The One Stock to Buy Even If the Selling ISN’T Over

Keith Fitz-Gerald Mar 11, 2020
3 

Will the markets go up or down from here?

That is by far the most frequent question I’m getting right now. By phone, by email, via online comments… millions of investors want to know.

I’m not sure that’s is the right question, though.

All that matters is what’s happening with YOUR portfolio.

Up or down doesn’t actually matter.

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Many people find it comforting to talk about the markets, about politics, about China, the virus, Russia… seemingly anything but their money even though all of those things affect your money.

Social scientists say it’s because talking about specifics makes us uncomfortable.

We like to think we have this handled, but, honestly, that’s a stretch.

Most people hate talking about money because doing so requires us to be responsible for our actions. That stops a lot of people when it comes to profits.

They find it easier to blame others for their losses or their lack of results. What’s more, they view events around them negatively which only compounds the matter.

Take the coronavirus, for instance.

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The headlines reflect a constant battery of negative news… new cases, deaths, quarantines, terrible personal impact of one sort or another.

By contrast, I view them as a sort of reckoning. The virus will lead to new analysis, fresh understanding about virology, prevention, human contact, and yes, even curative efforts.

I also see newly emerging markets for air filtration systems, mobile robots capable of sterilizing airports and parked aircraft overnight. New immunotherapy that can stave off or even eliminate the prospect of such diseases.

The financial markets will learn to deal with each of those things, perhaps not all at once. But they will learn just as they have learned to handle terrorism since the horrific events of September 11, 2001 when four coordinated terrorist attacks rocked previously complacent nations.

Rather than focusing on everybody’s big picture and what might, try narrowing in on what matters to YOU and what WILL happen. That’s how you come up with real investment ideas and real profits.

This is as “old school” as it gets.

There’s no memorization, no tricky set-ups, no magic trading method.

Take big tech right now and, specifically, Amazon.com Inc. (NasdaqGS:AMZN).

The company’s stock been beaten down mercilessly and is trading 15.16% off the all-time high it set of $2,185 per share on February 11th.

Yet…

  • The coronavirus is likely to change consumer purchasing patterns forever, further reinforcing at home buying; Amazon can get you damn near everything you need. That’s certainly been our experience as we self-quarantine here in the PNW, incidentally. Recent surveys show that ~30% of Amazon’s online shoppers complete between 76% – 100% of ALL online shopping on Amazon. Fully 75% of Prime members consider themselves unlikely or very unlikely to cancel their membership and spend an average of $1,704 per year on Amazon, according to US News and World Report.
  • The company is a multi-national engineering titan, not the big tech player everyone thinks. It’s designing, implementing and operating entirely new industries including transportation, health care, even broadband satellites.
  • Amazon’s web services revenues rose 34% last quarter alone to $9.95 billion in a market that barely existed a decade ago. I think it hits $100 billion within three years, roughly one-third of the total $300 billion addressable market.

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Many people will argue that Amazon stock is “rich” and make the case that the stock is expensive.

Compared to what??!!

Amazon was trading at just $135 a decade ago and $425 five years ago.

Look, you know me.

I don’t get this excited about a lot of companies. In fact, I think most companies simply aren’t worth the risk, especially at times like the present.

But if you’re just starting out or want to build a position in a company that perhaps you missed out on the last run higher, this is the time to start that process.

Buy a few shares if that’s what you can afford, or consider options if that’s more your speed. Even a tech oriented mutual fund like Fidelity Select Software & IT Services Portfolio (FSCSX) is a great choice.

The profit potential is simply astonishing, virus or no virus.

Until next time,

Keith

3 Responses to The One Stock to Buy Even If the Selling ISN’T Over

  1. jean says:

    So disappointed that my financial person did not insist on my purchasing Amazon shares about 10 years ago.

  2. Nirodbaran mahakud says:

    hi

  3. Catherine Daniels says:

    What if you only have $5000.00 for investing? Do you buy a few Amazon shares or invest in something else?

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