The recent Coronavirus pandemic has impacted how we all carry out our daily lives. The virus has changed how we work, live, and interact with other people. Some people have been impacted personally from the virus, and others have been impacted financially. COVID-19 is a once in every 100 year pandemic that nobody could plan for. From an economic standpoint, the virus has unintentionally created winners and losers in our economy. For people who can perform their job duties remotely, there hasn’t been much change to how work is carried out (I will say, however, that working from home while caring for young children at the same time is absolutely taxing. Call and check on your friends who have young kids). For people who are essential workers (hospital workers, grocery store clerks, UPS delivery drivers, etc.) you are literally risking your life to help people meet their most basic needs. For service industry, retail, travel, and hospitality workers, your job has been negatively impacted by the virus. I am sympathetic to everyone who has been impacted. It’s very unfortunate. I struggle with even writing this post, because I am fully aware of the pain that people are feeling economically. Just like the economy, the virus has unintentionally created winners and losers for those of us invested in the stock market. Some companies have benefited (and will continue to do so) tremendously because of the pandemic. Some companies will unfortunately struggle, and may even go out of business. This is due to a change in habits by the American consumer. The world was forever changed in March. Let’s take a deeper look into the implications of these changes.

Jim Cramer (a widely followed investor on CNBC, very very smart, follow him on twitter @jimcramer) put together a “COVID-19 Index” of stocks that should win, post pandemic. Listed below are the companies, broken out by sector:

Beverages: PepsiCo, Boston Beer

Cloud Software: Salesforce.com, Adobe, Zoom Video, RingCentral, Slack, CrowdStrike, Okta, Zscaler, Cloudflare, Coupa Software, DocuSign, Everbridge, Veeva Systems, Fastly, VMWare

E-Commerce: Chewy, EBay, Shopify, Prologis

Financial Tech: MarketAxess, Tradeweb, Square, PayPal

Video Games: Activision Blizzard, Electronic Arts, Take-Two Interactive

Home Entertainment Providers: Netflix, Roku, Snapchat, Spotify, Akamai Technologies, The Trade Desk

Mega-Cap Tech: Google, Amazon, Apple, Microsoft, Amazon

Small-Cap Tech: Citrix Systems, Logitech

REITs: American Tower, Crown Castle, CoreSite Realty, Digital Realty, Equinix

Restaurant Survivors: Chipotle, Domino’s Pizza, Wingstop

Retail Survivors: Costco, Walmart, Dollar General, Home Depot, Target, Lowes

Seminconductors: Advanced Micro Devices, Nvidia, Marvell Technology

Consumer Packaged Goods: Clorox, Colgate-Palmolive, Kimberly-Clark, Procter & Gamble

Healthcare: Abbott Laboratories, AbbVie, Centene, UnitedHealth Group, Gilead Sciences, Regeneron, Sanofi, Danaher, Thermo Fisher, Eli Lilly, Baxter, Becton Dickinson, DexCom, Johnson & Johnson, Massimo, Perrigo, Pfizer, ResMed, Zoetis

Packaged Food: Campbell Soup, Conagra, General Mills, Hormel, J M Smucker, Kellogg, McCormick, Mondelez

Safety Stocks: Dominion Energy, NextEra Energy, Verizon

Others: BioNTech, Inovio, Moderna, Livongo, Teladoc Health, Barrick Gold, Beyond Meat, Freshpet, Inseego, Owens & Minor, Peleton

There are a lot of names listed above, but each of these companies should do well in our new post pandemic world, as Cramer argues. Think about the cloud software, big cap tech, and small cap tech names listed. All of these play a part in enabling us to work from home seamlessly. Think about the retail and restaurant survivors. You can easily pick up your food or get it delivered from Chipotle or Domino’s, without having contact with anyone. Since you’re at home more now, you’re going to spend money at Costco or Target to pick up everyday goods, but you don’t have to leave your car to retrieve them. You have probably signed up for Chewy, so your pet’s food can get delivered right to your doorstep. You probably have more time to redo stuff in your house, yard, or on your patio so you’re certainly making trips to Home Depot or Lowes. You now have more time to play video games, watch Netflix, or listen to podcasts on Spotify as well, so that’s why those stocks are performing well. You are even forgoing the gym, so you probably have an interest in a Peleton bike. The bottom line is these names are working! They should continue to work as American consumers settle in to our post-pandemic habits.

In the beginning stages of the pandemic in early March, I posted a quote on Instagram about all the panic that was going on. J.P. Morgan (yes the actual J.P. Morgan) once famously said, “In bear markets, stocks return to their rightful owners.” I followed this quote with my own post, reminding people that if you panic sell out of your stocks, please understand that they are selling them to me and other patient investors. You see for every buyer, there has to be a seller. Somebody is always on the other side of the trade. Warren Buffett was quoted as saying, “The stock market is a device for transferring money from the impatient to the patient.” A lot of people panic sold at the absolute worst time back in March because of fear and impatience. They couldn’t handle seeing their portfolio move down by 10, or 20, or 30, or 40 percent. Below is a screenshot of what the market did when the pandemic headlines got scary.

