Does the market react to riots in the streets of many American cities? Or is the market as heartless to the pleas of many for social justice? Is it condemning police brutality of making judgments about violent protest vs. peaceful resistance?
I think many people wish it would. They want the market to be part of the debate, for it to play a constructive role in the dialogue over racial equality. Doesn't it see the institutional racism and the inequality of opportunity?
The answer, though, is there is no "it." The market is blind, because it has no eyes. It doesn't hear, because it has no ears.
That doesn't mean investors themselves don't make judgments. But until a recent generation has risen up to invest with their heads and their hearts, almost all investing is done with the prospect that individual companies might prosper and you want to invest in the long term -- to invest in the companies that not only won't be hurt by the protesting or by Covid-19 but that have trends supporting them that can't be stopped by either. Some companies we have identified in our Covid-19 index have been beneficiaries of the illness because of the changing patterns of work and health it has forced upon us.
It's the investors that can be regarded as myopic. But if you are myopic, you might do better than those who are cognizant.
Classic example: China. You may be furious at the Chinese for not being as helpful as they should have been as I am, but unless the president takes actions against China that end up hurting our companies, it might not impact your portfolio. I, myself, have been deeply worried that our president has gotten so hardline against China that he might jeopardize our special relationship with Taiwan, which has semiconductor technology that is vital to American interests. I care about what will happen to Nike (NKE) , Starbucks (SBUX) , Apple (AAPL) , big visible companies that do a ton of business in China.
Other than that, though, anger at the Chinese does not translate to making money. Let's not forget, the more money you make, the more likely you can contribute to the causes that you care about that have nothing to do with this instrument and its lack of causality.
I am mindful of the curious interaction of the violent protests and the impact on work and the virus. I am not condemning the peaceful protesters for exercising their right to congregate and speak their minds. I am mindful, though, that congregating breeds this illness and that unless you practice social distancing and wear masks, neither of which were evident, particularly the former, you can expect a spike in illness. It's also another reason for companies to keep employees home and for employees to be grateful for the chance.
So, let's think about individual stocks that are not heartless or mocking in their trajectories, but are very much beneficiaries of the stay at home portion of the pandemic.
First, is Zoom Video (ZM) , up more than 20 points. Zoom reports Tuesday. Out of nowhere, Zoom has become a very big part of our lives. The ease with which it works, the "fremium" model and now the heightened security to curtail the Zoom bombing, all make this the obvious of choices to benefit. If you want to know what's different from previous markets, it's the possibility that despite Monday's run-up, you actually might be able to make money when it reports. In 40 years of investing, it is very rare that it is anything other than a sucker's bet to believe you can buy high, 25 points high, and believe you can sell higher. But in this crazy market, anything can happen.
Now we know that, as safe as Zoom might be, the work-at-home movement has created a tremendous cybersecurity risk, because people are spread out and may not even be using systems that are protected. That means cybersecurity is so important that the companies involved can make much more money than anyone expected, including the analysts that follow them.
Last week, for example, we brought on Jay Chaudhry, the CEO of Zscaler (ZS) , one of the primary insurers of remote security after his company's stock ran big after a quarter that was one of the best of the year. I wanted him on because I knew that in this market, this robust, bull market in cyber security -- not a bull market in a bear market, but a plain old bull market -- this company that does amazing password protection and reported a terrific quarter, again worthy of a multiple-day move given that the likelihood of stay-at-home work only became more pronounced, because of the protesters and because of more fear of Covid.
Again, you have to understand not why the market isn't sensitive to what you want it to be sensitive, too. You have to understand that it can't go down as long as there is a level for enthusiasm for the Oktas (OKTA) and the Zscalers or the Fortinets (FTNT) and Proofpoints (PFPT) for that matter. Crowdstrike (CRWD) , which reports after the close Tuesday, in particular stands out as made for this moment hence its spectacular run that continued Monday.
There's been fear to shop and a fear to leave the home, something that, like it or not, causes people to further adopt Amazon (AMZN) . Again, in this tape, a likely set of keystrokes to order something from Amazon translates into keystrokes to buy the stock of Amazon. Yes, you want to throw business to small business, but most small businesses remain closed driving the funnel toward Amazon, so its stock has still one more amazing rally. Heartless? No, expedient, yes.
Is there a day that goes by that we don't hear of some sport that is about to open up? A market with an incredibly keen eye for the obvious, seizes on DraftKings (DKNG) as the only way to invest in the concept. So, no matter what, there are new buyers and far fewer sellers until the stock reaches ever loftier levels? Is the company worth $13 billion? Is the stock of Tesla, up $45 now, overinflated? The question is irrelevant to this set of buyers.
And who else has joined the stay-at-home crowd, or caters to them because their brick-and-mortar shops still haven't opened? How about the shops of Facebook (FB) , an amazing initiative that should add a very big chunk of growth, some say as much as 300 basis points, to what many thought what the flagging Facebook, a victim of the cut in ad budgets from many companies facing recessionary times.
Finally there's DocuSign (DOCU) , the abettors of the stay-at-homes, a company that reports Thursday and, a should that should be up 100%, for the year, but in this tape may not be, as there always seems to be new discovers of the product and its stock, one that must be used and the other that must be bought.
No, it's not that the market is unfeeling and oblivious. It's the buyers who are oblivious to the lack of risk to purchasing stocks of companies that have run and run and run and run some more. You can't criticise them for what they are doing, though. It's been making them money, even though it's not helping anyone or anything except the existing owners. The market's conscience is non-existent; the buyers fear equally non-existent if the company abets the stay at homers, who don't have to journey beyond the confines of their friendly walls.