Gregory Bergman
Editor-in-chief, CapitalWatch
Thanksgiving for my family, like for so many American families, is filled with tradition. Some traditions were fleeting, like when my mother (in what can retrospectively be viewed as decades-early support for an Elizabeth Warren presidency) placed a giant feather in the middle of the table and handed out small headdresses for each of us to wear, remarkably fitted to our heads.
The Native American iconography was not just meant to mourn the millions of Amerindians subsequently murdered by their European dinner guests but was also a celebration of our own Native American genetic history—all 1/1000th of it. (Cherokee, I think?)
While that tradition didn’t last, the one that did stick was one no doubt one shared by many American families: The tradition of each family member announcing at least one thing for which they are thankful prior to commencing the feast.
Now, should you be unable—either due to a lack of creative thinking and/or sudden and unrelenting hardship—to arrive at a thoughtful, specific answer, you can always just resort to saying you are glad we are all together.
This Thanksgiving, with so many families unable or unwilling (often smartly), to get together during the holiday, such a historically lazy and obvious answer has been suddenly endowed with real meaning. No matter who you are, this Thanksgiving we should all be thankful we can see our family (even if it is by Zoom). We should be thankful that we have a family. We should thankful that we are alive.
Now, for those of you who are active investors, there are some more specific things to be thankful for. Here's a list:
1) Donald Trump
Look, no matter how you feel about the man, no president has offered so many investors so many obvious and near-guaranteed short-term trades. Using Twitter like a cudgel, his capriciousness was on full display for four years. Following a Trump tweet about a company, be it a proposed boycott or ban, and an clear put option play comes into view, like a 3D image in one of those seemingly chaotic and pictureless posters you used to find in places once called “malls.” The most recent was his executive order banning stocks he deemed tied to the Chinese military. An obvious put option on China Mobile (NYSE: CHL) appeared squarely into view.
2) Getting Rid of Donald Trump
So called “boring” Biden will offer the exact opposite of Trump in this respect. He will not pick winners and losers (at least not publicly) and will offer a distanced approach instead, as President Obama did before him. Long-term investing sans the fear of being a Tweet away from disaster will be just what the doctor ordered to navigate this uncertain time. Of course, Trump will leave us with one parting gift (if he leaves us at all): One more play on the VIX and/or shorting opportunities when they have to drag him out of the White House kicking and screaming. And shame on Mnuchin, whose nakedly political act Friday was an act of supreme and dangerous pettiness.
More than Trump or Biden, the benefit of a divided government (or barely Democrat-held government should the Georgia runoff go the Dems way), the chances of a Biden-backed Warrenesque breakup of Amazon (Nasdaq: AMZN) is very unlikely. An easy bet on Bezos can now be made for the next four years even if, despite the recent foray into the pharmacy business, Amazon doesn’t monopolize a big chunk of the pharmaceutical business on top of everything else. Amazon is a buy.
3) Zero Commission Fees
True, they have been around a long time, but apps like Robinhood.com are more user-friendly than ever before. Of course, it is vey annoying that while on Robinhood,com, you can trade Bitcoin (it will go to 20k, yet I sold most of my petty position at $18,700 after getting in around $15,300), but you cannot trade OTC stocks. The user-friendly interface has enabled millions of new traders to win—and lose—on zero commission trading. Of course, make sure you understand how the margin stuff works so you don’t kill yourself like that Alex Kearns, 20, who did himself in after he saw his account drop to negative $730,000 after a wildly speculative trade. Of course, he didn’t lose that much as the trades were incomplete and his account hadn’t shown his updated balance. Oops.
4) Vaccines and Vaccine Stocks
When, in what will hopefully be an in-person learning environment, the year 2020 is taught in history class decades from now, it will be known as the Year of the Vaccine. Social unrest, political tribalism, and racism vs. anti-racism will be but footnotes. This will be the year that mRNA vaccine technology proved itself to be not only viable, but extraordinarily effective. The year that humanity was able to take a huge leap in defeating and preventing viruses in the future by our ability to create codes to give the body instructions on how to fight off an unwelcome viral invader. Investors can continue to play a part in this triumph, by investing in the Modernas and Pfizers and AstraZenecas of the world. Profits have and will continue to come from such investments. We could call it the of the BATs (Baidu, Alibaba, and Tencent) as a snide double entendre and be far from inaccurate. But I think the Year of the Vaccine is a both more diplomatic and more inspiring.