The S&P 500 dropped from 3,370 on February 18th to 2,237 on March 23rd (~35% in a month!). On March 16th, the market dropped almost 13%. A 13 percent drop in one day is very scary. This was panic being played out in real time. Nick Jr’s portfolio dropped from a high of ~$22,000 in February to a low of ~$14,000 in mid-March. That-is-SCARY. When you read negative headline after negative headline and see your portfolio in free-fall, it’s really hard not to act. The easiest thing to do is take an action to make the pain go away. That action, for most investors operating out of fear, is to sell their positions. What I have learned as an investor in common stocks is that oftentimes the best action is no action. I never try to act on emotion (whether positive or negative) when it comes to buying stocks. If I see stocks that I own going down by large percentages, I do not sell off the emotion of fear (negative emotion). By that same token, if I see a stock that I don’t own go up by large percentages, I do not buy off the emotion of greed (positive emotion). During this particular drop, I understood that as a long term investor that this was an opportunity to buy stocks, and buy them aggressively. This was my “2008 moment”. You see, during the great financial crisis in 2008, stocks dropped ~50% from peak to trough. A lot of people talk about how they wish they were aggressive back then, because their portfolios would have performed really well if they did. It’s easy to say that you’ll buy aggressively when the market is down so much, but it’s much much harder to do in real life. There is a fear in real time that the market will plunge further, and that fear paralyzes a lot of people from taking action. You have to take your shot when opportunities present themselves. It takes courage to buy into the fear, understanding that you’ll be rewarded in the future for your patience. When markets drop even more than I think they should, I get even more aggressive. In fact, I root for lower prices because as an investor in my 30’s, I fully understand that I don’t need the capital that I’m investing right now. Rooting for lower prices makes sense to me at this stage in life. So, yes, I got really…really aggressive during this recent drop. Every dollar that I could find, I invested. I thought markets would take a year or two to recover, so as a patient investor (just like the Buffett quote above), I knew I would be rewarded. I had NO idea that markets would recover in two to three months. There is a saying, however, that luck follows sweat. If you’re positioned well and you prepare well, you will receive some luck.

Below, I list all of the stocks I purchased since the market drop in March across all my portfolios. I also include what price I purchased at.

Nick Jr Portfolio: 2.3 shares of Crowdstrike (CRWD) @ $63.38/share, 8.6 shares of Bed Bath & Beyond (BBBY) @ $12.67, 5.5 shares of Slack (WORK) @ $27.49, 0.8 shares of Shopify (SHOP) @ $336.83, 0.3 shares of Tesla (TSLA) @ $427.64, 0.6 shares of American Tower (AMT) @ $179.09, 1.3 shares of Restoration Hardware (RH) @ $80.43, 10.4 shares of Penn National Gaming (PENN) @ $11.77, 2.2 shares of Phillips Van-Heusen (PVH) @ $46.06, 2.4 shares of Live Nation (LYV) @ $41.96, 1.02 shares of Beyond Meat (BYND) @ $145.35

Ava Portfolio (yes I used the dip to start babygirl’s account): 1.7 shares of Crowdstrike (CRWD) @ $57.50, 0.15 shares of Shopify (SHOP) @ $438.37, 0.9 shares of Twilio @ $110.91, 0.9 shares of American Express (AXP) @ $112.81, 0.85 shares of Disney (DIS) @ $117.65, 1.02 shares of Visa (V) @ $184.36, 0.7 shares of Apple (AAPL) @ $289.03, 0.7 shares of MasterCard (MA) @ $287.01, 0.6 shares of Facebook (FB) @ $169.50, 0.12 shares of Tesla (TSLA) @ $608, 0.06 shares of Amazon (AMZN) @ $1800.61, 0.7 shares of Microsoft (MSFT) @ $150.62, 0.4 shares of Nvidia (NVDA) @ $245.44, 0.08 shares of Google (GOOG) @ $1215.56, 0.3 shares of Adobe (ADBE) @ $305.79, 1.4 shares of Avalara (AVLR) @ $71.54, 1.1 shares of JPMorgan Chase (JPM) @ $88.05, 1.3 shares of Nike (NKE) @ $74.20, 0.63 shares of Boeing (BA) @ $154.84, 1 share of Restoration Hardware (RH) @ $100.47, 2.4 shares of Plant Fitness (PLNT) @ $42.56, 2.2 shares of Phillips Van-Huesen (PVH) @ $46.06, 1.7 shares of Square (SQ) @ $59.42, 2.4 shares of Live Nation (LYV) @$41.96, and 3 shares of Southwest Airlines (LUV) @ $34.38. As of this writing, her portfolio is worth $4,417.

