Prices are crashing, people are losing their jobs, the Wall Street is empty, and grocery store owners are risking their lives to sell essential commodities to the masses and all this courtesy to the pandemic. It is true that millions of people have lost their jobs during the pandemic and almost everything is shutting down but one thing that hasn’t seen a closure is the stock market. Businesses are still alive since the stock market is alive and in the last 8 weeks, the market has shown itself to be good at drawing steep lines that affect people’s long term and short term investment but never the less, people are finding ways around it. Investors are betting on stocks that are very useful during this pandemic, with that they will be able to make money during this period.
Financial experts like Sallie Krawcheck and the Deen of valuation Aswath Damodaran as well as Dave Portnoy (founder of Barstool sports) said so many things people should not do at this point in their lives. Portnoy said “Never day trade with money you cannot lose” Millionaire Portnoy day traded with $3 million and lost $720,000 to day trading as at April 16th 2020.
Damodaran has advice that if you have a steady paycheck in this period, it is advisable not to put all your eggs in one basket. The analyst said he will invest in four categories, the first is what he calls his bargain basement which are companies that are likely going to survive after the pandemic which you can now buy at a lower price that what you can buy them when there was no crises. He mentioned a few companies like bargain.com, Expedia, Conoco Phillips, ExxonMobil. He says he also invest in another category he called the distress bets. This are companies that may still tank because the companies are still losing money but they will surely payoff tenfold after the pandemic. He talked about the airline industry falling under this category from Delta, American Airline and so on. He said his third is safe at a reasonable price. He says the companies keep selling even during the crises. Companies such as Amazon, Apple, and Google. He said since people are loading up on this stocks investors could look into stocks of companies like Adobe. He said his final one is the bet on behavior category. He said this are companies that are benefiting from this crises such as Instacart, Zoom, Chegg and many more. His advice is to invest in companies that will come out of this crises strong and not invest where your money will disappear.
Krawcheck looks at equity and said she will keep her investment boring. She said she will invest in diversified portfolio and if the investor is younger, they can buy more equity while the older ones can buy more bonds. She made it clear that this period of pandemic, do not look for a fast income on the stock market or you will get hit by the market. Make the market boring, and expect the worse while investing.
Krawcheck made it clear to people who do not have any form of income during this period but got the stimulus check to pay off their credit card debt with it.
After reading my post, I have a question for you, and that is;