What can be bought? What must be sold?
At any given time, even in this wacky one, there are companies that are doing well, companies doing OK, and companies that are doing poorly. Then there are companies that are doing terribly, but will do well when we go back to something that looks like normal.
The Holy Grail? Companies that are doing really well -- I mean crushing it -- now and will do well after the smokes clears because they are riding a secular trend that can't be contained even by Covid-19.
We have some quick and easy templates. One of the things we have discovered is how easy it is to use Zoom (ZM) . Even doofuses like me can use it: Alphabet's (GOOGL) Google Chrome, click on the url etc., etc. and you are in. The quality is good and will only get better when we get to 5G. Zoom is a necessity right now, it could end up being a necessity in the future for different reasons.
First, we have discovered that as much as we like to be with each other, it' not the end of the world if we are not. Plus we save travel costs, and we are able to cut back on carbon emissions by staying at home. You also gain a hour or to two that you might have lost in traffic. CEO Eric Yuan is a hero here. Cisco's (CSCO) got an enterprise model that's great, too. But it has a lot of other merchandise that may not be selling as well.
I am blown away by how Nike (NKE) is doing. We got great numbers from China last night. That's a must on any weakness as we can the stock's not skipping a beat.
These are just imperative, so imperative that I actually feel that office building leases will be hurt by this. All of these are doing really well before, and will be doing well after.
Then there are companies that are doing well now and will do now in the future, because they are staples or drugs. I don't want to make it too hard. I would say Johnson & Johnson (JNJ) is the paradigm. Triple A balance sheet, good quarter, excellent pipeline. Remember JNJ, unlike, say, Zoom is not doing really well, it's just doing well.
Now, who is not doing OK, but should do well when things get better? I would say Apple (AAPL) . China's coming back on line, Europe will eventually and so will we. When that happens I expect demand will be even stronger than it was before. That's why the Deutsche Bank upgrade resonated so much. It can be bought.
Facebook (FB) on the other hand is doing not well -- numbers were just cut -- but could bounce back. That's not as strong as Apple, but might be work buying if it is low enough. Turns out that Facebook is a lot more cyclical than we thought.
Then there are the real losers, the ones that might never recover. The cruise line stocks are all roaring because the bill apparently has something for them. My take? The government can give the cruise lines all the bailouts they want, we have learned that cruise ships can be incubators and our biggest fear right now is getting Covid-19 from someone. You have 4,000 people on these monster cruise ships. Who knows who has what?
I think they are cyclical and secular losers. My wife and I were about to take a cruise before this happened, because some levels of the ships seemed like the life of the old Cunard lines that cross the Atlantic.
Now I just have a view of a ship searching for a port that might take them.
That's the opposite of Zoom. They are all sales.