The webinar was recorded May 19, 2020
You can find the slides here.
Chris [00:00:05] Hello and welcome to today’s Cabot Wealth webinar, Rebalancing your Portfolio after Coronavirus, Plus Two Good Stocks to Buy now. I’m your host, Chris Preston, chief analyst of the Cabot Wealth Daily Advisory and managing editor here at Cabot Wealth Network. With me today is Nancy Zambell, Chief Analyst of our Wall Street’s Best Investments advisory. Today, Nancy is here to talk about this unique era we’re in and how it relates to investing in your portfolio. She’ll talk about how the flip from a bull market to a bear market affects what you should be holding depending on your long term and short term goals. She’ll also name a couple stocks that are good to add to your portfolio now and to keep it growing. This is an interactive webinar, which means we’ll be fielding your questions after Nancy’s presentation wraps up. So if you have a question, feel free to ask it at any time. We’ll try to get as many of them as time allows, once Nancy wraps up. Just keep in mind that we cannot offer advice in regards to your own personal investing situation or portfolio. First, let me introduce Nancy. Nancy has spent more than 30 years educating and helping individual investors navigate the minefields of the financial industry like the one we’ve been in lately. She has created and or written numerous investment publications, including UnDiscovered Stocks, UnTapped Opportunities, and Nancy Zambell’s Buried Treasures under $10, plus her latest book released last year, Make Money Buying and Selling Stocks: The Cabot Wealth Introduction to Investing, available on Amazon now.
Chris [00:01:31] Nancy has worked with MoneyShow.com for many years as an editor and interviewer for their onsite video studios. As a lecturer and educator, Nancy has led seminars for individual investors at the National Association of Investors Investment Expo, The Money Show and our current and our annual Cabot Wealth Summit. She is also taught finance, economics and banking at the college level has been quoted extensively in the Wall Street Journal, Investor’s Business Daily, USA Today, and BusinessWeek. Bottom line, Nancy knows what she’s talking about when it comes to investing. So I’ll let her do just that, Nancy. Take it away.
Nancy [00:02:08] Good afternoon, everyone. Thank you so much for joining us. I hope that you’re here because you really want to learn not because you have nothing better to do. Anyway, it’s a crazy time that we’re in. The Corona virus pandemic has created precipitous drops in the stock markets, as you know, likes of which we have not seen since the 2007 recession. And while it’s emotionally wracking to see the stock market take these huge swings that we’ve seen, it’s not unprecedented and it will pass. It is temporary. And this chart shows you this is not our first rodeo. We’ve had a lot of other diseases. This is the chart from the World Health Organization, and it’s declaring how global emergencies affect the stock market after each outbreak. That happened with the corona virus June 30th, I’m sorry, January 30th, which you can see, it’s pretty amazing that market just dropped precipitously. Of course, you know, it continued going down and then it spiked back up again. And now we’re just very volatile and we’re but we’re making our way back. That’s the important thing about that.
Nancy [00:03:13] And this is just a chart of historical medical events and what happens in the market after six months and twelve months. And as you can see with almost all of them, the market has sprung back again.
Nancy [00:03:24] And we really believe at Cabot that that’s going to continue doing that. And that history shows us that this pandemic will end and this market downturn will also end.
Nancy [00:03:34] So right now, we don’t believe it’s time to go crazy selling. I have lots of friends that are in the 2007 and eight market rath. We’re panicking and calling me and telling me, asking me, should they sell their whole portfolios? I’m like, no, no, no. I mean, that was a totally different era than what we’re in now. We weren’t really sure how long that was going to last. There were so many factors that came together to make the economy just almost a depression. The mortgage market fell apart, the housing market fell apart, and so was a long way back. But we made it back from that. This is totally different. But at the same time, having been in the market for 30 some years, it will bounce back. The market just goes up and it goes down. We all know that. So one of the most important quotes that we’ve seen in our lifetime, which is always, almost always attributed to Warren Buffett, that was actually from Baron Rothschild, the time to buy is when there’s blood in the streets.
Nancy [00:04:30] And that is so true. I mean, you want to be specific and picky about what you’re buying. You don’t want to just go throw a dart. It’s not that kind of market, but it is important to not panic. And my quote is, trading stocks in this kind of market can be a crapshoot, which you don’t want to do is panic selling. That rarely works out well for the individual investor. So we think that even though we don’t want you to go wholesale selling, there are some reasons to sell. And these are the same reasons that are true in any market whatsoever.
Nancy [00:05:02] So basically, you shouldn’t sell your your stocks during a period of upheaval. So you basically only want to sell them if there’s a good reason to sell.
Nancy [00:05:11] And you might have some of those reasons. If the fundamentals of the company have deteriorated to the point where you do not think they can recover after this pandemic is over, then sure, that’s a really good reason to sell. I think I missed the slide here. Here we go. Some of the indicators you want to look at is were your stocks losing money before the outbreak? I mean, were the company is losing money before the outbreak of corona virus? Are the companies overloaded with debt? Were their revenue shrinking before Corona virus? And are they in a sector that was suffering before the pandemic? So all those things are true. You know, you probably have a candidate for selling there. If they were losing money before the outbreak, there’s something wrong there. Maybe they’re just in a real big growth stage of the company. There’s a reason for that. If they’re overloaded with debt, not the time to have massive debt. And you have to think about debt with a company just as you would think about it with your own self. I remember being in banking many, many years ago and a fellow came in and he wanted to borrow, I think he wanted to borrow eighty eight thousand dollars to get himself out of debt. And he didn’t make much more than that. There was no way that I could see that he could ever pay that back. So I would have just been giving him money, good money over bad money, and it would not have helped him at all. So if a company has a lot more debt than they have assets to cover it or they don’t have any reason that they can show you they’re going to get out of that debt by expanding their sales and their earnings, then you probably don’t want to be in that company because debt is just the killer of companies. If revenues were shrinking before the Corona virus, I’m not going to get better for a while. It especially if you’re in one of these retail sectors or food sectors. And are they in a sector that was suffering before the pandemic? You know, the financials had just started coming back when all this happened and now they’re in the doldrums. So after you look at those tests, the last three to look at is are all the reasons I originally bought this stock valid?
