Anybody buying on this downturn?

[Like2Plan]

Welp, its in. Warren Buffett says to sell airlines stocks. It seems no one is going to fly commercial ever again. We should all start flying private. AAL down almost $1 pre market. I may pick up a few more shares today.

I saw that this morning. He even dumped Southwest which of all the airlines it seems like they had the best position. It makes me tremendously sad. I think what Warren is saying is it might be a while before we can get back to our usual pattern of travel.

[rennigade]

Welp, its in. Warren Buffett says to sell airlines stocks. It seems no one is going to fly commercial ever again. We should all start flying private. AAL down almost $1 pre market. I may pick up a few more shares today.

[james.hendrickson]

So, there is starting to be some decent research out there about what types of companies had their stock prices hold up in the Covid-19 pandemic.

Here a pretty solid NBERs paper I found this morning.

Here is the abstract: Corporate Immunity to the COVID-19 Pandemic

Wenzhi Ding, Ross Levine, Chen Lin, Wensi Xie

NBER Working Paper No. 27055
Issued in April 2020
NBER Program(s):Corporate Finance

Using data on over 6,000 firms across 56 economies during the first quarter of 2020, we evaluate the connection between corporate characteristics and stock price reactions to COVID-19 cases. We find that the pandemic-induced drop in stock prices was milder among firms with (a) stronger pre-2020 finances (more cash, less debt, and larger profits), (b) less exposure to COVID-19 through global supply chains and customer locations, (c) more CSR activities, and (d) less entrenched executives. Furthermore, the stock prices of firms with greater hedge fund ownership performed worse, and those of firms with larger non-financial corporate ownership performed better. We believe ours is the first paper to assess international, cross-firm stock price reactions to COVID-19 as functions of these pre-shock corporate characteristics.

----------------------------------------

No real surprises here, but its nice to see the world still works in predictable ways. Firms whose stock prices did better in the COVID-19 shock have the following characteristics:

1. Have flexible management that's not beholden to hedge funds.
2. Have stronger balance sheets
3. Are location independent and not subject to supply chain constraints
4. Are good corporate citizens & have high community trust

Source: NBER.

[Jluke]

My very first auto purchase of Wellington will go through today. A whopping $150 invested and price is about $40/share or so.

I had an extra $150 at Vanguard and thought about buying one share of VTI but didn’t bother.

[disneysteve]

My husband when I commented the economy appears to be fine last night said. What? Economy no. Stock market yes. He said it's a complete disconnect he doesn't understand at all either. I am not sure I agree that we aren't in a financial crisis steve. I mean fundamentals were a long bull market and very high in feb 2020 before the covid 19. Where is there pullback from there?

I didn't say there isn't a financial crisis. There is, for sure. I said it wasn't fundamentally a financial crisis. I think there's a difference. 2008 was fundamentally a financial crisis. It originated in the financial system. This crisis originated from the virus pandemic, which then affected the financial system secondarily. Had COVID never happened, chances are the market and the economy would have continued cruising along just fine.

I'd also point out again that the economy is not the stock market and vice versa. As TexasHusker often said, sometimes the market is down during a recession and sometimes the market is up during a recession. There is not a direct correlation between the two. This could turn out to be one of those times when the market does okay during a recession. Time will tell.

[LivingAlmostLarge]

My husband when I commented the economy appears to be fine last night said. What? Economy no. Stock market yes. He said it's a complete disconnect he doesn't understand at all either. I am not sure I agree that we aren't in a financial crisis steve. I mean fundamentals were a long bull market and very high in feb 2020 before the covid 19. Where is there pullback from there?

[kork13]

With the moderate market recovery (TBD if it lasts, I guess...I don't think I trust it yet), I've significantly slowed down my weekly ETF purchases. I've added ~$25k (taxable) into the market since I started doing those buys in early March, and it is up ~$1k in all. I've also decided to slow down our Roth IRA contributions to slightly slow down how fast we max them out. We've been doing $300/wk each for DW & I (maxing out by mid June), but I'm pulling it back to $200/wk (maxing in mid-July instead). We've each got $3900 contributed for 2020 so far.

I haven't stopped buying completely though... I'm still doing my normal twice-monthly buys into my taxable brokerage ($1k/mo), and I also haven't changed my normal purchases into my TSP (~$1k/mo), since that's a pain to make changes to (requires 1+ month lead time).

[disneysteve]

downturn? What downturn? The market is terrifying me. I don't get it at all. How we are "shut down" and have economic pain and companies are pulling guidance and unemployement is going higher and yet we are almost back to our 2020 peak.

