Long Term Investment Philosophy

We have witnessed a pretty dramatic stock market so far in 2020. With our economy shut down in attempt to slow the spread of the COVID-19, the major stock indexes plummeted over 30% and then rebounded in response to unprecedented action taken by the Federal Reserve and a huge stimulus package which was passed by Congress. As a result, the S&P 500 has recouped most of its losses and the Nasdaq 100 is up for the year. But not all stocks have rebounded equally. “Stay at Home” stocks like Amazon (AMZN) and Blue Apron (APRN) have fared well. “Play at Home” stocks like

Netflix (NFLX) Facebook (FB) have outperformed and “Work at Home” stocks like Zoom (ZM) and Docusign (DOCU) are both way up this year. Meanwhile stocks like Budweiser (BUD) and Marriot (MAR) are down over 40% for the year. Part of any analysis about the prospects for any potential stock investment must include an educated guess about what life is most likely going to be like in 2 or 3 years. If you think that life will revert back to the way it was once people are no longer concerned about the virus, than many stocks are currently very undervalued while some stocks that have performed so well may give back a lot of those gains. If you think that people will continue social distancing forever, then you probably don’t want to invest in restaurants or cruise lines. I think eventually life will get back to normal with some notable exceptions. People will continue to increase their amount of online shopping. Certain workers have already realized that they can be just as productive working from home. This will reduce automobile and fuel consumption as well as the need for office space. Businesses who have successfully substituted in person meetings with online meetings will continue to do so at least some of the time. This will permanently decrease the demand for business travel and corresponding airline and hotel usage.