The recent market volatility gives investors a lesson about the merits of long-term thinking and investing. – more on that in the “Overall Market” section.
Beyond the overall market, a new battle has emerged. Grocery stocks are battling restaurant stocks in the coronavirus arena. Who is winning? — more on that in the “What’s Up?” and “What’s Down?” sections.
Oh, by the way, what’s the correct question to ask during the coronavirus-induced market turbulence? — more on that in the “Water Cooler” section.
But, first, here is a recap of what happened in the market yesterday:
- U.S. markets: All three indices finished Thursday in the red. Scroll down to the “Overall Market” section to read more.
- Cryptocurrency: Bitcoin’s price was hovering near the $9,000 mark by the end of the day on Thursday thanks to heightened network activity in recent days.
50-cent “Stealth ID” Stock Lifting Off
Just a month ago a “Secret $.50 cent Defense Stock” quietly IPO’d.
This new device — greenlighted by Trump’s Executive Order EO 13769 — combines AI and machine vision to end terror attacks and mass shootings…
Long-term Investing Mindset…
The doom and gloom news is widespread, and rightfully so. There are reasons to be worried about global health and its impact on the world’s economy. However, we are nowhere near the end of the world vibe of the media and the stock market.
Take a look at the 1-year return of the stock market in this chart:
Even with the recent decline, had you invested in the stock market a year ago, you would have grown your wealth. A long-term investing mindset prevails in the worst of circumstances.
Pantry Panic Buying Continues.
So, what happened?
Shares Kroger (Ticker: KR) were among the winners of the so-called pantry panic buying. The company’s shares were up more than 7% on Thursday. Kroger released its latest earnings results, and the management discussed how sales of canned and pantry food are up which will result in higher revenue in the next quarter.
If you bought on the WORST day you made 400%
Stansberry says this new trend is going to cause tens of millions of people to lose their jobs… it will also cause many major bankruptcies… yet at the same time it will make millions of others, incredibly rich.
Restaurants Are The New Losers.
So, what happened?
Shares of Texas Roadhouse (Ticker: TXRH) were down more than 10% as coronavirus keeping customers away from dining out. The otherwise strong performer wasn’t the only restaurant that felt the heat of the coronavirus.
We scanned the market for restaurant stocks with strong operations and fair or undervalued share price, and in addition to Texas Roadhouse, McDonald’s (Ticker: MCK), Wings (Ticker: WING), and Domino’s (Ticker: DPZ) jumped out.
The Correct Question To Ask …
So what happened?
Question: Will stocks decline in the coming days and weeks?
Answer: Wrong question to ask.
Question: But, I want to know that so that I can decide what to do with my investments.
Answer: This is entirely unanswerable. We don’t know how the Covid19 progresses, and we don’t know how governments around the world react to it. And, we don’t know how investors react to those two variables. Asking such a question is futile.
Question: So, what do we do, then, and what do we ask?
Answer: Ask which stocks are becoming undervalued that have the revenue, profit, and cash-generating power that can weather the COVID-19 storm.
Let’s start asking the right question. This paragraph is inspired by Howard Marks’ latest Memo.
Source: Trade Stocks