Nancy [00:07:13] Are they still in place? Is the stock price target’s price still valid? Can I make more money by retaining the stock than I can by substituting another?
Nancy [00:07:23] Or can I make more money by substituting another investment? So you have to look at that because people will tend to hold onto their stocks forever. You know, people always ask me how well, how long is the holding period for a stock? How long should I be looking at it? That depends on a lot of things. Specifically you and your personality. But in the newsletter business, we wouldn’t have any business at all if we didn’t turn stocks over, because otherwise we’d have 5000 stocks in our portfolio. And we don’t advise that any investor do that. So typically, for the average investor, unless you are a trader. 12 to 18 months is a good timeframe for you to hold onto your stocks. But don’t hold onto them without knowing what they’re doing. So I always advise that at least every three months you’re going to look at your portfolio and ask yourself these questions.
Nancy [00:08:12] Why did I buy this stock? Are those reasons still good? If I bought a ten dollar stock and I said that I think the price can go up to 20 now it’s at twenty five. So you’ve got to think, well, should I take some of that money off the table. And most cases that answer should be yes. Or maybe that ten dollar stock is now at five. So cut your losses now or is there some reason that’s coming up that’s going to make that company’s future look brighter, that you could continue holding it. And can I make more money by retaining this stock than by substituting another? So if you have a stock in an industry that you really like, but this particular stock’s not performing well. Look at the other stocks in the industry. See how they’re doing. Maybe you would like to substitute one.
Nancy [00:09:00] Now. There we go. So one of the things that we do know is that the economy and the stock market are both cyclical and of course, history never repeats itself exactly. So you can look at this chart and say, well, you know, the last recession, financials didn’t do well until X or energy didn’t do well until X made the biggest problem with energy right now. And why oil prices are so low is, of course, the oversupply and the demand just dropped amazingly. So I was filling my car up pretty much every four or five days. And I know now it’s like every two to three weeks. It’s the strangest thing. And when prices dropped, I looked at my I was a Kroger filling my car up and it was a dollar and a quarter a gallon. I almost had a heart attack. I thought there was something wrong with it. But it’s just incredible so that history does not repeat itself exactly all the time. But this gives you some idea of what kind of sectors look good during a beginning of a bull market, a late bull market, beginning of a bear market all the way through to the late bear. So it’s always important to keep pressing the wrong. But let me go back there. It’s always important to take a macro look, because, as I always say, is you could buy the best stock and the best company in the world. But if nobody else wants to buy the stock, you’re not going to make any money at it. If the indicators are not right for that company to excel and do better and get Wall Street interested in it, you could be holding that stock at the same price you bought it at, or even less for many, many years. So you do need to take the macro picture in to account.
Nancy [00:10:41] So the next step is. What I might want to buy might be something that suits my personality, even though I’m now at an older age. I’m not really a person that’s a real conservative investor. But a lot of people are. I mean, I know enough about the market that I can take a loss if something goes down 30 percent overnight. Other investors can’t take it if they go down, five percent so it’s important to know what your own risk profile is. So if you go to this link, you will find the investing profile survey, which is on our Web site. And it basically has you answer – I don’t know, it’s about 20 questions or so, maybe it’s less than that – about what your risk profile is. Are you concerned about inflation? Are you comfortable holding the stock when it drops in value?
Nancy [00:11:34] Are you willing to accept a lower return so that you don’t have as much volatility? When do you need your money? That’s a really big, important question because if you need your money in six months, you really shouldn’t be investing it in the stock market because that’s a no win gain.
Nancy [00:11:52] You could do very well, but you could also lose that money that maybe you were saving for a house payment or to get your grandkid in college or whatever. So it’s very, incredibly important for you to figure out what your investing profile is. And the test is really easy and survey’ll take you 10 minutes to do it at the most.
Nancy [00:12:11] And once you do that, you’re sort of going to determine then whether you’re a conservative, a moderate or aggressive investor. And of course, there’s divisions within all of those.
Nancy [00:12:21] This, I thought, was a good depiction from Charles Schwab Schwab that talked about what you would normally have, say for an example, if you are deemed to be a conservative investor, then maybe you don’t want any more than 15 percent large cap equity. You may want no small cap equity because small caps tend to be more volatile, not doing very well in this market. You also might want to limit your exposure to international equities, in this case, five percent. You might want 50 percent fixed income and 30 percent in cash. Now, of course, a lot of that depends on your age, too, which we’ll talk about next. But go to the other end of the chart and look at the aggressive allocation, especially for long term investors that I’m talking about, people that, you know, five years out or so, you might want 50 percent of your money in large caps, a little bit, 20 percent in small caps, exposure of 25 percent to international, no fixed income and five percent in cash. Because maybe you don’t need that extra – that liquidity – because you don’t have any major expenditures coming up that you know about. So one of these allocations may work well for you. You just have to kind of look at it and find out what you’re comfortable with. I mean, I like to see a really well diversified portfolio.
