Die-hard investors never take their eyes off the ball and are always looking for opportunities. The unlikeliest of events can lead to stock pick opportunities. Take the case of the Covid-19 vaccine. The average investor will focus on the direct pharmaceutical stocks, while the more experienced investors look much broader for opportunities.
Smart investors need to think of what went through your head when after the majority of America is vaccinated and can move on with our lives. Great investors like Warren Buffet look long-term and try to focus on what people will be doing in 2022.
This doesn’t mean ignoring the effects of the virus. An example would be the huge number of people and businesses that haven’t paid rent which will crush many real estate stocks and REITs. Avoid or wait to buy areas until they are recovering.
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Fast forward to the summer of 2021 (assuming aliens haven’t landed), wouldn’t you like to go somewhere? See people face to face? Maybe hug and kiss them? Go on a holiday? Just get out?
Food Delivery Rethought
It’s that feeling of liberation. Of being able to do, once more, as one pleases. Will you still want to sit at home and eat a delivered meal? Would you not like to step out, sit in a restaurant, be served, breathe in the fresh air?
Delivery is a losing proposition for most restaurants. Remember that delivery companies have got good business from restaurants because of restrictions placed by Covid-19, not because it is profitable. Most of the delivery companies charge huge fees to be included on their systems causing the restaurants to dump them as quickly as they signed up.
What does that mean?
If Uber (UBER) and Doordash (DASH) were your choices for their great delivery systems, the strategy may need some updating. Uber might still be able to justify its pricing because of its transportation system which is likely to witness increasing usage. Of course, keep in mind that they are losing a fortune every day. The only money-making game in town is driverless taxis which we know are still some time away.
If it is deliveries that is your bet, Domino’s (DBZ) might be a better buy, as they have invested heavily in technology to make money on their core offering, the pizza.
Looking Forward To A Vaccine World
What else? See the world? Of course, many have lost jobs and many others have seen their businesses collapsing. But equally, for people who have jobs, spending opportunities have been few. And some businesses have prospered.
With the money saved up, what will you do? A holiday of course.
Disney (DIS) has an increasing subscriber base for its streaming service and has opened its parks.
Boeing (BA) anyone? It has been 23 months since any accident involving a Boeing Max. The post-disaster memory of people is about 18 months. When they travel on attaining freedom from Covid-19, they will not refuse to travel because the plane happens to be a Boeing Max.
Add to that the possibility of orders for Boeing aircraft on the back of the diplomatic efforts put in by President Biden’s team, like from China for instance. The last President did a great job of calling out the Chinese. But with our allies being pushovers, since they need the Chinese market, the situation is likely to revert to the earlier days. Add to that the two million jobs linked directly or indirectly to its production, and you have a potent stock.
How about Carnival (CCL)? They raised $3.5 billion at an astonishingly low 5.75%.
And Norwegian (NCLH). It has a great balance sheet. Another recommended buy.
And Moderna (MRNA)? You could say these thoughts have been planted in my brain by Moderna.
As a general investing guideline, these insights are good only as long as they are insights, and available to a few, and before the realization dawns on the rest of the world.