{"id":14821,"date":"2020-03-16T20:13:30","date_gmt":"2020-03-16T20:13:30","guid":{"rendered":"http:\/\/mediashower.com\/blog\/?p=14821"},"modified":"2020-03-16T20:13:30","modified_gmt":"2020-03-16T20:13:30","slug":"the-coronavirus-stock-portfolio","status":"publish","type":"post","link":"https:\/\/www.mediashower.com\/blog\/the-coronavirus-stock-portfolio\/","title":{"rendered":"The Coronavirus Stock Portfolio"},"content":{"rendered":"

Today we\u2019re proud to introduce THE HEALTH AND WEALTH PORTFOLIO. It\u2019s four companies that we think will do exceptionally well in the coming years, in the aftermath of COVID-19.<\/p>\n

In brief, these four companies are The Clorox Company<\/strong> (CLX), Amazon.com<\/strong> (AMZN), Zoom Video Communications<\/strong> (ZM), and Netflix, Inc.<\/strong> (NFLX).<\/p>\n

We\u2019re all about blockchain investing, not stock picking. But you\u2019ll recall that our Blockchain Believers Portfolio<\/a> (which is looking better than ever) has the majority of holdings in stocks and bonds.<\/p>\n

As the stock market implodes, there is more opportunity than ever \u2014 provided you are willing to buy and hold for the long term. (It\u2019s going to be quite a while before the smoke clears.)<\/p>\n

As we continually preach, you\u2019ve got to zig while everyone else is zagging. Right now, everyone is zagging for the exit. Time to zig.<\/p>\n

To beat the market, you must bet against the market<\/em>. This is common sense. Here are four bets you might want to consider.<\/p>\n

The Coronapocalypse<\/h2>\n

First, a quick story. I was due to speak at several events this week as part of Boston Blockchain Week, including the Boston Fed. All canceled.<\/p>\n

Next week, I was scheduled to speak at the Global Blockchain Expo, the huge technology event in London. Canceled.<\/p>\n

From there, South by Southwest in Austin \u2026 you get it. EVERYTHING IS CANCELED.<\/p>\n

So I had an inkling this was coming before everyone else. And I see a bigger picture: It\u2019s not that the cancelation of these events will hurt the local economies. It\u2019s that without those events, deals don\u2019t get done. No new connections. No new sales leads. No new business investment. Everything slows down.<\/p>\n

Now we\u2019re all going to be working from home for the foreseeable future, and — let\u2019s be honest — worker productivity goes down when people telecommute. On top of that, all the kids are home from school and college, so parents have to babysit.<\/p>\n

All this against a backdrop of uncertainty: no one knows how long the Coronavirus pandemic will last, and our nationalistic approach to solving it means we don\u2019t have a good global response. So spending slows down, demand slows down, productivity slows down \u2013 all the makings of an extended recession.<\/p>\n

I say this all this with no trace of fear. I\u2019m not afraid of the virus. I\u2019m not afraid of recession. I\u2019m not afraid of death. I\u2019m not afraid of losing my job, my business, or my home. I see opportunity everywhere.<\/p>\n

SMART INVESTORS SEE OPPORTUNITY EVERYWHERE, ESPECIALLY IN TIMES OF CRISIS.<\/em><\/p>\n

Note I said \u201copportunity,\u201d not \u201copportunistic.\u201d Our mission is to find investing opportunities that bring \u201chealth, wealth, and happiness,\u201d as I\u2019ve been signing off every one of my columns since Bitcoin Market Journal <\/em>began.<\/p>\n

I hope the impact of COVID-19 is short-lived. But I believe this is an economic tidal wave that will hit us in stages. So as everyone is fleeing to get out of town, let\u2019s start laying down some sandbags and looking at companies that are not only likely to survive — but to thrive.<\/p>\n

The Clorox Company (Stock Ticker: CLX)<\/h2>\n

Two words: Clorox Wipes.<\/p>\n

Every building I enter now has a container of Clorox Wipes and an industrial-sized squirt bottle of Purell hand sanitizer. How can we possibly estimate the sales growth these two companies are going to see this year? There\u2019s one big difference: Purell is a private company. Clorox is public.<\/p>\n

(For new investors, that means you can buy shares of Clorox stock using any online brokerage like E*TRADE<\/a> \u2013 but know that we do not provide investing advice, only ideas. Do your own research and never invest more than you\u2019re willing to lose.)
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Courtesy <\/em>Clorox Annual Report<\/em><\/a><\/p>\n

We spent some time digging through the Clorox business, which encompasses a number of household brands — from Glad trash bags to the magnesium supplement Natural Calm<\/a> (which people are also going to need).<\/p>\n

