5G: Conspiracy Theory or Next Greatest Investment?
Wealthpress Head Trader Roger Scott and CounterVest.com founder Joshua Belanger join Midas Letter to discuss the “relief” rally in markets as COVID-19 fatality rates are reported to be lower than previously anticipated.
The S&P 500 Index (INDEXSP:.INX) has rallied more than 25% since the large market correction in March due to the pandemonium and uncertainty the virus caused.
However, data being released this week is starting to look a little less rosy. Company earnings are reflecting the toll Coronavirus has had on the economy and unemployment data is expected to decline for a third straight week. April’s US Non-Farm Payrolls report is expected to show around 20 million people have lost their jobs in the USA alone. To put that number into perspective: that is more than the entire work force in Canada or the total population of Australia.
Due to these negative statistics and the fact there is no immediate Coronavirus cure or systematic testing in place, the trio are expecting a wake-up call in markets with increased volatility in the short-term.
There are 96 S&P 500 companies reporting their financials this week which will give a clear indication of what the economy will look like moving forward and how companies will deal with the changes the Coronavirus has thrust upon them.
There are four opportunities in which traders can profit from the current market conditions. Traders can invest in:
1) Companies with inelastic demand during the Coronavirus crisis (products people need). Examples: Quest Diagnostics Inc. (NYSE:DGX) – The company says it can now perform 45,000 tests per day, providing results in as little as a day. Teladoc Health Inc. (NYSE:TDOC) – The only listed company in the U.S. providing health and medical consultation services via telephone and video calls.
2) Companies with slashed valuations due to the Coronavirus, with expectations of an eventual rebound (Long-term plan).
3) Companies with large insider buying. Companies where management have put their money where their mouths are, so-to-speak. When company executives invest back into their own companies, this is an indication that company future prospects are better than perhaps what the average investor can see in them. Examples: Williams-Sonoma, Inc. (NYSE:WSM) – Company Director bought 9,600 shares on April 9 for an average price of $50.55. The share price has increased 2.16% since then. MGM Resorts International (NYSE:MGM) – One company Director purchased 1.6 million shares worth over $19.6 million. Another company Director bought 522,000 shares worth $5.9 million.
4) Next generation communications. Examples: Telefonaktiebolaget LM Ericsson (NASDAQ:ERIC) – Company has delivered the fastest 5G speeds globally. Zoom Video Communications Inc. (NASDAQ:ZM) – Video conferencing needed for remote collaboration where shares have surged more than 120% due to the Coronavirus.
Watch the full video to learn how to invest in todays market with both short-term and long-term goals in mind.
Midas Letter is provided as a source of information only, and is in no way to be construed as investment advice. James West, the author and publisher of the Midas Letter, is not authorized to provide investor advice, and provides this information only to readers who are interested in knowing what he is investing in and how he reaches such decisions.
Investing in emerging public companies involves a high degree of risk and investors in such companies could lose all their money. Always consult a duly accredited investment professional in your jurisdiction prior to making any investment decision.
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