WASHINGTON – As noted in my May 9 column, whether anyone likes it or not, both Mr Market and an increasing number of increasingly bored American workers under house arrest due to Covid-19 are starting to put America back in business again. And they’re fighting this Coronavirus Plague Year whether their autocratic, largely Blue State governators like it or not. Although the stock market may make a liar out of this column at Monday morning’s opening bell, the roughly 50% recovery of market averages from their spring crash lows tells us we’re in for a V-shaped recovery at best. Or a U-shaped recovery at worst. And big tech and home improvement stocks are leading the way.
Don’t let this Coronavirus Plague Year damage your investment portfolio
It’s in no one’s interest, save for the Pelosi-crats and the #NeverTrumpers, to let the current coronavirus inspired spring slog in markets and the economy to continue. If the nation had wanted another 4 years of Obamanomics, they’d have voted for Hillary Clinton in 2016. The way they needed to. Via the electoral vote. Not the New York-California heavy “popular” vote.
But instead, a significant majority of states voted for real hope and change. They voted for a businessman who knew how to build buildings and create plenty of decent jobs. They’ve seen what his way of doing business can do. And they want their America — the real America — back, no matter how much the sad-faced, inarticulate clowns on CNN wish otherwise.
As America slowly but surely gets back to work, all those pent-up, pre-coronavirus animal spirits are rising anew. They’ll try to Make America Great Again. And they’ll push to do it as soon as possible.
Putting our Coronavirus Plague Year portfolios on the Stairway to the Stars
So we now turn back to the stock market. It’s time to puzzle out the order of the ongoing recovery battle in the stock market. In other words, let’s look for the stocks that either are or shortly will begin mounting the most vigorous comebacks on Wall Street. That’s because these stocks and these companies are the ones that smacked-down American investors will want to get hold of before a renewed bull market, along with those very stocks, jointly depart the crowded comeback station.
In keeping with this notion, here’s what this columnist is either invested in already or tempted to buy during that inevitable next burst of red ink the Coronavirus Plague Year markets frequently hand to us. Remember: it’s always best to buy stocks when they’re down. Not after they’ve already taken a big ride into the stratosphere. Buy low and sell high, right?
Oh, and also remember: this column has always existed as a day-to-day and week-to-week trading diary. You might like what I’m gathering into my accounts or you might think these investments are foolish.
But what you shouldn’t think is that I’m making recommendations on what you should buy. What you invest in is up to you.
So if you like any ideas here, that’s great. But do your own research to get a second, third, or fourth opinion before you make a move. Just like you’d get a second opinion from another doctor if you didn’t trust the first opinion. I think my ideas are usually pretty good. But sometimes, they seriously aren’t. That’s called “risk.”
At any rate, here we go.
Leaving the station but still investible: Big Tech and home improvement giants to buy in the Coronavirus Plague Year
Some fortunate companies – and their shares – have proved relatively impervious to the coronavirus massacre for one reason or another. Here’s a short list with brief comments.
Amazon.com (trading symbol: AMZN) –
No kidding. They might lose money this coming quarter. But that’s because they’re taking advantage of the current crisis to boost their quality and the speed of their delivery service, even if you can’t see that right now.
And, lest we forget, Amazon is also a huge cloud-computing competitor. And Amazon’s cloud has been getting an awful lot of business from cabin fevered home gamers over the last 6 weeks or so. That habit may continue indefinitely, which will make a lot more money for Amazon and its shareholders. Shares are increasingly expensive right now. But on any violent or persistent pullback, this one could still be a great long-term buy.
I took profits in a modest position once. I’m back in now and hoping for a second run.
BTW, most think of Amazon as a Big Tech stock. But currently, it’s in the S&P 500 average as a Consumer Discretionary stock. It’s actually a bit of both.
Alphabet / Google (GOOGL and / or GOOG) –
I hate these guys. They’re obtrusive, invasive, and a bunch of left-wing partisan censors, like most of Silicon Valley. But, aside from an occasional weak quarter, they coin money because they exploit you and everyone else to death each time you float into and out of their search universe or “free” apps. When one invests in GOOG or GOOGL, one’s best approach is to leave personal likes, dislikes and partisan politics at the door. And then buy the shares of those tech pirates that are winning. Very big tech. Like Amazon. Like Google. To the extent you can banish personal feelings, you’ll generally end up a better investor. I hate Google. I just bought some shares. So it goes. It’s the way of all tech.
Apple (AAPL) –
I started using this big tech company’s products back around 1983-1983 when I purchased an old Apple II model. It was time for a Mac SE late in the 1980s. And, stretching a bit (like about $7,500.00 as I recall) I invested in one of Apple’s early LaserWriter printers. Which enabled me to open a freelance editing, writing and page layout business on the side.
$7,500.00 to gain the means of production. $7,500.00 to become a capitalist. What a concept. Hi tech productivity for the rest of us. It’s the sort of thing that builds customer loyalty.
A loyalty that persisted even after Steve Jobs’ boring, brainless successors nearly killed the company by trying to turn Macs into PCs, except that they cost a lot more money. Brilliant.
(The return of Steve Jobs)
Fortunately, Jobs returned at Apple’s low point. Older, wiser, yes, but still crazy enough to want to do something different. Which he certainly did. Which is why, today, at least at selected intervals, Apple is the most valuable company in the world.
