What bounces best? What stocks can I suggest that make sense in the new stay-at-home era? You can have all the obvious ones, the staples, the stuff you have to stock up on if the epidemic sweeps through the country, something that the market suggested would happen when it was at its lows. I do think those lows can be revisited, because there can be no assurances that more people will pop up who didn't go to China and don't know they have the illness. We've got one, in northern California, who probably touched dozens of people in the period when he was asymptomatic and then when he was really sick, but poorly diagnosed.
Where there's one there's probably plenty and we know the drawbridges are down. You can't wall off people from every continent other than Antarctica. You can't stop someone from hopping on that nice United Arab Emirates afternoon flight from Milan to JFK and isolate them at baggage claim.
That's why we have to expect selling Friday, because the weekend is unlikely to bring us good news, especially because we know that the Centers for Disease Control and Prevention, which I do trust, is saying that it's not if, but when.
I am likening it to when I was a little boy before we had a vaccines for chicken pox and measles. You knew you were going to get them. You knew people died from them. Still do. It was incredibly frightening, but there was nothing that could be done. You just didn't want to be one of the people who died. We then got a vaccine and now only the people who don't believe in vaccines run the risk of killing their children.
I am not a doctor. I am more of a little-value-added Googler and CDC watcher. But what I do know is stocks and I know the companies that come on air and I know which ones I like, including some today.
So what I have done is craft a list of 10 stocks that, to me, work while we wait for a cure or a vaccine or the darned thing to run its course. This portfolio is different from what we have heard all day today about when growth slows, because of the virus. It is also different from the staples l like, a vital part of a portfolio. This list is about tech, because I think that if you can find stocks with solid long-term secular themes that have high growth that is not dependent upon China for that growth, and, most important, lives large in the new stay-at-home, work-at home environment we have now, then we have dips you will have something to buy. I am including a couple of stocks that I have liked for the last three weeks that have now run too much but in a pullback I think you will make some money.
I am doing these in alphabetical order, so there are no favorites played.
First, is Adobe (ADBE) . I have always admired their products and the company has empowered more small businesses and students to develop e-commerce internet that I think, even as it has an enterprise component it is the best of the cloud kings. Like that Morgan Stanley bumped its price target from $410 to $450 today right in the teeth of the sell-off.
Second is Etsy (ETSY) which is on "Mad Money" tonight. I was looking for stocks where people can work at home and used the product and Etsy works for both buyers and sellers. It just had a remarkable quarter as you will hear soon. An ultimate remote stock.
Third, while it has gotten too high, Moderna (MRNA) is a company I've been behind for a 100% gain. Why do I like it? How about the fact that Dr. Tony Fauci, the greatest immunologist, was shocked at how fast they developed the potential vaccine for COVID-19. You shouldn't be shocked; I have had them on twice and they have unlocked RNA and used Amazon (AMZN) Web Services to compute the most likely outcome.
Fourth, is Nvidia (NVDA) . It had a remarkable quarter. Its products are used for gaming and data centers and machine learning and artificial intelligence. None of these will be stopped by COVID-19. Data center will only grow. Gaming is ultimate stay at home fare. I don't want to risk owning an individual gaming company. This is better.
Fifth is RingCentral (RNG) which is the company that helps companies have employees stay in touch with customers wherever they are and however they want to be reached. We are blown away by the software as a service business that Vlad Shmunis has built.
Sixth is Shopify (SHOP) . This is another at home and small business empowerment story. So many people work from home and sell from home and they use Shopify to do it. You are getting a rare, market-related, exogenous pullback. Start here. This is the most sought-after company in the Valley -- except it's Canadian and fiercely independent.
Seventh is Square (SQ) , another small business enabler that just reported a remarkable quarter. They have viral growth of the cash app, they have remarkable payments processing business with a terrific loan feature that 's tied right into the register. And MoffettNathanson analyst, Lisa Ellis, the axe in the name believes it could be a takeover candidate.
Eighth, we had Teladoc (TDOC) on Feb. 5 and I immediately pounded the table on the darned thing because of the coronavirus and the economics of their model. The stock was at $104 and it is now at $138. It will pull back. It's a real good company.
Ninth is Trade Desk (TTD) , which is also on tonight. This is the company that's most levered to cord cutting, perhaps even more than Roku (ROKU) . It's an online advertising technology company that's needed to reach the coveted younger demographic in an era when they are abandoning TV in droves.
Finally 10th, the one I have backed until no end: Zoom Video (ZM) . Partners with everyone. Stay at home and work. My total fave Eric Yuan said on the show, the phone is ringing off the hook. It's the No. 1 name to buy if it ever pulls back.
Remember, highest growth bounces back first. Highest growth with good balance sheets, like all of these, are what you buy when rates go down as they are long-dated assets that can be valued vs. the pathetically low 30-year bond.
They don't need China. They don't need the big enterprise spending.
I like them just the way they are.