Nancy [00:13:37] So I really believe that people should pretty much half some of all of these things in here. And the more risk averse you have you are, the less equities you’re going to have in there. But on the other hand, if you have a little bit more interest in taking on risk, you can make a lot more money with your money by taking that risk on in small caps in international equities. Course, there’s no guarantee.
Nancy [00:14:02] This is the old school of thought. What they used to say that according to your age, this is the allocation you had and of course, when you’re under 25. Of course, this is the time when hardly any kids invest anyway because they have to use their money for other things.
Nancy [00:14:18] But 100 percent in stocks because, you know, you got 40 years for most cases before you’re going to retire and really need that money you’re socking away. And then you go to somebody who’s forty five, which used to be considered middle age, and I don’t think it is anymore. Fifty five percent stocks. Forty five percent bonds.
Nancy [00:14:34] And then people who were in their golden years, they continue decreasing their stock allocation and increasing their bond allocation. But the problem with that. There are a couple problems with that. One is that we’re living a lot longer. A friend of mine just retired from her banking career last month, and she’s 65, which to me is young. And her pick her family, most of them lived to be close to 100 years old. And I said to her, have you figured out if your money is going to last?
Nancy [00:15:04] And she does get a small pension. But, of course, inflation is going to eat right into that. But that’s a serious consideration. So our money has to last longer because we’re living longer. And that means you probably have to put a little bit more money at risk in order to increase your returns. So this is the new school of thought. It’s not significantly different, but if you put the two Side-By-Side, you’ll see that definitely people who are now seventy five were still recommended that they have about forty five percent of their portfolio in stocks and fifty five percent bonds. And I think the previous one was twenty five percent stocks and seventy five percent in bonds. And I think that’s really going down. I think that more and more people will not be invested in bonds at all, especially as they become more sophisticated investors. The more you learn about it, the less afraid you become of stocks.
Nancy [00:15:56] I had to have a real estate business, too, as some of you know, when one of my agents is going to say in her early 50s and her husband when this whole pandemic happened, he just wanted to wholesale sell everything that we’ve got him like just pull him back from the brink, because that is not what you need to do. I mean, you people are going to live probably another 30 to 40 years. You’re going to need this money. You don’t need it right now. Your house is paid for. Your cars are paid for. So, you know, you have to look at it as a little common sense and add them. As I said, the more you learn about the stock market, the more you’re going to feel comfortable with that. Go again, whatever. I don’t have to have CNBC on all day. I watch CNBC at about five o’clock in the morning just to see what the latest news is. And then I don’t have it on the rest of the day because I don’t really need them to tell me what I should think about the stock market. I can look at the numbers and figure it out for myself.
Nancy [00:16:50] OK, here’s some sample age related portfolios. I said a little while ago that some of your risk aversion would depend also on what age you are. It also depends on how much money you have. If you’ve got a portfolio of 20 million dollars, you know, you don’t have to worry about being that risk averse. And as in, if you’re 80 years old, you probably got enough money to last your lifetime. And, you know, obviously you want to set aside money for your heirs. And so you might want to be conservative with some of those funds. But you can see here that even at age 60, 60 to 60 to sixty nine, you’ve got most equities, you’ve only got 40 percent. That’s not in equities in that portfolio.
Nancy [00:17:33] As you get up to age 80, you now have an 80 percent portfolio that is not in equities.
Nancy [00:17:40] And of course, these are just guidelines to this going to depend on how you feel about risk and how much money, as I said, that you’ve managed to accumulate.
Nancy [00:17:48] One of the mistakes that I see people make often and I’ve had people come up to me at the various shows that I presented at, you know, they’re fifty five, but they don’t have a dime saved.
Nancy [00:17:58] And now they want to they want to buy the riskiest stocks they can find because they heard that those returns are the best that they can get, double and triple digit returns. Well you know, it’s really hard to make up at that age if you haven’t accrued any money. But you can you can accrue money. That’s probably going to be more of a lifestyle change is going to be anything.
Nancy [00:18:17] But the last thing you should do is invest in stuff that’s incredibly risky when you have nothing to begin with.
Nancy [00:18:25] So how do you figure out once you’ve done your investing survey and you know, whether you’re a conservative or an aggressive investor or somewhere in between, you need to take a look at what you currently own and compare that to where your heart and mind really are in your own investment philosophy. I mean, you – don’t be surprised because it shouldn’t surprise. Well, it will surprise you, but it won’t surprise me if you look at your holdings and you tell me you’ve taken the survey and you’re a conservative investor and you find out that you have 80 percent tech stocks because that’s what happens if you’re not paying attention to your portfolio and you’re listening to advice from investment advisers, most who are not very good. Some of them actually do have your interests at heart. But for the most part, they’re trying to make a living, too, and especially if they’re transaction oriented, transaction paid investment advisor. I had a neighbor a few years ago that asked me to take a look at his portfolio. It was all mutual funds and ETFs. And he you know, he had twenty, twenty five funds, an ETFs. No one needs that many funds and ETFs believe me. And I sat down and I looked at the major holdings in each one. And I’m telling you, half of them were identical and what they held so I mean he was sold this bill of goods because it made money for the investment adviser. So I really advise you to take a look at what you have. So what do you do?
Nancy [00:19:51] You start out by listing all of your holdings, cash your bonds, your mutual funds, your stocks, list them out by industry and sector by market cap. Which ones were domestic stocks? Which ones are global? Which ones are international? Which ones are growth, value, growth and income? Just income. Look at their one three five year returns, year to date returns also. And of course, those are going to be pretty bad right now for most companies. But yet that’s why you look at the three and five years also. And then what percentage of your portfolio that particular position holds. And for your mutual funds and ETFs, list all the names of your companies, how much each of the fund holds, what their investing strategy is, look at their top 10, top 20 holdings, see what percentage they make up in the portfolio.
