The score will take care of itself ~ Bill Walsh

11ish Investing

COVID V2; HOW TO PREPARE FOR ANOTHER DISASTER​

Rather than the usual content that I’d put out, I thought it’s really important and timely for us to talk about what might happen in the next 2 to 3 weeks. Like anything else, you don’t have to agree with me in execution, but I think it’s worthwhile for you to hear the prevailing fact so that you guys are kept in the loop and can be more informed about deciding on your next move. 

 

Of course, I’ll share with you thoughts on my own portfolio and my recommendations as well. We’re all in this together and the point of 11ish is a collective for us to help each other make money.

 

Likelihood of History repeating itself.

Historical speaking, the last time a serious pandemic like this happened (Spanish flu). It had THREE waves and considering countries like the US weren’t exactly heeding the cautions of the science community, I thought the chance that shit will hit the fan be pretty high. This is why for you subscribers who have been seeing my past videos, I mention COVID as a risk in a lot of my stock discussion videos. Saying it’s a great opportunity if there isn’t a COVID round 2. This has led to at least one person to tell me “shut up COVID” actually I’m not sure if it’s a race thing or because he doesn’t believe in COVID, but either way I found it amusing 🙂

 

 Well it sure as hell looks like V2 is coming soon. I present you exhibit A & B.

 

Exhibit 1:

China, the country that, imo, has the MOST control over their citizens just relocked up Beijing. Locking up the capital is no joke, guys. That’s usually reserved for military parades and when shit going seriously wrong.  “Beijing officials have also re-closed schools and locked down some neighborhoods. Anyone leaving Beijing is required to have a negative virus test result within the previous seven days.”

 

This gives me the distinct impression that we still don’t fully understand COVID and its transmission behaviors. Add that on to the fact that we have like 10 different strains of COVID (show picture), I’m seriously concerned. 

 

Exhibit 2:

“US travelers ‘unlikely’ to be allowed into EU as bloc reopens.” You might think this is an amusing dick move by the EU because they hate trump and frankly I’d prefer that. Because the truth is COVID is on the rise, and EU doesn’t want our germs.

The US has the highest number of coronavirus deaths and infections in the world. As of Friday afternoon, at least 2.4 million had been infected in the country and 124,891 people had died, according to the Johns Hopkins University Coronavirus Resource Center.”

 

I mean if you have individualists who is ignorant about how a world economy functions and all of their fucks are reserved for personal comfort #americanWay , did you expect anything different? Frankly, I’m sympathetic that any world leader have to make these tough decisions of when to open or close when you have people suffering with ANY option the country take, but it looks like now it’s time for us to pay the piper.

 

Trump at one point said he’s not closing the country again if second wave hits.

Yes, he said he’ll put out fires as they come up, but It takes balls to articulate that hard of a line when the US COVID chart has become so bad. Therefore, I have my doubts. (I also have my doubts because who knows if he’ll be in office longer than COVID will be a crisis.)

 

 

So what does this mean for us investors.

 

The last covid dip cost us 40% to 60% depending on what you held. For the companies that have a very front facing physical component to their business, like cruise ships, theme parks, casinos, and manufacturing, I’d recommend that you reduce your positions if you don’t want to sit through potentially a 3 month massacre. If this extends another 6 months, you should start confirming the survivability of the companies that you are investing in. If you invested in companies that have deep pockets and a diversified business, like Disney, I’d hold and average down on the dip. 

 

One member of the 11ish collective asked about my thoughts on the RVLV. If I wasn’t concerned about the 2nd lockdown, I’d totally agree that it is a reasonable speculative bet. Their top-line looks good, they are growing brand awareness, but they have pretty high operating expense and I just can’t see who is buying trendy clothes right now. Although I’m not into seasonal fashion, so take my words with a grain of salt. 

 

Secondly, I’d also consider investing in Peloton again because as I said in my first video, if lockdown extends -> their business will boom. Well even if the 2nd COVID dip isn’t happening, there are still plenty of places locked down, so I’d buy.

 

Third thing I’d do is prepare for a full blown recession. Most companies do not have enough money in the bank to survive such a long hold out. If you have the insider ear like I do, MANY MANY private tech companies are trimming down on headcount. That’s bad sign #1. Second bad sign is a lot of companies holding off on IPO is suddenly going IPO. that’s a bad sign too, because they don’t want to IPO during a recession and the golden hour is about to end so here we are. 

 

P.S. I don’t recommend that you invest in any IPOs unless it’s a recession resistant industry.

 

I’m usually a positive guy who see upsides in everything. But there is time to cover your ass, and I truly believe now is the time. I’d love to hear your thoughts on this.

 

Some additional text-book recommendations are: GLD, SLV, LMT, MSFT, AMZN and stay away from the options game

 

Sources:

https://www.google.com/search?q=us+covid+chart&oq=us+covid+chart&aqs=chrome..69i57j0l7.37157j0j7&sourceid=chrome&ie=UTF-8

https://www.cnbc.com/2020/06/11/russia-lifts-restrictions-ahead-of-victory-day-and-constitutional-vote.html

https://www.theguardian.com/world/2020/jun/15/beijing-lockdown-tightens-as-new-coronavirus-outbreak-spreads

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