Fortune December/January 2021

EVERY YEAR in Fortune’s annual Investor’s Guide, we make a point of letting readers know how our previous year’s picks performed. Such disclosures have made us look good of late—the more than two dozen stocks and ETFs our investment team recommended in last December’s guide earned a median return of 20.6% since we published the list, edging past the S&P 500 over the same time period. Meanwhile, last year’s Future 50 port- folio, which we put together with our partner BCG, has trounced that bench- mark, returning nearly 71%. (To see our investment picks for 2021 as well as the latest edition of the Future 50, please see our stories beginning on page 46 and page 113.) But accountability should go beyond what we say, it must also apply to what…

THIS EDITED Q&A HAS BEEN CONDENSED FOR SPACE AND CLARITY. “The good thing for our business is that digital has been on afterburners. Everybody has embraced contactless commerce.” GUIDING CAPITALISM Ajay, you’ve had a remarkable tenure—Mastercard’s revenue is up an annualized 12.7% over the past decade. Profit has climbed 18.7% a year, and return on capital has soared at a 40% annual clip. 2 These numbers blow away the comparable stats for Visa and American Express. But your CEO playbook seems to start with an unconventional play—at least as far as Wall Street is concerned: Invest in your employees first. BANGA: I’m actually an old-fashioned believer in capitalism. It’s lifted a lot of people out of poverty. But what we need to do today is to reposition it for stakeholder capitalism—which is just capitalism…

BUSINESS. DISTILLED. Only in 2020 would CEOs welcome a new President who promises to raise their taxes, intensify business regulation, and massively empower labor unions. Yet Big Business is largely bullish on Joe Biden. Exactly what the President-elect will do, or can do, once he’s in office depends heavily on the makeup of the Senate. That won’t be determined until the runoff elections for both of Georgia’s seats on Jan. 5. But Biden has declared several specific actions he will take if he can. And after 50 years in public life, his instincts are clear. The one-sentence description of Biden’s economic inclinations is this: The middle class and working class should get more, and the wealthy should get less. He’s no socialist; for most of his political career he’s been near the center.…

EVERY YEAR in Fortune’s annual Investor’s Guide, we make a point of letting readers know how our previous year’s picks performed. Such disclosures have made us look good of late—the more than two dozen stocks and ETFs our investment team recommended in last December’s guide earned a median return of 20.6% since we published the list, edging past the S&P 500 over the same time period. Meanwhile, last year’s Future 50 port- folio, which we put together with our partner BCG, has trounced that bench- mark, returning nearly 71%. (To see our investment picks for 2021 as well as the latest edition of the Future 50, please see our stories beginning on page 46 and page 113.) But accountability should go beyond what we say, it must also apply to…

IF YOU THOUGHT 2020 WAS AN UNPREDICTABLE YEAR, you probably weren’t paying attention. For over a decade, epidemiologists have sounded the warning that a once-in-a-hundred-years pandemic could ravage the planet, and that even the most advanced nations were ill-prepared for the fallout. In 2021, we will face challenges both familiar and unforeseen—but we will also see shoots of rejuvenation as the world thaws from lockdown. Here are Fortune’s predictions of how the next year will play out. CRYSTAL BALL CONTRIBUTORS: MARIA ASPAN, LYDIA BELANGER, DANIEL BENTLEY, KATHERINE DUNN, ERIKA FRY, NICOLE GOODKIND, ROBERT HACKETT, BRETT HAENSEL, MATT HEIMER, ARIC JENKINS, JEREMY KAHN, RACHEL KING, REY MASHAYEKHI, GRADY MCGREGOR, JAKE METH, DAVID MEYER, MCKENNA MOORE, DAVID Z. MORRIS, SY MUKHERJEE, AARON PRESSMAN…

CORPORATE TAXES STAY LOW After November’s elections, many stock market prognosticators gleefully greeted the promise of a divided U.S. Congress. That’s because the markets tend to perform better when Capitol Hill is gridlocked, as that rules out disruptive policies that threaten to upend business as usual. In 2021, a likely GOP-controlled Senate, or even a fifty-fifty split, puts the kibosh on any Biden administration plans to reverse the Trump tax cuts; that should bode well for corporate profits, which are also primed for a major rebound when the pandemic wanes. CRUISES RUN AGROUND Several small cruise operators have gone under since the pandemic essentially shut down the industry in March (and turned some 3,500-person vacations into headline-grabbing superspreader events). The world’s largest cruise conglomerates—Carnival, Royal Caribbean, and Norwegian—have remained afloat by selling ships…