5) Re-Emerging Emerging Markets—and the ETFs to Play Them
Nearly all the ETFs I recommended in July in the article “V.I.R.U.S. Picks Around the World. Plus, Trump University…for Kids!” are up from where they were, some rising and falling during this period. There are so many ETFs to play the emerging markets—markets from national economies that will outperform the U.S. next year. China is the obvious one but look to other nations like Thailand and The Philippines to rebound quickly on tourism.
Brazil is another nation poised for growth. The battered Brazilian stock market offers real opportunities in the world’s 9th largest economy. This month alone has seen foreign inflow of almost $5 billion. The iShares MSCI Brazil ETF (NYSEARCA: EWZ) has popped over the last month but at about $32 per share it is still down significantly from its January high of around $48. Winter here is summer there, so do not expect the same level of coronavirus horror in the Southern Hemisphere over the next few months.
As for specific ADRs, go long on Banco Itaú Unibanco S.A (NYSE: ITUB) and oil company Petrobras (NYSE: PBRA). Warren Buffet’s bet on the emerging fintech/electronic payment processing market in Brazil, which is comparatively nascent, is a bet worth taking as well. That stock, Stone Co (Nasdaq: STNE) is up 170% from its IPO price but is still a long-term winner. Sometimes called “the Square (Nasdaq: SQ) of Brazil,” the upside might offer even better rewards for shareholders than its American counterpart. Electronic payment processing and fintech of this kind is a trend that will continue.
6) Covid-19 Will Fade, But the Trends Will Continue
That doesn’t mean that companies like Teledoc (Nasdaq: TDOC) are not way overvalued and will not see a decline in share price. I bought Teledoc, and I am down. I’ll ride it out and sell when I am whole. People don’t want to be at the doctor on Zoom forever. So not all stay-at-home stocks are going to keep rising in perpetuity without a significant pullback, but people will be working from home more than they ever did before, even after this is all over.
This means stay away from office REITs unless they reinvent themselves, and double down on residential REITs as the move to the woods from the mega-cities will continue over the next couple of years. And even if people move back to the cities, the “second home” buying trend will continue throughout 2021.Online real estate database company Zillow (Nasdaq ZG) has skyrocketed as has Seattle-based real estate brokerage Redfin (Nasdaq: RDFN), the latter of which I prefer on the recent pullback 3 to 6 month momentum buy.
7) Next Thanksgiving in Jerusalem—or Somewhere More Fun
The year 2020 is almost over, in and of itself a reason to be thankful. Now, I hate airlines—and there is no rush to buy airlines on the post-Covid recovery. With cases rising, there will be another pullback when you can pick up them up. Investors can also thank Americans’ warped conception of “freedom” for not listening to mask guidelines and offering up another buying opportunity as cases rocket to new highs, irrespective of Biden’s new “tone” and any attempts he makes to quell the surge.
But we will be traveling this time next year or before. Sorry, Mom, New Hampshire is lovely, but I think next year a more tropical locale after the 2020 nightmare is warranted.
Of all these stocks, I like SkyWest (Nasdaq: SKYW). You have probably flown SkyWest without knowing it. They are a major airliner with more than 500 planes and 14,000 employees servicing flights for Alaska, American, Delta, and United. Oh, and while American Airlines burns through cash like a drunken sailor (or a cruise ship company), SkyWest turned a $30 million profit last quarter. At $37.61 per share as of midday Friday, their stock is up $12 per share over the last month, but it is still down from $66.20 per share at its mid-January closing high.
Delta and Jet Blue and Southwest and the others you can buy now and hold or wait. Of the big airlines, Southwest will see the most near-term appreciation; it is a well-run and well-liked airline. I like Spirit as well, a riskier bet but a long-term play for maximum share price appreciation. But eventually, Americans will fly the discount airline Spirit even though they hate it—just like they did pre-virus. That said, why not just buy the most well run of them all in SkyWest? (And yes, I still like cruise stocks even thought they will keep falling. The upside to their post-virus potential highs are just too good to avoid.)
And so, remember these seven reasons to be a thankful investor this Thanksgiving no matter where you find yourself. This won’t be the last Black Friday, but it hopefully be the darkest one for some time.
Gregory Bergman
Editor-in-chief, CapitalWatch
(The opinions expressed in this article do not reflect the position of CapitalWatch or its journalists. The analyst has no business relationship with any company whose stock is mentioned in this article. Information provided is for educational purposes only and does not constitute financial, legal, or investment advice)
