Hi All, I'm a long term investor via Mutual Funds for the last two decades. But given these unusual times and time on my hands I took to investing directly in stocks. Here is my situation and I'd like some advice on how you would proceed. To be clear I've got enough money in Mutual Funds, 401K, IRAs etc and the stock investments was just because I had a pile of money in a MM account. 1) Bought airline stocks in the big 3 (AAL, DAL and UAL) when they were down 50% only to see them go down another 50%! They've recovered enough so that I'm breaking even with DAL and UAL and up 30% with AAL. What would you do? I'm particularly concerned about AAL. 2) Bought a lot of mid stream oil/gas companies at their low (MMLP, NBLX, WES) and some producers (SSL, CVE) right at their bottom and they've all essentially at least doubled and even tripled. Do I cash in the gains or just hold them for the long term. 3) I've got some more cash to invest but I'm struggling to find an undervalued sector. I've been investing a bit in hotel REITs. 4) Lastly and certainly not least, I have a whole bunch of stocks of varying sectors (cruise ships, restaurants, retail etc.) which were all badly hit by COVID 19 and I've now doubled my money on them. I timed their bottom by chance. Do I just hold them and hope for no second wave or cash in and wait for the second wave. A lot of these stocks (particularly the restaurant stocks) are really small companies with <<$100M caps so could easily go bankrupt if a second closure happens. Thanks.
Well,... If it were me,... So take caution from that,.... I would sell the pigs and the winners both, hope to balance on the backside and with a profit. A lot of your pigs you mentioned are not going up for the long run anytime soon, so don't fight the trend. Make your next moves carefully and don't hold too long. Forget watching the metrics, because everyone is screwing the system especially the treasury and fed. That's why the world economy is so wacked up. That's the world we live in. There is no hodl here for me. The markets can remain irrational longer than you can remain solvent. Again, do not take my advice, I am not a pro.
And yes, second wave of round one is here. Look at Texas, Arizona, Florida, Utah, and a couple others. Their first round of infection rates have gone parabolic just this last week. Nothing has changed since February so why is the market so uppity up? Read my last post.
Thanks. Just to understand, you think the market will regress and its better to sell now whilst the market is high? Is that right? Thanks again.
I currently am positioned for the next recession I am projecting for at or after Q2. I have no love lost fort current "great rebound" the last few months. Look at the next GDP, unemployment numbers, and of course the next hotspots to capitalize on. A double dip recession is not just a phrase but the definition of double dip describes the scenario were are closing in on. I am not a FOMO kind of investor, so any gains are planned and any losses forgiven in order to move on. Look to your big Buffett style investors, banks, and brokerages. They are all sitting in huge unprecedented piles of cash. If there was easy money to be made, wouldn't you be inclined to believe that those investors would already be in it? But that's just me.
UAL and DAL are positioned to survive. Survive. Not make profits or break out any time soon. AAL has the weakest position, whereas DAL had the best prepandemic balance sheet. LUV is also better than some of the smaller carriers. JBLU will probably survive. Look for a few of the smaller carriers to fold, or merge. REIT are down. Rents have not been collected. Vacancies are up. Good time to buy low and sell high. Mortgage REIT may catch your attention. With low rates, people who do have money will shop for discount financing. REIT in medical buildings, cell phone towers, data centers, casinos, storage lockers, have done better than malls. Single tenant, net lease have been fine. Strip malls anchored by grocery stores have been mixed. Gas stations are good. Prisons have gone down, and present a politically incorrect investment. Private prisons became an industry because of government. Bipartisan budget cuts and the move to subcontract. It doesn't matter who wins office in November. The choice is to reopen government correctional facilities at higher cost, release inmates and reduce sentencing, or quietly allow private prisons to grow. Yes. Grow. As the industry has already been able to takeover other correctional divisions like inmate early release halfway houses, plus ankle monitor tracking for pretrial accused, convicted probation, and immigration status pending. They ugly part is where they also own the border detention centers housing children. Get rid of the cruise ships. Restaurants and retail will be down. Even the largest restaurants can't make half their prior revenue without dine in service. Fashion and other retail will be down for a long time. Groceries, drug stores, home improvement have surged. Everyone made money from Costco, Wal*Mart, and Target. Warren Buffett has also been buying into Bank of America. Should you? Big banks will be fine. The stock is low. Buy low, sell high. Surely the economy will trend up, and banks will emerge the victors. When you buy your next home or car. They will finance it.
