You’ve Got a Friend in Me
“So, no one told you life was gonna be this way … (insert clapping here).”
Weekly jobless claims are in, dear reader, and I had to do a double take. Roughly 5.24 million Americans filed new unemployment claims last week, according to the U.S. Department of Labor.
Now, we’ve seen bigger numbers in the past month. There were 6.6 million new claims in the prior report, after all. But, if you’re doing the math and following along at home, you probably already know what I’m getting at…
The total number of jobs lost in the past four weeks now stands at just over 22 million.
22 million. Let that sink in.
Let’s put that figure in perspective: Between the end of the Great Recession in 2010 and February 2020, the U.S. economy added about 21.9 million jobs.
In other words, the U.S. economy lost as many jobs in the past four weeks as it created in the prior 10 years.
The official employment figures don’t come out until May 8 with the April nonfarm payrolls report. But if we use the March payrolls report of 155 million employed as a guideline … that works out to about 14% of Americans filing for unemployment in the past four weeks.
That’s staggering. The entire Great Recession recovery … gone … in just four weeks.
I know it hasn’t been your day, your week, your month or even your year, but…
Great Stuff and Banyan Hill will be there for you, when the rain starts to pour. Because our team has been here before.
From dot-com busts to financial meltdowns, the great people here at Great Stuff and Banyan Hill have seen it all. And, if you’ve been a good Great Stuff reader, you’ve likely prepared for what’s coming.
But, just in case you missed a few issues or are just now joining us, let’s reiterate the three investments where most of your capital should be positioned right now:
- Gold: This one is a no-brainer. Gold is a store of value. Sure, its value goes up when economic times are hard. But the most important thing about gold is that it preserves your wealth. In bear markets, not losing money is probably more important than making money. If bullion isn’t your thing, check out the SPDR Gold Trust (NYSE: GLD) to get your gold fix.
- Bonds: Another solid safe haven for times of trouble. But we’re not talking just any old bonds. We’re talking U.S. Treasury bonds. And the easiest way to take advantage of this secure investment is via the iShares 20+ Year Treasury Bond ETF (Nasdaq: TLT), or exchange-traded fund.
- Cash: You’ve heard the saying that “cash is king,” right? It’s true. When all else fails, holding cash is a tried-and-true method to maintain your … um … cash. But we’re in the 21st century now. There are better ways to keep cash than stuffing Benjamins in your mattress, such as the Invesco CurrencyShares Swiss Franc Trust (NYSE: FXF) or the Invesco CurrencyShares Japanese Yen Trust (NYSE: FXY).
The idea with these three core investments is to preserve your capital until the market returns to solid footing. That way, you have more to invest when everything trends higher once again.
Now, in addition to these core holdings, there is a smattering of well-run, well-capitalized companies that can help pull you through a bear market, a pandemic or whatever else the market faces. In fact, we’re going to touch on three of those today (more on that in a bit).
But, if you want dedicated, actionable research to help you get through this mess, there are few better guides than Banyan Hill’s own Charles Mizrahi.
Charles can help you sift the pandemic market’s wheat from chaff. Not only does he climb mountains of data and wade through waves of financial headline noise, he shows you how to spot true-blood, game-changing businesses. I mean, this is a guy who picked 36 stocks in a row that went up 50% or more!
That’s the kind of guidance you want right now. Click here now to learn more.
Good: Hey, Abbott!
All-time highs? In this market? It’s more likely than you’d think. All three of today’s focus companies are knocking it out of the park right now, so take note!
First up, we have Abbott Laboratories (NYSE: ABT).
This morning, Abbott reported Street-beating quarterly earnings and revenue. Both figures rose steadily year over year: earnings up about 3.2% and revenue up 2.5%. That level of consistency will be hard to find this earnings season.
Abbott did pull its 2020 guidance due to COVID-19 uncertainties, but the company is in the right market to weather this storm better than most.
In fact, Abbott has one of the few rapid virus tests on the market to receive emergency Food & Drug Administration approval. The company’s test is portable, doesn’t need a lab and returns results in five minutes. Only Aytu BioScience Inc. (Nasdaq: AYTU) has a better testing time.
But Abbott has one thing that Aytu doesn’t … gobs of cash. Abbott says it can churn out about 50,000 tests per day once it ramps up production. And that means plenty of revenue down the road, as testing is key to stemming the COVID-19 tide.
With ABT shares trading near all-time highs, wait for a pullback if you want to be all about Abbott. (Thankfully, other biotech opportunities are right around the corner. Click here ASAP!)
Better: Stream Exotic
With shows such as Tiger King and Ozark going viral, Netflix Inc. (Nasdaq: NFLX) is among the de facto winners in the “shelter at home” market.
Goldman Sachs just named Netflix a “conviction buy,” lifting its price target from $430 to $490. The ratings firm believes that Netflix will add 10 million new subs and report earnings well above the consensus estimate.
