Until COVID-19 is under control, the markets will remain volatile – hence – bears, beets, Battlestar Galactica. Huh? I know it sounds confusing, but the famous line from The Office has relevance today. Coronavirus has wrecked the economy with millions unemployed resulting in a bear market. Beets, aka commodities, are feeling the pinch with global quarantines and closed borders causing supply chain and trade issues – impacting access to nutritious food for millions. Lastly, streaming services, once at war, are offering their services for free for the billions stuck at home with nothing to do – even Battlestar Galactica is streaming for free on Syfy.
Well, if you thought I couldn’t possibly use the line “bears, beets, Battlestar Galactica” in regards to investing – boom, I just did. Well, let’s peel back the layers just a little bit on the bear market, commodities, and streaming services for this article dedicated to my quarantined investors.
Bears
By definition, a bear market is, “when a market experiences prolonged price declines. It typically describes a condition in which securities prices fall 20% or more from recent highs amid widespread pessimism and negative investor sentiment.” What does that mean for you as an investor? Discounts! What better time than now to invest when the market has dropped significantly across all sectors? As a long term investor, I always think about the 2008-2009 Financial Crisis wishing I had thrown more money into the markets.
Well, now is yours (and my) chance to do it – let’s not make the same mistake. I would hate to look back at this moment in ten years and think “what if.” If you’re new to investing, or hesitant to make the leap – the markets gave you a clear signal to jump in. You don’t even have to “time” the markets – it did it for you, gifting you an unbelievable opportunity.
I am a huge proponent of dollar-cost averaging, which entails dropping money into the markets over time, rather than throwing it in all at once. It’s a fantastic method for new investors or those nervous about investing. It’s a set-it-and-forget-it approach – over the long term, you will make money due to compound interest!
When corona crashed the markets – we ended up with dollar-cost averaging on steroids. Take advantage while you can.
Beets
The food supply chain is a complex web that involves producers, consumers, agricultural and fishery inputs, processing, storage, transportation, and marketing, etc. As the virus spreads and measures tighten to curb the spread of the virus, there are countless ways the food systems at all levels will be tested and strained in the coming weeks and months.
As of now, disruptions are minimal, as food supply has been adequate, and markets have been stable so far. Global cereal stocks are at comfortable levels and the outlook for wheat and other major staple crops for 2020 is positive. Prices of agricultural commodities such as perishable vegetables, grapes, and sugar have fallen 15-20% as bulk demand from hotels and restaurants has nosedived and there is uncertainty over exports.
Investors now are looking for safety, sending gold prices to a 7-year high, with bonds also escalating. Generally, the prices have taken off this year and federal reserves of each country are being safeguarded to ease monetary policy if the global impact keeps getting worse.
Shares of the largest commodities in the world have seen great unpredictability due to sharp changes in pricing. As prices dip, it provides a perfect entry point for investors.
Battlestar Galactica
A global pandemic that forces people into their homes for weeks is a streaming service’s dream. For us, it’s a nightmare being locked away. However, imagine not having streaming services available? Re-watching DVDs, or if this happened in the 90s, VHS videos taped off the TV. That would be crazy…
Disney announced on Wednesday, April 8th, that Disney+ now has more than 50 million subscribers. That’s almost twice as many as Disney reported on February 4, when it said in its Q1 earnings that Disney+ reached 26.5 million subscribers during the quarter.
Netflix released Tiger King: Murder, Mayhem and Madness which has taken America by storm. Celebs have been tweeting all about the various characters on the show and even started petitioning Joe Exotics release from prison. It’s a very disturbing but unique inside look at big cat owners and their zoos. It has been the top streaming show for weeks.
Lastly, a new streaming service is available called Quibi. The platform was created by Jeffrey Katzenberg, DreamWorks co-founder, and CEO Meg Whitman. They chose the name “Quibi” because they deliver “quick bites” to viewers on the go – the streaming service is dedicated to short-form original programming. They plan to introduce a slew of original shows to directly compete with Netflix.
Whatever stack of streaming services you have – Hulu, HBO Go, CBS Access, etc. – investors should consider an arsenal in their portfolio. I believe the coronavirus will shift our “norms” to include more social distancing when flu season is upon us. That’s 6 months of mask-wearing and encouraged binge-watching of shows from October to March every year.
Final Thoughts
I hoped you enjoyed this roundup of bears, beets, Battlestar Galactica. I didn’t know if I could finagle all three terms into a comprehensive article of investment considerations but I am glad it worked out. To all my investors – prepare for a year of volatility with most experts declaring that we haven’t hit bottom yet. It will be interesting to see how the markets react once earnings are reported later this month and onward. If you’re bored of streaming shows, take the opportunity to get your finances in order – it’s a perfect time to spring clean, prepare for a garage sale, and change your spending habits – a fresh start!
