Thought experiment: What stocks will go up in response to the coronavirus plague?
One idea: Comcast and similar cable TV stocks. If people are stuck at home they won’t mind paying for premium channels and will be less likely to cut the cord.
Second idea: airlines and hotel stocks. “Buy on bad news” is the theory here.
Readers: better ideas?
Oil ETFs? No one’s moving to solar/wind/nuclear etc in any significant way anytime soon. Once we’ve cleaned up the victims, oil demand should come roaring back, shouldn’t it?
As long as the government has an inflation index which always shows 0, it’s going to keep inflating asset prices to infinity to refinance its debt. The government issued $120 billion in new microdollars yesterday to combat a day long fluctuation in the stock market, which makes lions think they’re more interested in using news headlines to refinance their debt than averting a crisis.
We all know this week’s news cycle is going to be forgotten next week, coronavirus is already past its peak, & the world isn’t going to collapse because some people worked from home. A virus is not a plague. The plague was a bacteria.
My grandfather (whose savings put me through college and did some of buying my condo and are supporting some of my retirement) believed that you should buy telephone stocks. He though that no matter how bad things were, people would still want to call each other up and complain about it.
Phone calls are a mere app nowadays, and profit margins are tending towards zero. Just look up AT&T’s debt load if you don’t believe me.
I purchased a handful of long dated, deep OTM call options on Gamestop…
They were super cheap, and with
100% of the float sold short, a small operating profit would likely cause a dramatic spike in the stocks price.
I like it.
Wall Street is short oil and long tech.
1. Sell end-of-the-world insurance.
2. Skip town before the apocalypse comes.
Speaking of disaster preparedness… what are general aviators doing to prepare in case the sh*t really hits the fan? Are you keeping your plane fuel tanks full and getting preventive maintenance done? Is your packing list different from someone in a car? Are you already setting up remote supply stashes?
Cheers!
Where are you going to fly to? Unless you have a stocked second home you are better off not flying away. Even then staying near the neighbors you know best is probably the wisest choice.
If you are the adventure type flying around in a gyroplane post apocalypse can lead to meeting interesting people.
You could invest in an index fund of Japanese pharma companies, as the anti-cancer drug Camostat (authorized for use in Japan) has been shown to dramatically reduce nCov-2019’s infection of lungs.
Roche has the worldwide rights.
I am thinking about buying carnival cruise stock. What does everyone else think?
Good: XOM.
Bad: cruise lines, airlines, consumer debt originators and anyone in consumer debt securitization chain. Hourly wage loss in service industries is empirically real and is reducing credit quality and debtor ability to service outstanding debt. Also see RCII, AAN, CVNA, CONN
Very Bad: Aircraft manufacturers (BA, EADSY). A metric ton of gently used A32x’s and 737s will come on the market this summer either for lease or as bank owned assets after failure of a number of budget carriers. (see budget traveler, ability to service vacation debt, supra.)
Watching and waiting: LW (french fries), PNTG (elder care). Hard to screw up businesses with competent management. Never been cheap. Maybe soon.
I like XOM too, people forget, MSFT went sideways around $22 for fourteen years.
XOM could be like big tobacco in the sense that they sell less but make more, similar to fewer smokers but raised prices on cigs from the 70’s to 00’s
Also VLO, if we ever get infrastructure spending, going to need a lot of diesel to build.
Other than that, not a commodity fan, seven years of brutality and if you are lucky you get three months of great prices, but need to time it perfectly-too hard for me.
We will probably test the lows, probably make new lows, lots of volatility, but this thing is going to go up like 2500 points in one day when it goes, massive short covering and buyers jumping in.
Companies that provide goods useful to new parents (baby food, clothing, diapers etc) should see an uptick in sales in about 9-10 months.