Nancy [00:20:41] And that sounds like a lot of work that we’ve created this spreadsheet for you, which you can download at CabotWealth.com/InvestorWorksheet, and you can make it, you know, as many pages as you want. And this will help you lay it out. There’s also, if you are, you go back the wrong way. Sorry. There we go. If you’re with one of the big brokerage firms, they may have something that already that your portfolio page is set up like this. So you can see it at a glance. But this would give you a level of detail that they may or may not have. Another source is on Morningstar.com. It’s called Instant X-Ray. And that’s free. And you can go in there, put your portfolio on there and it will break it apart. It’s a really nice break down. The portfolio may even do graphic things, pie charts, so you can really get an idea of how much you may have in international equities versus domestic and growth versus value and all of that. So it really is important to take a look at it.
Nancy [00:21:38] And then once you once you lay that out, in the end, you don’t be you know, don’t go nuts when you look at it and say, oh, my God, I’ve got way too much in technology. I’ve got, you know, these three funds are invested in the exact same thing. What am I doing? Well, what you’re doing is paying fees that you don’t need to pay. That’s another important. And I don’t think we put that on the spreadsheet. But you should especially on your ETFs and your mutual funds. Take a look at what the fees are that you’re being charged, not just the loads, the some are, no loud some are front end, some are back end loads, but you have all the advertising fees, the 12B-1 fees, and there are other soft fees that might be hidden in there, too. That’s the biggest problem with the funds in the ETFs. When the ETFs first came out, they were cheap. They were really, really cheap. But now they’ve they’re still not as expensive as mutual funds in terms of fees. But they they have started going up there. Be aware that sector funds, specialty type funds are going to cost you more than a general broad market index fund. And, you know, do you really need them? I mean, I guess if I was going to invest in a lot of Chinese stocks, I’d probably do it in a mutual fund or an ETF, most likely an ETF. Just because I don’t know those companies. I don’t know the language. The financial statements don’t always match up to our way of accounting. So you may be a little safer. Same with, you know, some of these frontier stocks, and ETFs in Africa and strange places that you couldn’t buy the stocks individually anyway on an exchange. So those are probably good ideas for mutual funds and ETFs for most investors. You know, if you don’t know much about biotechs, yeah. Buy a biotech ETF. Technology. There’s so much information out there now that you can easily buy individual tech stocks.
Nancy [00:23:33] But that balance your portfolio out, are you – if you’re interested in growth, those companies are going to be a little bit more speculative. They want to value companies, but they’re probably going to grow a lot faster than a value based company. So mix it up, you know, have some of everything, have large caps, mid-cap small cap companies have income producing companies in the way of distributions like with REITs or dividends. Of course, the higher the dividend you get, the more risk you are willing to take on, as you will see in the paper almost every day. Now we’re seeing dividend cuts from different companies, particularly from energy companies, which is not a surprise. It’s just it’s tough with them.
Nancy [00:24:16] They had their heyday oil, the fracking stuff started and now it’s going to take them a while to come back again.
Nancy [00:24:24] So once you set this up and you figure out, OK, here’s what I’ve got, here’s where I want to be according to my risk profile. Now, you’re gonna have to make some changes, you know, figure out. So where do I go from here? So maybe you have a lot of energy stocks.
Nancy [00:24:39] Maybe you’re going to have to get rid of some of them. You know, some may spring back, some may never spring back. So you’re going to have to go back and evaluate those. So if you’re going to reallocate.
Nancy [00:24:51] It’s a really good idea to reallocate with sectors that are likely to outperform. So I have these numbers all as of last night, the close of the market.
Nancy [00:25:00] And they they’ve really changed over the last few weeks since I put this presentation together for the good for the good. So the tech sector is up five percent, which is nothing compared to what it was prior to the pandemic.
Nancy [00:25:13] Healthcare stocks are a minus point one percent. Consumer discretionary. I think that’s supposed to be a minus in front of that.
Nancy [00:25:20] Let me just look at my note real quick.
Nancy [00:25:22] Yeah, that is supposed to be a minus. The worst sectors. Year to date return energy, of course, by far minus thirty three point seven. Financial services minus twenty seven point five. And industrials minus twenty one point six. Check the financials a while, as I mentioned earlier, to catch up on the last bull run, so it’ll be kind of interesting. They just started looking really good. So time will tell how soon that they will bounce back.
Nancy [00:25:51] They’re so tied to the economy and the economy has just been devastated by the virus. I think it’s certainly going to bounce back. I’m not sure it’s going to bounce back as quickly in some sectors as others, particularly in energy. Industrials. I think once the housing market rebounds, you’ll start seeing some industrials also begin to rebound.
Nancy [00:26:16] So the sectors additions that I would probably stay away from right now would be any kind of entertainment companies, cruise lines. I mean there – I understand there were hundreds of cruise ships still sitting out there in the oceans with the crews on them because it’s not safe for them to come in. The airline stocks, of course, and the hotels, anything travel related. Now there will be a boom and those things once the economy gets back on track. No doubt. Airlines, I’m not sure we may be in for some further consolidation in the airline industry and maybe in the cruise line industry. May not remember the days of the Love Boat when we first heard about cruises. You know, there’s like one ship out there and now there are just really thousands of ships that are out there. So that’s that’s probably going to change somewhat. You know, the whole world is changing from what we knew it as it may never come back totally. But technology is going to be a sector that I would be very, very interested in them and looking at stocks and also in health care. Though you do have to be careful.