They’re at a bit of a pause right now. They’ve refreshed all their computer offerings, including a just-available refresh of their 13-inch MacBook, sans the dreadful “butterfly keyboard.” And they’ve surprised everyone by offering a brand new (sort of) iPhone SE at a super-low price point. It boasts the current fastest iPhone microprocessor inside but saves money on an older model camera with less bells and whistles. That should hold the fort, which the company needs to do, given the largely coronavirus-caused delay in their next iPhone – their first to offer 5G compatibility.
Now all they have to do is get a chunk of their supply chain the hell out of China, and they’ll be ready to rock and roll again.
Of course, some stunning new product would help, too. But I don’t see where that would come from. Maybe they could hold a séance and get in contact with Steve Jobs.
I’ve been in and out of AAPL and am currently out and frustrated that I can’t get back in. I think it’s a bad idea to chase any stock and buy it too high, and Apple keeps getting away. But I do wish they’d have a bad week soon so I can get back on board again.
Facebook (FB) –
I dislike these big tech guys maybe even more than I hate the miscreants currently running Google. But what can you do about a company that grabs mass quantities of advertising revenue and re-sells all your personal info even though they claim they don’t? But they make money, and that’s what you need from a stock.
Facebook has even tried to make the company more cuddly and lovable lately by installing a totally neutral censorship board. We know they’re neutral because Facebook told us they were. To prove their point, the company staffed their neutral censorship board with members certified to be 100% Pure Left and reliable Trump haters as well. They include the brilliant legal eagle who trashed Trump during the House impeachment for naming his young son Baron. She felt it smacked of royal pretensions. Holy smokes. What’s not to love about an objective panel composed of people like this?
Yet apparently, Facebook can still afford to make tons of money even after dispatching their dwindling number of conservative users either to oblivion or to the newly constructed virtual guillotines they’ve built across the fruited plain. No latency in this plan. It’s happening in real time.
But again, they coin money. What can you do? Shrewd investing has its amoral elements. We all have to build our portfolios back up to MAGA greatness. And truth is, at least for now, Facebook shares will help.
Like Apple, I don’t own FB shares at this point and I’m not going to chase this company unless it decides to tank for a few days. That could happen if the Euro-globalists invent some kind of new boat-anchor tax that enables them to rent-seek at Facebook’s expense. BTW, S&P has put these guys into the new Communications sector. But FB is still big tech to us.
Home Depot (HD) –
Okay, now we leave big tech for the home improvement guys. A classic Coronavirus Plague Year play.
These people are always taking my money. And yours. As much as they can get. Fortunately or unfortunately, this writer owns two aging houses (and a few investment properties that are still underwater). Consequently, there is ALWAYS something to fix. (And a new roof is on tap for my primary digs later this month, just to prove the point.) All of which is why America’s two Home Improvement giants, Home Depot and Lowe’s, might look good in our portfolios.
Practically speaking, when I can save $$$ and do repairs myself, Home Depot usually gets the sale. Their local home improvement store is about a mile away and convenient as hell. What else can you do? The Home Depot dudes take money from the majority of American homeowners every month. Do they have some ex-IRS dudes working for them in the back office and showing them how this is done?
Meanwhile, what do you think has been happening at Home Depot during the coronavirus lockdown? Yep. With nothing else to do, furloughed and / or unemployed Americans across the country who still have a few bucks in the bank or just finally got a stimulus check will be off to Home Depot to get the stuff they need to finish projects they normally don’t have the time to finish. What a concept. That’s why Home Depot is an essential entity. Unlike you and me.
Home Depot provides yet another example (like Amazon) of a company whose business may actually be picking up while most other companies languish. Visions of closed door and dreams of Chapter 11 and 13 dance in other companies’ depressed heads.
Got some shares of HD a couple weeks ago, and we’re already way in the green this month on this position. Fingers crossed.
Lowe’s (LOW) –
Ditto everything I just said about Home Depot above. And yeah, I’m in this one, too. Home improvement rules in 2020, the official Coronavirus Plague Year.
In the small but intense home improvement universe, Lowe’s, alas, tends to be a serial underachiever, stock-wise. They watch find their earnings losing out to Home Depot. Or, as CNBC’s Jim Cramer calls it, Home Despot. But Lowe’s numbers have been better than usual lately. They’ve closed unproductive stores, and may finally become the competitor Home Depot probably needs so they don’t take all my money.
One thing LOW has on Home Depot that I see as an advantage: they offer in inventory a good bit more of the kind of home decorating products the lady of the house prefers to pick and choose. Home Depot is still a bit more trade oriented and caters in a major way to contractors. Good decision. But this makes HD more of a guy store. There’s a gender difference in shopping habits. (No lawsuits, please.) And Lowe’s addresses that difference better. Home improvement emporiums do continue to have differing focal points.
I’d buy more of both these stocks tomorrow. But once again, I wish they’d crash a bit. I hate to chase stocks. Every time I have, the bottom has fallen out and I’ve lost my derrière. There’s a lesson here somewhere.
More to come
More investing ideas to come. But most internet readers have already stopped reading this. So I’ll save some investing ideas for one or more additional articles TBD. Don’t miss the next thrilling episode.
And have a good week.