Retirement Accounts: 41 shares of Bed Bath & Beyond (BBBY) @ $12.24, 12 shares of American Express (AXP) @ $94.19, 2 shares of Restoration Hardware (RH) @ $120.86, 50 shares of Penn National Gaming (PENN) @ $11.20, 20 shares of Wells Fargo (WFC) @ $29.57, 6 shares of Wynn Resorts (WYNN) @ $72.89, 19 shares of Pinterest (PINS) @ $21.32, 6 shares of Expedia (EXPE) @ $67.26, 4 shares of Ulta Beauty (ULTA) @ $218.87, 5 shares of Boeing (BA) @ $129.38, 18 shares of Live Nation @ $46.09, 9 shares of Inphi (IPHI) @ $115.01, 25 shares of Southwest Airlines (LUV) @ $37.21, 46 shares of Carnival Cruise Lines (CCL) @ $21.46, 44 shares of Norwegian Cruise Lines (NCLH) @ $18.98, 18 shares of Royal Caribbean Cruises @ $50.21, 98 shares of Inseego (INSG) @ $10.79, 7 shares of Shopify (SHOP) @ $328.72, and 19 shares of Six Flags @ $14.09. Note: In these portfolios, I have large tech positions in many of the names listed in Cramer’s index. The purchases since March are my attempt to balance those with stocks that should recover after we get a vaccine. It’s a barbell approach that I think should work.

After-Tax Account: 4 shares of Boeing (BA) @ $126.29, 6 shares of Starbucks (SBUX) @ $62.05, 6 shares of Nike (NKE) @ $72.08, 10 shares of Wells Fargo (WFC) @ $29.64, 13 shares of El Dorado Resorts (ERI) @ $8.55, 3 shares of VF Corporation (VFC) @ $51.27, 1 share of Vail Resorts (MTN) @ $142.30, 12 shares of Store Capital (STOR) @ $17.65, 20 shares of Pulte Homes (PHM) @ $24.32, 2 shares of Walt Disney (DIS) @ $104.76, 2 shares of Ralph Lauren (RL) @ $71.97, 7 shares of Greenbrier Companies (GBX) @ $22.09, 16 shares of Switch Inc. (SWCH) @ $18.64, 11 shares of Invitation Homes (INVH) @ $26.70 , 11 shares of Southwest Airlines (LUV) @ $34.91, 5 shares of KB Homes (KBH) @ $29.22, and 12 shares of ViacomCBS (VIAC) @ $24.04.

As you can see above, I got really aggressive across the board in March and April. I have invested capital in a lot of stocks that should recover once a vaccine happens. If you look carefully, there are some common themes that I have aggressively bought amongst all the portfolios. First, Shopify. This company is enabling the digitization of small business. It has gone from $28/share to $1000/share in 5 years. Just buy it. Second, Casinos, Cruise Ships, and Airplanes. People are itching to get out and gamble to lose their money. You can profit off of that. It’s why I put capital work in Wynn, Penn Gaming, and El-Dorado Resorts. I think people will return to cruises once the pandemic is over. It’s what Americans do…..we cruise. Norwegian and Royal Caribbean have the strongest balance sheets. These stocks should come back, but we have to hope that they can stay solvent while a vaccine/therapeutic is being developed. Third, Airplanes. I was aggressive in buying Boeing. It was as high as $450/share, and traded all the down to $90. Airplanes will be back up in the sky one day, and our airlines depend on Boeing to supply them with quality planes. On the airlines themselves, I notice a lot of people buying all of them hoping for a comeback. I think people will certainly get back on planes to vacation, but I don’t think business travel is coming back in a robust way. Why get on a plane, get a hotel, and rent a car for business trips, when you can just use Microsoft Teams, Slack, or Zoom? Look at the stocks of these companies, and you’ll see wealth transfer from the airlines to the Zoom’s of the world because of teleworking implications. Warren Buffett also sold all of his airline positions, so why am I betting against his thesis? I put all of my capital allocated for airlines into Southwest. Southwest has the best balance sheet among the major airlines (very low debt/equity ratio compared to Delta, American, and Southwest), so they shouldn’t need to do an equity raise or get additional money from the federal government that has to be paid back. This flexibility should also allow them to take market share (perhaps they lower ticket prices more aggressively than their competitors?). American Airlines could go bankrupt, and Delta and United Airlines will be severely hurt by the lack of business travel. If I had a second favorite, it would be Alaska Airlines or United Airlines. Lastly, Homebuilders. Millennials are out here forming families and having babies. They need starter homes. It’s why I bought KB Homes and Pulte Homes. I also bought Invitation Homes (a Josh Brown favorite, follow him on twitter too @reformedbroker), because some young families can’t afford to buy single family homes, but they could rent them. This company is the largest owner of single family homes and they rent them out. Be patient on these themes, as I think it will take 2 or 3 years for them to play out. I do believe that I will be rewarded for my patience. Just be careful on airlines, not all of them are created equal.

I think you should own many of the tech related stocks in the COVID index, before nibbling on a lot of the names I have purchased in the sections above. I am being transparent with my purchases to show that it can really pay off if you are aggressive when you see opportunity. I bought a lot of stocks from panicked sellers, and I hope to be rewarded in the coming years for my patience. I hope this post inspires you to take a similar approach. Stay safe and be well! Check out the updated portfolio page here.

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