Nancy [00:27:23] So some of the sectors right now that looks good for the bull market are transportation. With the exception, maybe the airlines, it’s going to be interesting to see what happens with the airlines as well as the airline manufacturers, the airplane manufacturers, because they’ve gotten government money and they’re not supposed to lay people off because they’ve got the government money. But already they’re talking about layoffs in the fall. And so we’ll see what what how that happens. Financial companies, as I said, would take a little bit longer. Technology, once the economy catches up, there’s going to be a lot of spending because right now we have pent up orders that people don’t want to spend the money until they see how things are going. And then capital goods will be the same way. Most of the quarterly reports that I’m seeing now. Capital goods that just this fallen off the wagon. People just aren’t spending money on it right now. And same thing with technology. They’re spending what they have to. Although in technology there are pockets where people are just throwing money, money, money, money. And that’s really in the digital world. I mean, you look at GoToWebinar, which we’re using here, or Zoom video in my real estate business, we’re doing our training and our weekly meetings on Zoom video. My girlfriends and I had a cocktail party on Zoom video last week and it’s it’s just neat to see how these companies have done. I just wrote an article on education and how the world of education is changing due to the whole pandemic. Course, education was due for a big change for a long, long time. It’s pretty been pretty said in the United States. But now they’re talking about how there is going to be a real consolidation in the education world and there are going to be a lot of colleges and universities that are probably just going to disappear. They’re even saying that commodity classes are going to be going more toward online education because what do you need the kids to go sit in the classroom for, to take math 101 or anthropology or something like that. So we’ll see that change. It’ll be interesting to see, though, that there will be a lot of failures because the universities keep saying that they want to keep their their prices static. Well, you know, you’re not going to pay as much per credit hour if you’re sitting at home in front of your computer as you are to be going in a lecture hall to listen to a PhD instructor expand your education that way. So I think that’s going to be I probably wouldn’t be investing in education stocks right now unless they were online education stocks.
Nancy [00:30:04] So in that vein, here are some companies that I’m looking at right now. That I think look pretty decent, so I have four ideas here for you today.
Nancy [00:30:15] The first one is a growth idea and this company is called Sea Limited. As you can see, the symbol is SE, it was up about two dollars an hour ago from this price. And it’s right at its 52 week high, very close to it. That was the 52 week range is 25.26 to 72.80. It’s an electronic gaming company out of Singapore. They have the digital entertainment platform as well as a digital payments platform. Just reported their quarterly report, revenues up 58 percent. Still has a loss of fifty two cents per share. Company’s only been public for a couple of years. It came out December 2017. But their e-commerce revenues were up 74% for the quarter and they don’t have any kind of a dividend. It will be probably a long way off for that.
Nancy [00:31:13] Next company is Microsoft, whom you all know who was given up for dead so many times, but it’s a it’s like a zombie. It keeps coming back to life because they’re smart and they keep up with what’s going on in the technology world. So the price of Microsoft is close to 185 dollars a share, does pay a small dividend now of 1.22 Percent. It’s now participating in new areas. You know the cloud. Artificial intelligence, e-commerce, supply chain, rather than just typical old software. So it’s got a life, lot of life left in the in the world. And the 52 week range was 119.01 to 190.70 for Microsoft in the past year.
Nancy [00:32:01] Next company is 21Vianet Group, VNET is the symbol, the Chinese company. They do a lot of Web hosting data center hosting is really what they’re known for. Carrier neutral in the cloud. The revenue spiked 25 percent the past quarter to 154M. It’s not making any money either. But the adjusted EBITDA was up 2.3 Percent at 36.6M, and it’s trading close to its 52 week high. It’s gone from 6.31 to 17.62, so it’s also bounced. Well, bounced back well from the pandemic.
Nancy [00:32:37] And the speculative ideas, Moderna, who I think you would just have to be deaf, dumb and blind, not to have heard about this company in the past day. Moderna makes vaccines and it’s got a coronavirus vaccine that everybody got all excited about yesterday because the phase one trials went really well. But keep in mind, the phase one trial was on eight patients. That’s a lot more than the three, some four million, I guess, that have been infected across the world. It also has 12 other drug candidates. They’re all RNA based design drugs. Those are all in the pipeline. Nothing that’s made any big splash yet. But the price of Moderna was 80 yesterday. It closed an hour ago with 74.80. Some of the excitement has pulled back. Its 52 week range is 11.54 to 87. Now, of course, if this stock makes it going to get a lot more than 80 dollars price per share, but you also could lose it if, you know, the phase two trials are going to be next. And I’m not sure how many people, probably a couple hundred people in that. And then phase three will come later in the fall. Although I caught the chief executive officer yesterday on TV saying that he really agrees with Dr. Fauci that it might be two of the 18 months before the vaccine is really available, no matter all of the hype that you read. And again, this is a really speculative stock. So if you’re going to put some money in it, don’t put a ton of money in it.
Nancy [00:34:05] So I guess at this point, Chris, that’s really all that I have. And I b love to take some of your questions.