The market hates uncertainty.

When the COVID stuff was ramping up and things were shutting down and nobody knew what would happen or how long it would last, the market tanked.

Now, things are starting to reopen. There are some promising trials going on. Cases have started declining in many places. Social distancing worked and prevented tens of thousands of deaths. The medical system wasn't overwhelmed in most places. The government injected some significant stimulus into the economy. Employers are beginning to rehire those who were laid off (my daughter was rehired on Monday). These are all positives in the eyes of investors and the market is responding accordingly.

Unlike 2008, this was not fundamentally a financial crisis. It was a medical crisis that spilled over into the financial markets. Once the medical stuff improved, which it seems to have, the financial world could start getting back on its feet.

One big concern, of course, is what the 2nd wave looks like when that hits. Also, it's too soon to know if the reopening efforts will cause a spike in cases and deaths as some predict. I don't think the volatility is over yet.

[LivingAlmostLarge]

downturn? What downturn? The market is terrifying me. I don't get it at all. How we are "shut down" and have economic pain and companies are pulling guidance and unemployement is going higher and yet we are almost back to our 2020 peak.

[disneysteve]

Etsy and Fiverr are totally different types of resources. Both have a purpose but Fiverr is certainly more business oriented.

[Singuy]

That would be great. There are a lot of online resources like that but if Fiverr can be the one that consolidates them all, that would be a terrific resource.

Etsy is also a great resource for stuff but more focused than Fiverr. You can get pretty much any kind of custom craft stuff done with Etsy but Fiverr handles all kinds of tasks.

To me crafts are worthless and I don't see large valuation for Etsy (just an opinion of mine). To me, credible programmers, logo designers, graphic artists, commercial producers etc etc are so valuable for small businesses and this is where I see FVRR ends up. Tutors, teachers, anything you can think of where people can sell their talent will be on Fiverr. There are other websites like freelancer.com that are competitors but there's only one company that's growing at 40+% yoy. Millenials are begining to pin FVRR as the go to.

[disneysteve]

Imagine when Fiverr becomes synonomous with "out souce".

That would be great. There are a lot of online resources like that but if Fiverr can be the one that consolidates them all, that would be a terrific resource.

Etsy is also a great resource for stuff but more focused than Fiverr. You can get pretty much any kind of custom craft stuff done with Etsy but Fiverr handles all kinds of tasks.

[Singuy]

I signed up with Fiverr a while ago but never actually did anything. The rates people were charging for the stuff I wanted to do were so low that it wouldn't have been worth my time.

So what I do is to see if any of these companies create any value to soceity of our future. Fiverr to me is on the top of the list once it reaches mass adoption. It can potentially be the go to spot for small and large businesses out sourcing their work out at a much lower rate than having it done in house. Having unlimited amount of talent at your finger tip is transformational because this kind of intangible asset is a money generator. This is by far more valuable to society than Etsy, and I would say as valuable as Amazon and beyond.

Imagine when Fiverr becomes synonomous with "out souce". Small businesses that were once a headache to start can now be accomplished by searching for exactly what you want. Some small bean nobody with some cash can create the next best x, y, and z as long as there's good management skills by utilizing talent exactly how you want it using Fiverr. This is extremely powerful when you begin to think BIG.

Amazon eventually has so many products that it became a SEARCH ENGINE. Youtube became a search engine for knowledge. Fiverr can be the next search engine for talent..talent you don't have to fly to your office, talent you don't have to interview, just talent you can pay and wait for the product you want talored exactly to your needs. That's just mind blowing to me.

This is what I do, I try to find the next Netflix or Amazon. So it's all about projecting where these companies can potentially be in 5-10 years and how they can change our lives and become integral part of our society.

Of course nothing is a sure thing. I just pick companies that has a clear probable path to 10x-100x. At 1 billion dollar market cap, it's a penny stock compared to the big boys. So even if it accomplish just 20% of what I am hoping it should 5-10x.

[disneysteve]

Now I am buying into FVRR, my newest pick as a long investment. Potential I see is 10x in 3 years and possible 50-100x depending on adoption rate. So I am buying today, don't really matter the cost since I'll be long. Sunk about 10k in so far.

I signed up with Fiverr a while ago but never actually did anything. The rates people were charging for the stuff I wanted to do were so low that it wouldn't have been worth my time.

[Singuy]

Bought about 15k of AMD in the 40s.

Now I am buying into FVRR, my newest pick as a long investment. Potential I see is 10x in 3 years and possible 50-100x depending on adoption rate. So I am buying today, don't really matter the cost since I'll be long. Sunk about 10k in so far.