That’s certainly a possible narrative, and the one the government wants you to believe, but I think we’re going to have a harder time than that. Government loan programs notwithstanding, some companies will fail. Corporate credit is already very high relative to GDP. Saddling companies that are already carrying a lot of debt with even more isn’t a recipe for success. When some of these companies inevitably fail, they won’t be rehiring their workers. Demand will drop. Other companies will struggle, lay off workers, and so on. It could stay bad for a while.
Either ways it is definitely a huge2 headache for the government now. Even bill gates is trying to voice his opinion.
Scenario 1, reopen but infections go up again.
Scene 2 , reopen but infections remain the same - with masks, goggles , social distancing. Contact tracing.
Scene 3 , partial reopen with certain businesses remain closed to control spread.
Scene 4 , full reopen but isolate the vulnerables.
Yes that is the huge disconnect. Fed prints or even give money to people, but they wont go cinemas, wont eat at crowded places, wont go disneyland parks. What about malls ? Who is going to pay for rent, if all people need are takeouts, restaurants will downsize their models to takeouts. No point renting a huge dining space.
There will certainly be some that go under, but that happens anyway and this will maybe just hurry it along for some. Other companies with a better model or better management fill in the gap, just not immediately. The companies that have been selling what was warehoused will have warehouses to re-fill. This is work for the flexibly employed. Some will be unemployed short term, but really I think the unemployment claims are intentional. You la people off so that they can collect and then they come back to work once they can move freely again. There will be some pain, but not on the grand scale long term I think. That said, I don’t think the market bounces back to pre-Covid levels in 6 months, but it does come back. Most of the market gains the last 4 years are unrealistic optimism for no actual reason anyway. Expect that to continue and invest carefully.
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I hear you, but don’t agree with much of it.
I’ll continue to bet on DIS with innovation and it’s iconic nature. I feel strongly that as we come out of this, people will want to flock to parks more than ever. We are not a stay at home population. And I mean that for the world. We want to travel, experience, be entertained. DIS does it better than just about anyone, in a diversified manner. I’ll bet on DIS to be a $200 stock in less than 10 years. That’s 10% annual return.
I’m not going to go into each of the stocks I listed, but they all have significant strengths in their space. Some more than others.
I understand where you’re coming from though. There’s many uncertainties right now, along with general fear. I don’t understand exactly how all of this will play out in the short and medium term, but what I do know is stocks will continue to be the best long term return and will only continue to go up as the best companies innovate, grow and continue to distance themselves from their competition.
I’m a Sr Mgr for a S&P 500 company, and we are the best in the U.S. in our space. That’s not me being biased, it’s fact. I’ve worked for this particular company for 15 years, enough time to see it all, analyze, and understand what makes our business the best. As long as govt doesn’t completely socialize our corporations will always be the driver of the economy, and I mean that in a positive way. Stocks will forever go up. The leading corps will continue to grow and increase earnings. Some will come, some will go, some will weaken, some will strengthen. Our responsibility as informed investors is to be ahead of the base. Which I think is essentially what you’re explaining in your post. I’m with you on that.
Invest in the engine. Just make sure you pick the right engine! Or the S&P 500 long for solid returns.
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Yeah, I hear you too. I listed a bunch of stocks up thread that I bought. I have my reasons for buying them but some yahoo could come along and pick those choices apart with reasons I shouldn’t have.
Regarding Disney, I hope you’re right. I’m not a big fan of social distancing so I wouldn’t mind a rebound like you describe. I do think a continued era of social distancing is more likely but we will see. I bought SBUX and starbucks will suffer if I’m right so I’m not being completely consistent.
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Actually some have received them already.
Disney is a very2 popular company, parks only give 30 pct of their revenue. And once the covid is over , yes. Their disneyplus has reached 50 m subscribers.
However it is not a homerun company like the major rebounders, malls, restaurants, cruises, casinos.
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For anyone who shorts stocks, I think Costco is a good candidate. The share price of COST is up based on stock piling however, every week when I shop at my Costco there are less than half the normal shoppers. I think the idea that business is up due to stock piling will prove to be bad speculation. When Costco reports, they will report lower sales, revenue, profit, etc.
I don’t short stocks. I’m just putting this out there as an idea for people who do short stocks.
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Today was fun.
My portfolio of covid-struck stocks grew 8.2% while AAPL and a large portion of big tech took a step back.
I have a buddy that’s all big tech, and while I have a bit, I’ve moved mostly to calculated-risk stocks with real 3-5x opportunity. If I have a few BK’s, so what? He and I are having a heck of a lot of fun talking trash. He’s been kicking my ass, but I got his number today, and I really like my position as Covid-19 dies a slow death and the economy opens. My govt backed stocks are going to rise like a Phoenix from the ashes.
I’ll be 3-5x long on 8 different stocks that have historically paid a helluva dividend.
Boeing LONG!
I like my chances!
This is a very interesting time for the markets. Some will do real well, but all invested will do well as part of the long game.
Happy investing, and good luck!
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Holy mother of god.
Western Canadian Select went negative today. That is, producers had to pay to get rid of it.
Chart is WTC
May crude trades for $1.03.
Sweet baby Jesus.
CME is prepared for it to go negative.
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If these stocks/equities are basically as low as they can go, why arent people buying with intention to hold for a few years? I mean, it doesn’t seem like the risk is all that crazy here long term (5-10 yrs) but the returns would be in the thousands of percent. Kinda like if scratcher lotto tickets suddenly had Powerball payouts with scratch off odds.
I’m obviously missing a (number of) huge plot points here. Fill me in.
CME May Crude - $7.50 low.
Yes, negative $7.50. The sellers have to pay the buyers $7.50/bbl to accept the product.
Negative $39.55.
“I’ll pay you $40 to take this barrel of oil from me.”
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Utter rubbish, most likely. But who knows, certainly not you or me. It’s unpredictable but ultimately the market is still way overvalued. I know which side of the coin I’d rather be.
What?
If you buy the S&P today, it will be worth more in 20 years providing a normal economy, which is the majority of the time.
Oil is crazy though. Still, I think you buy the big boys long term. They’ll be forced to cut production further, lot of short and intermediate term pain.
The dollar in your pocket is worth less now, by about 3%, than a month ago. Dubya started cranking the printing presses to fight terrorism, Obama went further and now they are cranked up again. Each time your dollar is worth less. In 20 years…,?
Get your Shiff on brother.
Sky is not falling. Stocks will appreciate over time, with peaks and valleys.
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