Chris [00:34:13] Yeah, thanks. So I see some questions rolling in. I may give Nancy a minute to catch your breath before she starts answering some of your questions. In the meantime, just a bit of housekeeping. Nancy, can you advance just to the next slide, just for sure with this? If if you like what you’ve heard from it so far today and are interested in signing up for her Wall Street’s Best Investments newsletter, which is investing advisory in which every week, Nancy scours more than 200 investment advisories, other investment advisories, including some of Cabot’s and research reports to select the top recommendations from some of the top investment analysts in the country. Then we have a special offer reserved exclusively for listeners of today’s webinar. You get the first 30 days for just one dollar. It’s in essence, a free trial run to see if Wall Street’s Best Investments is right for you. When you subscribe, what you get are monthly issues and updates on the hottest stocks, daily trading alerts, 24/7 access to the subscriber website and e-mail access to Nancy with any questions you have. To subscribe just go to the website on your screen, CabotWealth.com/WebinarSpecial and again, it’s just one dollar for the first 30 days.
Chris [00:35:25] All right. Let’s see. We’ve got a bunch of questions rolling in. I’ll start with Brian. Brian asks a common question these days. Considering how quickly the market rebounded and the likelihood of a recession and slower economic recovery, do you think there will be another larger market decline?
Nancy [00:35:45] Sure. That’s my short and sweet answer. It would be unusual for there not to be one. I think we’re just going to be very volatile. VIX is going to be incredibly volatile over the next few months. We’ve got to get the economy back in shape. And that’s not going to take a month or two months. It’s going to take longer than that. We’re probably looking at the beginning of next year before we see any sort of normalcy. And a lot of that will depend on how we’re doing with the opening up of the economy now. I mean, I live in Tennessee near the Smoky Mountains, and we just really started opening up restaurants in the last couple of weeks. Still not very many people going there. I think we’ve had 17000 people infected with the virus. So it just depends on how well we do with this if we really are over the hump or not. Hopefully we are. But, yeah, I do. I do believe that we will have some more serious downturns. It may not be, you know, a month for a month worth of downturns, but maybe, you know, another week here, a week there and then bounce back from that from that point.
Chris [00:36:50] Question from Bob, who’s been waiting patiently. Would tech stocks be good to continue to hold for the coming months?
Nancy [00:36:59] Yeah, depending on which stock it is, Bob. Again, I would do my investigation and analysis of the stock and determine, you know, which particular subsector within technology the stock was in. And, you know, and just kind of look at the macro picture is, is this an industry that’s growing? If it’s not, you know, you might want to take your losses.
Chris [00:37:24] OK, clarification question. From Randy, Nancy, you listed next to some of your stock picks analyst ranking, I think it was, could you just clarify what that means. Randy is curious.
Nancy [00:37:40] It’s really kind of meaningless, Randy, to tell you the truth. That’s the job that Yahoo! Analyst ranking. So they pulled the analysts that are reviewing the company that keep it on their regular steady list. And so they rank them from one to I think it’s one to four. You know, from one is the worst ranking. That’s not really a sale because they analyst hate to sell anything but all the way up to four, which is really a strong buy. Most of them, you see more in the two to three range. And that’s just kind of what Wall Street analysts are looking at. The issue with analysts is that the ones that follow the companies usually also have business with those companies within their underwriting business.
Nancy [00:38:25] So it’s really hard for analysts to be totally independent. I when I worked for a brokerage firm quite some time ago, our research department is right next to the guys on the trading desk. And they used to come in all the time, you know, want to know what we thought about a company. And then we had the underwriters down the hall. And those are the guys that bring the companies public or do their secondary offerings or their debt offerings. And they always wanted us to write up glowing investment reports whether the company was good or not and we didn’t in my company, although there were a lot of people that do that because they want to maintain that underwriting business, that investment banking business. So you have to be a little careful with analysts. One of the things that I use the analysts reports for is they’re really, really good at industry analysis. So more so than the individual company analysis, they really dig into the industry. So if you’re really interested in, say, a biotech company, go to whomever’s following those biotech companies and read their industry reports and you’ll be amazed at what you’ll find out.
Chris [00:39:31] We have a good question from Suzanne who asks what capital goods companies with pent up demand do you think we’ll back bounce back soonest?
Nancy [00:39:42] Well, I don’t know. I haven’t really studied that, to be perfectly honest with you. I mean, I could do it. I look at it. But, I mean, companies that are basically selling things that people want. I mean, if you’re going to go back into the building business again, which will happen, you know, you’re going to be looking at companies that offer building supplies.
Nancy [00:40:03] You’re going to be looking, as I said, transportation companies, because those goods have to get moved. And in that case, I’d be looking at trucking and railroads more than the airlines, although some of the freight companies might be pretty good. But as far as other capital goods, it’s going to be a while before we get back to the consumer buying stage. I think we’re not going to see a lot of appliances rolling out the doors right now or anything that’s specific to, you know, fixing your your your new home up, buying a new home. Those kind of things are really not going to be very popular again for a while.
Nancy [00:40:38] I mean, we’re seeing a little pickup in the real estate business, but not substantially so. So I’d be really, really careful with buying capital goods right now.
Chris [00:40:49] Question from John. Speaking of things you need to be careful about buying with airline and cruise ship stocks so depressed a few weeks ago do you see that as a great buying opportunity?
Nancy [00:41:01] No. I would buy any of the airline stocks. And, you know, Buffet even got rid of his airline stocks a few weeks ago and some of the cruise ships. I just think that there’s going to be a real shake up in that industry. And, of course, you know, some of them a lot of are owned by the same company. I mean, you’ve got Carnival, which owns quite a few companies and Royal Caribbean. And if I was going to buy any, it might be those stocks. But I don’t think it’s time to buy them yet.
Chris [00:41:33] A question from Christine. Where do you think we are in the market right now based on the bear bull market page you posted earlier?
