behind e-commerce, digital payments, fintech, and that space is absolutely exploding. I think what is particularly incredible about this business is they operate in fragmented markets in South America, that insulates them a lot from competitive pressure. What we're seeing with them, when we talk a little bit of Mercado Pago, their payment solution, is they've created things that are being used within their ecosystem, but they have also made the leap to being used off of their ecosystem and have basically become the way that people transact without traditional financial systems.

Feroldi: To me, MercadoLibre is a case study in the power of optionality. When I first became aware of this business, it was pretty much the eBay of Latin America and that's it. You could make a very compelling argument today that this company is the PayPal of Latin America with an eBay ticker to it. Not only that, but they have invested heavily in the logistics side of their platform and they are even getting into the asset management business. This company has proven itself to be incredibly innovative to roll out new products and services and it is winning everywhere that it goes.

Lewis: I think even calling it the PayPal, you're selling it short, Brian. It's basically, you take eBay, you take Amazon, you take PayPal, throw Square in there. There are so many different services that it is able to bundle up in a really effective way. That, to me, is just a very easy investing case. We've seen this model work. We're seeing it now being applied to a different market, and we talked a little bit before about the businesses that 2020 created step changes for. The numbers for this company got huge in 2020, just put a couple of numbers to do that: in Q3 of 2019, companies saw year-over-year gross merchandise volume of $3.6 billion, which was a 21.6% increase in U.S. dollars, 37% increase if you're neutral on foreign exchange. Q3 of 2020, a year later, gross merchandise volume almost $6 billion, an increase of 62% in U.S. dollars and 117% on an FX neutral basis. Items sold over 200 million for the most recent quarter that we have data on, double what it was a year ago. It doesn't really matter what core business metric you look at, everything went off in 2020. I look at this and I say it's a business that was already experiencing adoption, Brian. I think those are people who are probably going to be here to stay.

Feroldi: Well, I would have to agree with you there. If you want to go really exciting, despite this company being one of the biggest winners in the market over the last 10 years and having been a monster, I think multi-hundred bagger, since coming public, it's an $84 billion business. It hasn't even crossed the $100 billion mark. Again, with companies like Amazon, well over $1 trillion, I think there's upside here too.

Lewis: Yeah. I look at this and I say, it's easy. It's really easy to see this company being much bigger in three years, five years, 10 years. I don't see a lot that's going to disrupt the thesis. It's nice to be able to have short parts, Brian. That's what we're looking for here.

Feroldi: That's right. Now, the valuation is pretty darn high. It wouldn't surprise me if the stock traded sideways for a couple of years while the fundamentals caught up to the valuation. But like you, I think five years from now, 10 years from now, this company will be bigger.

Lewis: Yeah. The necessary caveat, I always have to add this when we talk about MercadoLibre, I mentioned before, they do business in fragment markets, they're in I think over a dozen countries in South America. They have to take results that are reported in a bunch of different currencies and then basically repatriate them, state them in U.S. dollars, and because of that, a lot of crazy things can happen with currency swings and what that actually reflects in their financials. If you're looking at things on a U.S. dollar reported basis, there are going to be some weird times, particularly as there is some volatility in some of the markets they operate in. This is a business where you have to look, I think, at the key business metrics and really follow those to get a sense of what is going on. As long as those continue to post insane growth, which they have, I am going to be a long-term ball on this business.

Feroldi: The interesting thing there, Dylan, is the currency movements have worked against this company heavily for as long as I've been following them, at least five years. Currencies tend to ebb and flow, and there might be a day when currency movements actually work in this company's favor. Imagine what it could do if currency all of a sudden became a reason to own this stock.

Lewis: Yeah. You talked about the last five years, Brian. In that period, it's been a 15%, 100% winner. Something roughly in that neighborhood. Despite operating in a very tough economic environment during that period, it has proven to be a very strong business. It's my largest holdings, it's one of Brian's largest holdings. I know a lot of Fools are huge fans. But I know a lot of the names we threw out here, Brian, are ones that are very popular in the Fool universe. I think if you looked around, if we were at HQ, rather than doing this virtually, you would find a lot of fans for all of these businesses.

Feroldi: Importantly, the biggest lesson I've learned in investing is that winners keep on winning. All the companies that we've talked about thus far have been winners and I would personally bet that all of them are going to keep on winning.

Lewis: Yeah. That's a great way to end this on, Brian, because I'm sure a lot of folks look at the stock price charts for these companies and say, oh, come on, you're telling me to pick up shares of this thing? Yeah, I've said that pretty much every time I've bought back into Axon and MercadoLibre. I'm sure in three or five years from now, I'll be saying that when I buy back into Pinterest, again. [laughs]

Feroldi: Enough, Dylan. Yes, it is extremely mentally difficult to buy something like Pinterest. Pinterest is $70 today. As I said, nine months ago, this company was trading at $10. I said, wow, that just makes no sense. It's incredibly hard to say, "I'm going to buy this thing at $70 today, but I could have bought nine months ago at $10." But you have to be willing to do that if you want to buy into the best growth stocks.

Lewis: It's part of the mindset when it comes to investing, it's just what you have to suffer through. But when you look at the returns, it makes it worth the anguish, I think.

Feroldi: I think that's right, Dylan.

Lewis: Just quickly to recap our tech stocks for 2021. We got Pinterest, we have Axon, we have MercadoLibre. I think we can say collectively, we have a high degree of conviction in all three of those, just based on the fact that we've got skin in the game on two out of three, soon to be three out of three for both of us.

Feroldi: I own all three, Dylan, so you can catch up anytime you would like.

Lewis: I was saying "we," Brian. I was saying "we." [laughs] Because this is a theme week, I just want to quickly recap what we had earlier in the week. Matt Frankel pitched Wells Fargo on Monday. On the Consumer Goods show on Tuesday, Asit Sharma pitched Sleep Number, and Emily Flippen pitched Airbnb. On Wildcard Wednesday, we had Brendan Matthews with Workday, and Jason Moser with Masimo, and then Energy, oh my gosh, these guys went crazy. We had Jason Hall pitching Brookfield Infrastructure Partners, you can tell I don't say that name a lot, BIP, and Nick Sciple pitching Berkshire Hathaway and NV5 and Texas Pacific Land. A lot of names there, Brian. I think that's going to be a fun basket to track in 2021.

Feroldi: That's a motley group of stocks and we would have no other way, right?

Lewis: Absolutely. That's the beauty of the show because we talk about every sector of the stock market, get a little exposure to everything. Brian, so great to be back with you. Happy to be in 2021, happy to be back on the podcasts routine.

Feroldi: I'm thrilled to be here, Dylan.

Lewis: Thanks for joining me.

Feroldi: You too, buddy.

Lewis: Listeners, that's going to do it for this episode of Industry Focus. If you have any questions or you want to reach out and say, "Hey", shoot us an email at [email protected], or you can tweet us @MFindustryfocus. If you want to look for more of our stuff, subscribe on iTunes or wherever you get your podcast.

As always, people on the program may own companies discussed on the show and The Motley Fool may have formal recommendations for or against the stocks mentioned, so don't buy or sell anything based solely on what you hear. Thanks to Tim Sparks for all his work behind the glass today, and thank you for listening. Until next time, Fool on!