Futures are giving up some ground today against the backdrop of more virus-related restrictions and I can’t say I’m surprised. We’ve known for at least 6 months to a year that there would be a second wave.
Here’s the thing.
It’s NOT the virus restrictions driving prices lower like most people think and the mainstream news is reporting. Traders and investors are simply factoring in the uncertainty associated with what happens next. Many, of course, are also letting their emotions get the better of ‘em but that’s a story for another day.
What I’m focused on this morning are the opportunities that uncertainty creates.
Pfizer is reportedly applying for emergency use authorization for its Covid-19 vaccine and widely expected to get it based on 95% efficacy. Developed with BioNTech, the stock’s tacked on 1% in the pre-market. I picked Pfizer early on so I’m pleased to see that … as punch actually. The company is also reportedly ready to begin distribution within hours if approved.
The biggest problem I may have is NOT owning enough shares but, thankfully, that’s fixable! I won’t be chasing BioNTech, though.
The son of a dead Tyson Foods employee filed a lawsuit alleging that Tyson managers and supervisors made bets on how many workers would contract Covid-19. He also accused the company of willful and wanton disregard for worker safety. Apparently, the plant manager organized a betting pool based on the anticipated results. That's disgusting if true.
I have to imagine other lawsuits at other companies will follow in the months ahead which means anticipating legal reserves could be an investing criteria. I see retail stocks like Home Depot, Lowes, grocers, pharmacies as being especially susceptible to potential liability. That said, I am already avoid ‘em so I don’t have exposure … still…
Constantly boggles my mind. I have long argued diversification is dead and that concentration is the way to go. Not only that, but I submit that Wall Street continues to peddle diversification knowing full well it no longer works and has been based on several critical flaws from the very beginning in 1952 when Markowitz first advanced the theory.
This doesn’t make me very popular at Wall Street cocktail parties as you might imagine. But, I’m okay with that.
The numbers bear me out yet again this year … Apple, Amazon, Facebook, Google and Microsoft have returned 52.5% year to date versus just 6.3% for the broader S&P 500. Ergo, anybody diversifying or buying the index is giving up huge profits rather than making ‘em.
You just have to know how to find, buy and manage the right stocks – and, I’d love to help and. Importantly, I CAN starting in January, 2021 when my non-competes have expired. Learn more
Treasury Secretary Mnuchin has 86’d some pandemic lending programs that the Fed considers essential. While I make no bones about the Fed being a relic of the past and a bubble-maker, this strikes me as just plain stupid because the economy is not yet out of the woods in terms of recovery.
It’s also yet more reason to focus on companies like Microsoft, Apple and Palantir that can grow “in spite of” what happens next. I spoke about that yesterday during my keynote at the MoneyShow and my remarks were well-received; I encourage you to tune in if you still can or simply catch up with me January 12-14 when I return to present my 2021 Outlook. Learn more or sign up here.
Chances are you know I’m a gear head and have been all my life. Normally, I prefer vintage, but this Rolls Royce Cullinan Arctic SUV is just plain badassery. Not sure I’d buy it, but dang!!
The virus is going to continue to challenge markets until well into spring 2021. That speaks to more tech and more mission critical companies as well as the “barbell approach.”
Best regards for health and wealth,
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