Nancy [00:41:43] Well, I still think that we are. I really hate that term bear market. There’s always an opportunity in every market in some particular sectors. I still think that we’re in a long term bullish market. If you want to use the term bear, you know, short term sort of bearish, it’s one of those that you have to pick carefully with your stocks. You can’t just say, oh, I’m going to buy technology stocks or I’m going to buy cruise ships. You’ve got to really analyze the company within the sector. Even if you think the sector is great. My advice would be to analyze the company and you could still have, you know, a company that’s been beaten down so much in the past couple of months that it’s going to be a really good company over the next year, maybe over the next six months, depending on how the economy bounces back.
Chris [00:42:36] Question from Randy. Different Randy from earlier. Are 5G stocks. A good choice right now?
Nancy [00:42:43] Absolutely. That is one sector of the economy that’s going to just go gangbusters. It’s really changing how we communicate. There’s so much less latency. And the new five G technology. It’s a lot faster. The cell towers don’t have to be these humongous big cell towers that nobody wants to live with. You know, not my backyard syndrome. You’re going to see a lot of really small towers, almost portable towers in different places. You might see one tower for one office building. So it’s really going to change. It’s going to change the way that we’re communicating now. And it’s going to expand the communications world tremendously by opening up cell phones for answers to people who don’t have access to them right now. So I think that’s probably a many year project and probably going to be good, good investments for many years now.
Chris [00:43:35] And just to add that, we have an analyst at Cabot named Tom Hutchinson, who’s written about five 5G a lot and is very bullish on that sector. He wrote a story that will go on CabotWealth.com website tomorrow, about two 5G stocks that he really likes right now. So check by tomorrow, that’ll be up.
Chris [00:43:53] Yeah. Let’s see here. Question from Tappas I hope I’m pronouncing that right. What do you think about Bitcoin and crypto? Is it unsafe to invest in money and better to invest in crypto or gold?
Nancy [00:44:12] Well, if I had a choice between crypto and gold, I’d take gold and I’m not a big gold bug either. Gold is good for certain. I mean, you should probably always have a little bit of gold in your portfolio. Maybe in the form of an ETF or a fund. But crypto, even though I don’t consider myself a conservative investor, I’m not a crazy investor in Bitcoin and crypto is just too far out there for me. You know, again, if you’re going to invest in something that’s speculative. Keep it to a really small portion of your portfolio and, you know, be aware that you could lose it all.
Chris [00:44:46] Yeah, I know that. Mike Cintolo, who runs our our Growth – Growth Advisories, just added a gold stock to his portfolio, which is is rare for him. So that should stocks are in a good place right now.
Chris [00:45:00] Let’s see. A question from Dan. Any specific artificial intelligence stocks that you would recommend?
Nancy [00:45:12] No, not right off the top of my head. I know and I’m sure we have some in the newsletter we will publish our next issue on Thursday this week. And honestly, I finished it this morning. I couldn’t think of a single stock. And it is once it’s out of my head, it’s out of my head. But, you know, I mean, Microsoft is an AI stock. You’d look at some of these big companies. You don’t necessarily have to invest into that cutting edge because what happens with the cutting edge is they do get bought by companies like Microsoft. And and cutting edge companies are extremely speculative. So say you found an AI company that was doing this one little thing. Again, keep it to a small portion of your portfolio and maybe you’ll make a lot of money if it gets bought by a Microsoft. And then maybe you’ll lose your shirt if it doesn’t get bought by anybody. Or, you know, if you’re going to look at those companies, you’ve got to look at what they’re doing, what their specific task is. Are they just like a one note company? That’s dangerous to do that, although it’s really easier to analyze a pure play company. But you’ve got to have a company that just doesn’t depend on one little thing unless there’s one little thing is so good, you know, it’s the next Google or it’s the next Snapchat or something like that, then you can put some money into it. But, you know, I mean, look at some of the bigger companies for AI.
Chris [00:46:34] Yeah. And if you’re looking for a smaller I actually wrote something on stocks under the radar. Artificial intelligence stocks a couple maybe a month or two ago. And the CabotWealth.com site that’s still up there, if you want to search for it, might be a bit dated it’s a month or two ago things have changed so much, but those are smaller AI stocks if people are interested.
Nancy [00:46:58] You can search the Cabot Wealth site, too, for different topics. So if you’re looking for one specific sector, you can go in there and search once you log in and it’ll give you all of our recent articles on there because we all write articles at least a couple of times a month for the website.
Chris [00:47:13] Right. Let’s see. Question from Helen. Are there any communications companies you like right now?
Nancy [00:47:25] Not a particular I mean, again, I would probably stick more with the companies that were interested in 5G. You know, you’ve got your cell phone companies. The AT&Ts, the Verizons and Sprint and all those. I’m not a big fan of any of those companies. Not a fan of the cable companies. We can kind of move from communications into streaming. There are lots of streaming companies out there that look interesting. And of course, now the big players like Disney are getting into the streaming. And so that’s getting kind of all tied up. Although I know I have Roku and they just added like 15 new things that I could pay for if I wanted to. And I I’ve never heard of any of them. So it’ll be kind of interesting to see how that works. But again, streaming, I never really paid much attention to streaming as on a personal level because I don’t watch much TV. I watch it early in the morning and that’s pretty much it. But with more time on my hands in the last couple of months, I decided to do the Roku and the Hulu thing, and somebody had to explain all that to me. But I’ve watched a lot more TV. And I think what that has done, not for me, but for everybody else like me who is not has not been a big TV watcher, is we’re probably going to continue streaming and watching. So those marketplaces have opened up considerably.
Chris [00:48:44] And you mentioned Disney. That’s a good segue way into a question from Suzanne who asks. What do you think about Disney?
