This is a follow up on my post Corona Virus and Financial Market Fallout.
This (financial) crisis, induced by the global corona pandemia rattling through Asian, European and American economies, is indeed different when compared to other financial crisis!
Globally, more and more economies are in lockdown. Hopefully, this unpleasant and extraordinary measure will indeed flatten the curve so that national health services are not overwhelmed (to an even higher degree).
This lockdown, and sudden stop of most of our economic activity is very different to other financial crisis. Usually economic activity (i.e. demand and investment) weaken over time when we enter a recession, but the do not stop over night. But now: certain economic activity did stop overnight! This leads once more to: CASH IS KING! Even the best and most profitable (in usual times) businesses must first survive this economic turmoil. Many businesses could experience a serious cash crunch in the near future, coping with rather fixed expenses (salary, rent, long-term contracts) but generating merely abysmal revenues, depending on the industry/product. Some general and some more specific opinions/ideas below
Telcos, Utilities, Software Companies should be rather defensive now, they should generate revenues and mostly be able to work from home
- Deutsche Telekom AG (placed a limit buy order)
- Check Point Software (I was sadly not allowed to buy during the very low prices some days ago, due to compliance filings I have to do before each purchase), market already noticed that CHKP is in very good order ($ 4 bn net cash, generating revenues)
- Update: I bought some more Wednesday late evening
- Uniper sold off as well, maybe interesting becasuse of the potential buy out from Fortum
Strongly sold off ideas
- Simon Property Group (SPG US) a US REIT / mall operator (trades at c. $ 50 down from 140 beginning of 2020), zero revenue; but should receive rent from the big customers (nike, adidas, apple, the like). Still better than some smaller customers going broke
- Sixt SE (Common: SIX2 GY), dividend suspended, revenue = 0 (for some weeks?)
- Softbank Group (9984 JT), sold off much stronger than Alibaba (BABA US), discount got bigger, market fears credit crunch). Pictures below.
Soo many research ideas… And never enough time …