Dear Reader,
The world is in the midst of unprecedented coronavirus disease COVID-19 economic lockdown.
But some sectors and companies are faring better than others. Information Technology, Healthcare and Utilities sectors are outperforming year to date.
Information Technology companies outperform because now most people work from home, shop from home, watch TV, stream movies and play electronic games more. Healthcare companies are benefiting from the increased demand mainly for influenza medicines, along with many other healthcare products, since due to the increased stress the population is likely to get sick more often. Utilities are benefiting from increased demand for water, electricity and gas as the many people working from home consume more from basic products like water and electricity.
Companies likely to benefit are Amazon, Zoom Video, Microsoft, Zynga, Take Two Interactive, Electronic Arts, Pfizer, Eli Lilly, Johnson and Johnson, Astra Zeneca, Brystol-Myers Squibb, Nextera Energy, Dominion Energy, Duke Energy etc.
However, I doubt the current rally in stocks in general is sustainable. I expect global stock market indices to fall more than 40% from current levels in the next 2-3 years. Technology stocks, especially will not hold their gains and relative better performance, I think. Companies like Amazon, Apple, Microsoft, Tesla, AMD, Netflix are simply grossly overvalued. By not less than 30%.
Disclaimer: The blogposts and comments on this blog and posts on social networks(Twitter, LinkedIn, Facebook etc.) are not investment recommendation, are provided solely for informational purposes, and do not constitute an offer or solicitation to buy or sell any securities. The opinions expressed on the blog are Petar Posledovich's. Petar Posledovich does not guarantee the accuracy of the information presented on this blog and social networks. The information presented is "as is".
Petar Vladimirov Posledovich is not liable for any investment losses incurred by reading and interpreting blogposts on this blog and posts on social networks.
Conflicts of interest: I may possess some of the securities, currencies or their derivatives mentioned in the blogpost and posts on social networks(Twitter, LinkedIn etc.)!
Respectfully yours,
Petar Posledovich
2 comments:
I fully agree. However there are some opportunities in the Oil sector.
Gazprom looks now way undervalued with PE ratio of 2.86 and PB ratio of 0.25.
Agreed. Large oil majors will most likely survive the current oil price crash. And later prosper.
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