Nancy [00:48:52] Yeah, well, you know, I grew up around Disney World, so I love Disney. And I loved the fact that they’d been able over the last couple of decades to really move from the whole park idea and the movies into other things. You know, they were big World Wide Wrestling Federation. And now into the streaming. And they’re doing a really good job with Disney plus. And I understand this subscriber basis is growing exponentially there. So, yeah, I would be a Disney fan. I think the parks are going to be hurt for a while. I think Shanghai opened up recently and I thought I heard that Paris was going to open. I’m not sure if that’s right, but they’ll be back in business but you know, most of their money doesn’t come from the parks anymore.
Chris [00:49:35] I think Nancy, for your beginning of the year newsletter that you do about – you pull everyone, every analyst for their top pick for the upcoming year. Mine was Disney for this year, which didn’t look so good for the first. It didn’t look so good for the first few months, but I still like it because of the Disney plus has done so well and some of the other reasons you just mentioned.
Chris [00:50:00] Let’s see if I think we have time for a couple more questions. Are there any telehealth stocks that you like?
Nancy [00:50:11] Well, you know, you’ve got Teladoc, which I think Mike Cintolo has in his portfolio. I think, Chris, you told me that that was a hold right now. I don’t know much about that sector. I think they’re going to be a lot more companies that are going to play in that sector because of what’s gone on in the last last couple of months. You know, you can diagnose people now. I mean, I was reading something the other day about how radiologist in Hawaii are reading the x rays. And this has been going on for quite some time from people clear across the world from them. And, you know, you don’t have to be in the same room with somebody to do that. I called my dermatologist a couple of weeks ago to see if she was seeing patients yet. No one’s returned my call yet. So I may have to go to Web M.D. or if they’re still around. But, you know, I don’t I don’t know right now which are the major players in there. But it would certainly be a sector I would be interested in looking at.
Chris [00:51:11] OK, let’s see. Question from Florence. Any global or emerging market stocks you like now? You mentioned one earlier. Maybe it’s getting a little late, but there are there any others now?
Nancy [00:51:28] Not right off the top of my head. You know, Carl is really the expert. Carl Delfeld at the emerging markets and global stocks in particular. But, you know, the market is is going to be better, probably. I’m going to say by the first part of the year, I mean, things are starting to recover a little faster in some areas in Europe. And, of course, everybody’s got their eye on China to find out how that’s all going to work out. But there will be some that come up. I mean, some of the companies that I mentioned today. One was a Shanghai company and the other one that VNET and Sea Limited yes, Sea Limited was Shanghai and VNET that was a Chinese company. So anything in the digital realm, I think, would be where I would be going. If I was looking at China, their gaming industry is just pretty amazing. And their whole E-sports in the in the gaming world, which I think VNET participates in those. That that’s a really interesting thing. There I saw something on the news the other morning about the E-Sports and the gaming business. And it used to be, you know, when kids got into the whole gaming world, they were playing games and they were confined to their own game on their own computer. Then they had the micro player games where everybody’s out there playing with each other. And now there are people that bet on just watching other people play games and they’re even doing that in, well they were doing in Las Vegas at the moment, they’re not doing it. But that is a huge, huge area. And the E-players are getting sponsorships just like other sports athletes get sponsorships. So that is an exploding area. I don’t quite understand it myself, but who knows? I mean, the kids and now even adults. I was in a used bookstore before the pandemic hit and I was behind a couple of guys that were probably in their mid forties and they were buying games. I’m like, wow, it’s a different world.
Chris [00:53:24] And I’ll get the last question to Stefan. What do you think about Tesla?
Nancy [00:53:30] Well, I just wrote something for Michael on Tesla just yesterday, and he was that was in the Cabot Top Ten Trader. And the stock has certainly gone crazy. They’ve got new products coming out. They’re supposed to be making an announcement on this new battery that is supposedly going to be good for like a million miles. And and it’s going to be a lot cheaper. They’re using some sort of Chinese technology, which I can’t remember what the word is, but it’s going to change the face of electric vehicles. And they say they were saying some of the articles that I read that it would make them very comparable to buying a gasoline powered car. Yeah. You still have the electric. You still have to charge it at some point time. But the cost is going to come down substantially. Which should really expand the industry. So, you know, Elon Musk is out there. He’s a nut case. But he’s a brilliant nut case. And it seems like most of the stuff he touches turns to gold. I mean, Tesla was, what, like nine hundred dollars yesterday? Eight hundred dollars, something like that. And, you know, it’d done nothing for about a year. And then it just spiked, you know, it spiked with this. And they’re going to do an electric truck now. They got some new models coming out. And as I said, the price. And they just won the battle with their Fremont, California fight with the – I guess it was the city or the county out there, I think was Alameda County that didn’t want him to reopen their factory. But they did anyway. And the county backed down. So Musk has a lot of pull. And I think that, you know, Tesla stock probably still has a ways to go. That doesn’t mean it won’t be volatile.
Chris [00:55:09] Great. Well. Well, thanks for all the questions, everyone. And thank you, Nancy for answering all of those. And do you mind advancing to the next slide? Let me just tell you – tell everyone when our next webinar is. We’ll be back next month. Again, another free webinar on Tuesday, June 16th at two o’clock Eastern, just like today, this time featuring Tom Hutchinson, who I mentioned earlier, who is chief analyst of our Cabot Dividend Investor Advisory titled The American Income Crisis: Plus, Two High Yield Stocks to Buy. So mark that on your calendar. That does it for us. For Nancy Zambell and the entire Cabot Wealth Network team. I’m Chris Preston. We’ll see you next time.