But it\u2019s Clorox-branded products that make up a third of their sales: bleach, spray, wipes, disinfectants, and even the Total 360 System<\/a>, which looks like something they\u2019d use to disinfect an alien spaceship<\/a>.<\/p>\n

Way back in 2014, the company put together a 2020 Long-Term Strategy, with a 3-5% annual growth target. As of 2019, they were at 2.4%. Given the vast quantities of Clorox that will be consumed in the fight against COVID, I\u2019ll let you decide whether the company will make their goal by the end of 2020<\/a>.<\/p>\n

My vote: Clorox is going to clean up.<\/p>\n

Netflix (Stock Ticker: NFLX)<\/h2>\n

People are being sent home by the millions. Workers. Students. Adults. Children. Babies.<\/p>\n

They\u2019re going to get bored.<\/p>\n

Parents need a way to babysit the kids? Netflix.<\/p>\n

Students finished your three hours of study? Netflix.<\/p>\n

Adults trapped at home, can\u2019t go out to eat or the movies? Netflix.<\/p>\n

Sure, there are plenty of other streaming video options, not to mention videogames and plain old broadcast TV. But Netflix has a streaming product unlike any other, customized to your viewing preferences, with an enormous amount of quality original content. They\u2019re the leader.<\/p>\n

We also looked at other streaming companies, including Disney (whose streaming Disney+ memberships will likely take off), but the closure of Disney theme parks<\/a> may offset these earnings. Netflix is a pure play: although they still have a small legacy DVD-by-mail business, the real business is streaming.<\/p>\n

Netflix\u2019s streaming memberships have increased year over year for the past 3 fiscal years, and so has their average membership fee, as you can see here:
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\n\"Global
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Courtesy <\/em>Netflix annual report<\/em><\/a><\/p>\n

Netflix also reports strong seasonality: when customers buy internet connected devices, they watch more. That\u2019s why Q4 (when everyone is buying new devices for the holidays) and Q1 (when they\u2019re continuing to watch them) are their strongest seasons. Expect that trend to pick up during COVID.<\/p>\n

Finally, Netflix is even stronger internationally than it is in the U.S. International memberships make up about 50% more than domestic memberships, making it a great company to capitalize on the international audiences staying at home during COVID-19.<\/p>\n

(Funny how the virus doesn\u2019t recognize national or political borders. It just sees one human species.)<\/p>\n

Zoom Communications (Stock Ticker: ZM)<\/h2>\n

There are plenty of videoconferencing systems out there. In my experience, they all suck, except Zoom.<\/p>\n

We do a lot of video calls with clients, and we\u2019ve found that most videoconferencing software takes forever to install, doesn\u2019t connect you properly, loses the connection randomly, and just generally provides a terrible experience.<\/p>\n

Zoom, in our experience, just works.<\/p>\n

As the company said in its offering prospectus, this causes a kind of \u201cviral enthusiasm\u201d among its customers. (If only they knew how literally that phrase would come true!) Over the last week, I have heard so many people — from churches to schools \u2013 say, \u201cWe\u2019ll Zoom in.\u201d It\u2019s becoming a verb.<\/p>\n

Yes, Zoom is a newly-listed company. But it has had a 5x growth in three years:
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\n\"Zoom
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Courtesy <\/em>Zoom Annual Report<\/em><\/a><\/p>\n

It\u2019s the only pure-play videoconference company in the Gartner Magic Quadrant<\/a>, where it ranks with industry behemoths Microsoft and Cisco. And it has the highest user ratings on the aggregator site G2Crowd:
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\n\"Stars\"
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Courtesy <\/em>Owl Labs<\/em><\/a>. (Note we also looked at Slack, but found it too young and unproven.)<\/em><\/p>\n

The Zoom business model, like the Netflix model, is a subscription-based service. The SaaS model means more predictable revenue, since you can look at their number of subscribers, subtract their estimated churn (i.e., lost subscribers), and project their future growth.<\/p>\n

Everyone is going virtual. Some people will try to use Google Hangouts or GoToMeeting. But when they get frustrated, guess where they\u2019ll Zoom to next?<\/p>\n

Amazon.com (AMZN):<\/h2>\n

If you think of Amazon as an e-commerce company, you\u2019re wrong. It\u2019s a logistics and infrastructure company. And now is Amazon\u2019s time to shine.<\/p>\n

Amazon has one of the most advanced warehousing and distribution networks in the world, not only of physical goods (the stuff you get delivered to your door), but also of data (the stuff you get delivered to your computer).<\/p>\n

I know, you thought Amazon had already conquered the world, but you haven\u2019t seen anything yet.<\/p>\n