The recent bull market in equities has been nothing short of remarkable. I mean, the Nasdaq-100 is up 20% year-to-date. 20%! I know no one who saw that coming.
I’ve been particularly interested in PPE and healthcare companies. What this virus has shown me is that we have a giant shortage in medical supplies, medical technology, and protective equipment. We need to correct this and it will be an important demand shift going forward so that we never repeat it again. I am particularly interested in ways to help and invest. I should warn you though: the entire industry is a mess, full of scams, and disorganized. But maybe that’s the opportunity.
As the summer months kick-off and the sun shines, here are a few other things on my mind as the market, and especially tech, have taken off toward the moon:
1. I want to spend the rest of summer not having to worry about any wild market drama. There is no price for peace of mind. A well structured portfolio or a plan can do that for you and that’s how I’m setting up for the next few months.
2. I am a trader; yes. But my biggest winners have been long-term investments in companies I like or find interesting. I think most people would say the same: a long-term plan is usually far more lucrative and it’s less work. I currently don’t see many companies that I’m interested in long-term beyond the healthcare industry. I feel no urgency to rush into anything else.
3. I think the Fed has done a great job supporting markets and the flow of money in general, but I am consistently worried about our reliance on markets. Life is so much bigger than the indexes, and at times, I think we’re setting ourselves up for failure as we obsess over our new god called Dow Jones Industrial Average. The fact the market can’t drop 30% without mass calamity shows how fragile we are toward it.
4. I see people in all corners of investing or trading rushing into absurdly dicey penny stocks. It is a wolf’s dream. Don’t be a sheep or at least if you know you’re rookie or a newb, try and pretend you’re not. It’s just that kind of time. I tell all of my friends who are just getting interested in markets to follow a simple rule: if you don’t know, stay away.
5. The rise of stock geniuses has become a Internet phenom that no one can escape. “Buy the next Amazon right now” ads are on every Youtube video I watch. These people risk very little of their own money and rely on your subscription revenue. They have no relationship to you, they sell a subscription, and suffer no consequences if things go wrong. If you want help with investing or general finance, go talk to someone you know and trust.
That’s all for now.
By the way, the reason why this post is called Thinking About The Rona Part 2 is because I wrote a similar piece back in April that started like this:
“There is only one thing going through my mind right now: How can we get back to normal without a vaccine?
I don’t plan on doing much with my money until I have a better understanding of that. I’m taking on some swing trades here and there. Or trying to lower my cost basis on some positions I am the most loyal bagholder of. For the most part, I am approaching everything like the kid who shows up with knee pads, elbow pads, and a helmet.”– Thinking About The Rona Part 1
Today, the elbow pads are still on tight. Not much has changed beyond what I wrote here and other wild tweets or blog posts you may have seen me write.