Friday File: Rethinking Coronavirus Impact for my Portfolio Companies (and adding a few)

This week I try to assess the real-world business impact of the crisis on many of the companies I own, and also sell a couple and buy more of a few favorites -- with three new positions in the Real Money Portfolio today.

By Travis Johnson, Stock Gumshoe, March 20, 2020


Thank you for coming back and reading my musings week after week, we here at Stock Gumshoe would not exist if not for the attention and generosity of readers like you. I don’t say it enough, I’m sure, but I really appreciate you being with us… and having the patience to slog through these sometimes long and blathery Friday postings.

So what’s going on this week?

The Fear & Greed Index from CNN is, no surprise, right near the very bottom at “extreme fear” as it has been for a few weeks, though it was a hair lower a week ago than it is today — that’s not a measure that’s directly actionable, but it helps to put some context on what we’re seeing and remind us that yes, to a large degree the market is a seismograph of human emotions. It’s pretty amazing to see some of my stocks rise and fall 20% in a day based on just a feeling about whether the coronavirus outbreak is under control or, alternately, out of control — none of which can really be based on anything except hope or fear just yet.

The next few weeks will obviously be critical for the spread in the US, and in terms of numbers reported it will get a lot worse before it gets better, just because the virus probably spread very actively in the weeks before we started closing schools and canceling travel (and, of course, because our tepid federal response in February, without early testing or rapid implementation of pandemic plans, probably set us back), so there will be a lot more scary numbers coming out, probably every day, but we still don’t really know whether the attempt to “flatten the curve” by pausing the economy will work.

We know it will work to send us into recession, to be clear, that’s essentially inevitable at this point with millions of people becoming abruptly unemployed, and thousands of businesses will go bankrupt without strong government support as a result, which will snowball the impact… but the nature of these things is that we can’t know if we acted too strongly, or not strongly enough, until long after those actions are taken. I am hugely encouraged by the coming-together I see in my community, and by the spirit of resilience exhibited, and the urge to help those at the ...

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