Washington Makes It Rain; Invest in Biotech Again?
Time to Make It Rain
Everybody’s talking about recession, depression, regression, correction, mass infection, elections…
All Great Stuff is saying is “chill the freak out.”
We’ve gone from no worry at all … to recession concerns … to full-blown depression fears in less than two weeks. It’s so bad that economists and analysts are already arguing over the size of the bailout.
Former Federal Reserve economist Claudia Sahm says she doesn’t “want to see anything less than $1.5 trillion” in economic stimulus. “They need to go big, and they need to go now.”
Meanwhile, Guggenheim Investments’ Global Chief Investment Officer Scott Minerd calls for a $2 trillion bailout fund. “The risk is that for the first time since the 1930s we are facing the possibility of a downward spiral into something akin to a global recession,” says Scott.
Finally, U.S. Treasury Secretary (and John Oliver impersonator) Steven Mnuchin is pushing for a $1 trillion stimulus package that would deliver cash immediately into Americans’ hands, while also supporting airlines and various other companies. According to Mnuchin — am I the only one craving Munchos now? — the U.S. unemployment rate could hit 20% if lawmakers do nothing.
A Treasury spokesperson later followed up that Mnuchin doesn’t really expect a 20% unemployment rate. He used “several mathematical examples for illustrative purposes, but he never implied this would be the case,” they said.
I hope you listened yesterday and didn’t buy into that dead cat bounce. And hopefully you got in on our latest Great Stuff Picks recommendation. This one could save you a lot of headache in your portfolio.
Once again, we’re looking out for your best interests in this crazy market.
And man, what a crazy market it is. The fear … it’s so thick that you could cut it with a knife.
Wait … no, not like that. Bad idiom! Bad idiom!
Case in point: The Centers for Disease Control and Prevention now advises morticians to livestream funerals! Imagine that … livestreamed funerals.
“Man, Ernest looks really rough … no, wait, he’s just buffering.”
Here’s the thing: Right now, there’s an abundance of panic pretty much everywhere. From governments and local businesses to your friends down the street … panic and fear threaten to overwhelm us all.
Concern and action are warranted, certainly, but panic is not.
Remember: This too shall pass.
While Washington is about to make it rain dollar bills on the U.S. economy, here at Great Stuff, we have a different tactic. Mostly because we don’t have enough dough or the technology to make it rain cash through your screen. (We’re working on it at Great Stuff Laboratories, though! Not really … I just wanted to say Great Stuff Laboratories…)
We try to offset the urge to panic with solid, actionable investing advice — served up with as much humor and salty commentary as we can muster. Hopefully we provide a bit of an outlet for all this insanity.
Stick with Great Stuff and BanyanHill.com. We’re here to help guide you through.
Let us know how you’re doing. Drop us a line or a meme. Let us know your favorite quarantine game/pastime! (Apparently, drinking “quarantinis” is a no-no now, so I need ideas!)
Email us at GreatStuffToday@banyanhill.com.
Speaking of great advice … you have to be tired of taking losses on buy-and-hold stock positions at this point. That market volatility is a killer.
While stockholders cradle their losses due to a volatile market, options traders are cheering all the way to the bank. Turbulent markets are a fantasyland for trading options, you see … and nearly 80% of you loyal Great Stuff readers are just itching to get your own options hustle on. (Remember, you told us!)
There’s no better time than now to cast your options superstitions aside … and dive right into the belly of the beast.
Imagine: Paul Mampilly … a choppy market … and options trading! Reese’s cups have nothing on this great combo!
Good: Amazon Steps Up
Amazon.com Inc. (Nasdaq: AMZN) gets a bad rap for being a “monopoly” in the retail space. Justified or not, the company can be inordinately powerful when it wants to be.
In the past two days, however, Amazon proved that it can use that power for good. Well … for good and profit, of course. Yesterday, Amazon said it will hire 100,000 workers to make up for an increase in online orders.
Today, the company said that it will no longer accept nonessential goods at Amazon warehouses due to the coronavirus. I’ll let Amazon explain it:
As someone who had to buy toilet paper on Amazon for the first time ever last week … I applaud this move.
Better: Zoom, Zoom, Zoom…
… let’s go back to my room, where we can videoconference all night and keep businesses all right.
One of the real winners amid the coronavirus quarantines is Zoom Video Communications Inc. (Nasdaq: ZM). The new world order of “social distancing” played right into this teleconference specialist’s hands, creating massive demand from both corporate and private customers.
Most of these new subscribers use Zoom’s free services. However, investors are confident that many of these free subs — especially corporate subscribers — will soon convert to paid subs. And that means more explosive growth for Zoom.
That’s impressive … most impressive, especially when you consider that Zoom has already seen earnings growth of 275% to 800% in the past three quarters.
While the rest of the market went to hell in a handbasket, ZM shares held their ground, refusing to fall below the $100 mark.
In fact, ZM has been more stable than gold or bonds in recent weeks. So, if Zoom Video isn’t on your short list for investment ideas, put it there now.
Best: Big Bang Baby
Literally anything vaccine-related is on fire this year on Wall Street. The latest red-hot biotech that will solve the coronavirus problem is BioNTech SE (Nasdaq: BNTX).
The company specializes in immunotherapy for cancer and other diseases. In other words, the company’s drugs help patients with weakened immune systems fight off diseases while treating other health issues, such as cancer.
BioNTech went public back in October 2019 and slowly meandered its way higher through the end of last year — a feat in and of itself, given how initial public offerings performed last year.
However, BNTX caught fire this week when it announced a partnership with Pfizer Inc. (NYSE: PFE) to develop a coronavirus vaccine. Given its background, BioNTech was already well positioned to help develop just such a vaccine and treatment for COVID-19. Add in Pfizer’s marketing muscle and hoard of cash, and it’s a match made in heaven.
Well … almost heaven. There’s a plethora of biotechs working on cures and vaccines for COVID-19 right now. This is a good thing for the world … and I’m not exaggerating.
That said, with new companies pushing toward potential vaccines every day, I have to wonder how many of these spiking stocks will hold their ground.
As we saw with Inovio Pharmaceuticals Inc. (Nasdaq: INO), these sharp moves are often over by the time regular investors can take advantage of them.
So, you’ve heard Great Stuff yap on and on about “store-of-value assets” this and “diversify” that.
Awww, geez, Mr. Great Stuff, not this schtick again?
Hey now, we’re just trying to help you out here! I know this correction is new territory for some of you … and that’s OK. Welcome to the s&*#@ show!
No matter if this is your first volatility rodeo or not, Great Stuff wants to know how you’re getting through. Did you take our recommendations to buy gold, bonds, Swiss Francs and short positions?
Or do you have your own home-cooked methods to weather the storm? (Gary W., I see you out there selling puts like a boss. Keep fighting the good fight!)
With that in mind — it’s time to talk strategy in today’s Poll of the Week!
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Great Stuff: Disaster Prep — the Right Way
If you don’t have an answer for today’s poll … if you’re still looking for the right way to brave a possible recession … you are not alone.
Experts are here to guide you and your portfolio through the market storm. This volatility will pass — it’s just a matter of preparing your portfolio for the meantime.
Just ask Cassandra … err, I mean Ted Bauman — our resident expert on how to weather market turbulence. Ted’s readers in The Bauman Letter have diversification and disaster prep right at their fingertips. Those vital steps are what stop panic in its tracks.
Until next time, good trading!
Editor, Great Stuff