Covid-19 trading in any security from a Bond to Bitcoin requires understanding this uncertain and volatile environment. The Wuhan Coronavirus is a Biological Chernobyl that has changed consumer behavior and the way assets are valued. Not since the 1930s have we had a full reshuffle of the deck.
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One of the most important things for investors to realize is that the initial imprint is behind us as we complete our “shelter in place ” lifestyle to ensure chocking off the virus. We will emerge from a Mini- Marshall Law period over the next 90 days of April through June (Q2 – 2020) and must pay attention to the way we buy goods and interact with others. History shows the consumer will emerge differently.
- Owning FANG stocks (Facebook, Amazon, Netflix, Google) was a cycle
- Core Portfolio Changes are already here
- DAWN Stocks (Dominos, Activision, Walmart, Nvidia) is the new cycle
- Look around at Consumer Behavior
- Emerge from Old World Investing
- Portfolios Reflect a Covid-19 World Now
The analyst/investment community coins the phrases “FANG” stocks or “DAWN stocks and invest accordingly. Most of these new DAWN like core portfolio shares have already moved and could be in for a long investment cycle. The FANG investment cycle lasted 5 years through the final stage of the 9-year bull market and served many portfolio managers well, and I expect DAWN will do the same.
We are in an unusual period in investing, and we will all look back at some point, and recall exactly where we were at the time of the Covid-19 period during the First Quarter of the new decade.
We will recall where we lived, who we were with and these memories will be embedded in our psyche forever as we emerge from a shelter in place society that had an invisible enemy in the form of the Chinese Coronavirus. FANG to DAWN will be an investment memory that identified the transition in consumer behavior and signified a change in the way we look at assets.