Meanwhile, Pivotal Research Group reiterated its buy rating on Netflix, boosting its price target to $490 as well. Pivotal also cited impressive subscriber growth, telling clients that: “We believe the unfortunate COVID-19 situation is cementing Netflix’s global DTC (direct-to-consumer) dominance.”
With everyone locked at home for the foreseeable future, even sardine-oil-obsessed Carole Baskin can’t sink NFLX stock right now. (If you didn’t get that reference, you need to watch Tiger King like … now.)
As with ABT, the only risk we see for NFLX right now is a sharp decline in the broader market.
Best: Amazing Amazon
Amazon.com Inc. (Nasdaq: AMZN) is the be-all and end-all quarantine investment. It slices. It dices. It makes julienne fries. It hits all-time highs.
The only thing it doesn’t do right now is provide cloud services for the Pentagon. Amazon is no JEDI, according to the Department of Defense Office of Inspector General, anyway.
Well, it also doesn’t ship nonessential goods in France.
So, I guess Amazon doesn’t do everything. But it does do more than enough to excite Wall Street analysts. Yesterday, Deutsche Bank reiterated its buy rating on AMZN stock, while all but accusing the company of “profiting from the COVID-related turmoil.”
A company built around delivering practically any product you can think of was essentially designed to benefit from a quarantine situation. There’s no way around it.
But Amazon is taking steps to mitigate some of the bad PR arising from the COVID-19 situation (and the company’s soaring profits). CEO Jeff Bezos is building out virus-testing capabilities at Amazon. The company raised wages, and Bezos himself is raining pennies down on charity relief efforts.
The bottom line: Amazon is pretty much the only game in town for online ordering and at-home delivery for a whole host of essential products. That’s why AMZN continues to hit all-time highs, and why Amazon should be at the top of any investment opportunities you’re considering right now.
You know the deal: You “Marco,” I “Polo!”
It’s already that time of week — man, time keeps on slipping, slipping, slipping … into the future. Let’s turn the conversation over to you in today’s edition of Reader Feedback.
Other Side of the Street
JB Hunt is a horrible company with terrible culture (30+yrs in trucking experience), those huge payouts were to try to reverse the horrible turn over rate.
— Ron V.
First off, thank you for writing in, Ron! We here at Great Stuff love to hear from folks exactly like you — those with front-line experiences of the stories we cover.
As you know, the freight game is already notorious for its next-to-nothing margins. So when you combine that with a whipsaw between supply surges and demand droughts … the worst-case scenario almost writes itself for any trucking company without an edge.
The Wall Street Journal detailed the great transportation shake-up back during the heights of panic buying. Derek Leathers, CEO of J.B. competitor Werner Enterprises Inc. (Nasdaq: WERN), said: “We’re having to redesign the network in real time.”
Call it a bribe, stipend, bonus or loyalty incentive … but J.B. Hunt Transport Services Inc. (Nasdaq: JBHT) at least put up a nice show to try and keep its truly essential assets together — the truckers still showing up to haul cargo each and every day.
The Nuances of Bottoms
Do you have any kind of an estimate of when the market is going to bottom out?
— C. Ray S.
Frankly, C. Ray … nope!
No one — not even the most learned, “nose to the data grind” analyst on Wall Street — has anything more than a best guess.
We’re just started what may be the most radical, uncertain earnings season of our lives. Legions of day traders, investors, working and non-working Joes, speculators, fund managers and even world governments are playing the waiting game to see how bad everyone else’s damage is.
We need more data. Period. The entirety of this corporate earnings season is still up in the air for nearly every U.S. stock. Investors who wait, hope and plan on market bottoms get left behind.
Bottom line: If you hold stores of value and/or well-run companies throughout this debacle, you don’t need to spot the bottom. Amid all the noise and volatility, most stocks will see their “bottoms” at completely different times.
That’s why gold, currencies and solid stocks are your best chance at holding on to certainty — no matter what uncertainty lies ahead.
Odds and Ends
LOVE LOVE ❤️
— Jeff Z.
Jeff here kept it short and sweet. I, for one, appreciate the kindness, Jeff!
Hey, thanks for the link to the Smith Barney commercial. I enjoyed seeing it again (Yes, I’m that old!). It’s funny how those old catchphrases stay with you.
— Charles H.
When Charles H. talks, Great Stuff listens! Glad to hear that it’s not just my brainbox these old-school slogans still kick around in. He likes it! Hey, Mikey!
Thank you to Ron, C. Ray, Jeff and Charles for writing in! If you wrote in and I didn’t get to you, it might be because you cursed too $%*?@#! much. We deeply appreciate each and every one of your emails (and you can never have too much to read during isolation).
Have you written to us yet? No?! Feel free to speak your mind — drop us a line at GreatStuffToday@BanyanHill.com.
Until next time, be Great!
Editor, Great Stuff