Do I know where it will bottom? No. Because this is a biological crisis. But do I know what to buy and sell.
Many of you are out of cash. You ride around with a full plate of stock.
Others of you have cash.
We are putting money to work today because we haven't touched any of the money we came into this week with and we've waited and waited to do so. We have no choice now. We have back to back days where the down ratio is so much bigger than the up. Ten times. That's highly unusual. And positive. We can expect more bad news this weekend about more outburst. We may even see a world leader get sick which would be very disconcerting.
But this is the time to high grade your portfolio, take some losses and move to better stocks. If you own a company involved with travel or leisure or autos or housing, your company will probably miss its numbers and go down. Go down from wherever it is at this moment.
They should be sold.
What should you do with the proceeds? Some of it must remain in cash so you are ready for next week if there is more bad news.
But the rest can be put in the gold stocks because they are getting hammered - here I am thinking Barrick (GOLD) - run by Dr. Mark Bristow, the best miner in the world. You don't want a gold fund; too many bad ones, you want to swap out of a hotel or cruise stock and buy a high quality drug stock with some yield like AbbVie (ABBV) or Abbott (ABT) which is more of a medical device play. You should consider Coca-Cola (KO) . It just reported an excellent quarter and it has lots of firepower.
If you own an oil company I can't help you. They are cursed especially with oil down here. The likes of Occidental (OXY) are just terrible.
I would much rather own a supermarket staple or a Moderna (MRNA) . The latter does have a vaccine in place that will be put to use immediately because the vaccine is real. Before Dr. Fauci was silenced by the president he seemed optimistic something could work with it. I like that.
For yield I like that Verizon (VZ) and AT&T (T) are down. That may turn out to be a gift. I am confident that AT&T can maintain that yield because it has excellent cash flow. It's really down way too much. Verizon is among the steadiest stocks there is. Buy one.
No matter what I am urging money in. I have my 401k largely in cash. That's not right. I do so in stages. This is stage one. There will be more stages. I am ready.
Again, if you need cash make the switch but keep some cash for next week. You will probably need it.