Adventures in Quarantine (and the Stocks I’m Focused on as a Result)

You may have heard by now that my family and I are “enjoying” a self-imposed quarantine here in the Pacific Northwest because my wife and our oldest son have just returned from Japan.

We’re still only a few days into the suggested 14-day period, but there have already been a few surprises as you might imagine.

Some of which are actually good.

And, more importantly, potentially very profitable, too.

Here’s what we’ve learned so far.

First and foremost, you don’t realize how many points of contact you have with your loved ones until you can’t have any… contact that is. Marital bliss takes on entirely new importance when not even a hug is an option.

Same with our boys. Just a simply pat on the back for a great grade or to say goodnight becomes something you think about.

We’re also getting good at separating linens, utensils, and pens. Having been in China during the Avian Flu and with recollections of SARS running strong in my brain, we stocked up ahead of time.

This week we’ve begun taking delivery of our groceries using Instacart, a privately held company offering “last mile” delivery services from stores like Safeway, Costco, Fred Meyer, Petco, and more.

I have no doubt that our family has likely played a substantial role in boosting Jeff Bezos’s income by shopping on Amazon Prime … and I’m only half joking. The cost of this little adventure has not been inconsequential.

Like many people we’re noticing certain supplies like wipes, zinc lozenges, disinfectant sprays, and the alcohol sanitizer have vanished online just as fast as they’ve vanished in stores.

While we haven’t needed to visit a doctor – and God willing we will not, we have established our online medical connections just in case.

Some of the surprisingly funny moments include realizing:

  • How much yardwork I’ve been ignoring
  • People who tell you a disinfectant smells like lavender have probably never smelled real lavender in their lives
  • Our dogs think it’s tennis ball time… all the time
  • Paper books are really worth reading!

We’ve been truly humbled by the support of those around us. People have offered to drop supplies off or even shop for us if we give the word. Others folks we don’t even know have kindly reached out through social media offering kind thoughts, encouragement, and even prayers – all of which are welcome.

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We don’t have to be in quarantine – there’s nobody telling us to remain home – but doing so is the right thing to do even though nobody in our family is symptomatic at this point. Japan is a high risk country – Level 2 on the CDC scale.

At the same time, we are keenly aware that the situation is very different for a lot of folks.

Our boys are both young men, so they can adapt, but single parents or parents with young children are going to struggle. School is a place they (the kids) go and we (the parents) support from home, but suddenly this role has reversed with home becoming the center for both activities.

At the same time, we are on a pretty good-sized and heavily-wooded property which means we can go outside without fear of running into anybody else. People in urban areas will not have that option which will, in turn, cause a lot of mental stress, and I’m not sure that’s entirely recognized yet.

Economically, we can withstand the challenge because my work is tied to the financial markets – all of which is accessible right over the Internet. Others simply will not have that option.

Unbelievably, there’s a silver lining.

Three, actually.

First, my wife and I wake up thankful to do so and glad to be with our boys every day. That counts for a lot even though it seems so inconsequential.

The decision to self-isolate, while challenging even in the early days, has allowed us to rediscover a life free of distractions. Both our boys have – thanks largely to my wife – turned into engaging, intelligent, and interesting young men.

Second, rushing anywhere for any reason is no longer needed, a trait I think will change when more people share our “discoveries” as the coronavirus situation evolves. The slower pace our ancestors enjoyed really is valuable which is why we’re using the time together to discard a lot of “interference” in our lives.

And, third, life will change which means there are a number of key buys, including stocks that suddenly aren’t “boring” anymore.

Like The Clorox Company (NYSE:CLX).

Clorox bleach will not only whiten anything (including the dark pants I mistakenly put in the washer earlier today!) but kills 99.9% of germs on contact, including the coronavirus. It’s grown dividends for 43 consecutive years and is a fabulous choice for income starved investors.

The company’s stock is a bit richer than I’d like to see at 26.42X earnings but that’s something I think will change as the world recognizes this company’s renewed importance and perspective changes.

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Alibaba Group Holding Ltd. (NYSE:BABA) is another favorite of mine. Long viewed as the “Amazon of China”, I think the better play is the company’s new artificial intelligence – AI for short. Nikkei’s Asian Review reports that Alibaba’s AI can detect coronavirus with a 96% accuracy rate within seconds – and, I don’t doubt that for a moment.

Simultaneously, Alibaba is THE go to for more than 500 million Chinese who are now movement restricted or under lockdowns of various severity.

The company that really interests me, though, also perhaps one of the most speculative available under the circumstances – Novavax Inc. (NasdaqGS:NVAX).

The company’s stock has shot up 165.3% since the beginning of the year and is obscenely priced at $10.56 per share for such a small company with a market capitalization of just $459.79 million.

Like many competitors, Novavax is working on a vaccine for the coronavirus. What catches my attention is the pending publication of field research data for an experimental flu vaccine called NanoFlu.

The company could be a “hero” if the vaccine works and data bears that out but it could just as easily turn into a “zero” if the late stage trials fail to live up to expectations.

That’s why you’ll want to treat it accordingly if you’re inclined to pick up shares.

I suggest you use appropriate position sizing to control risk or simply NEVER bet more than you can lose! Many traders consider the 2% Rule applicable to an opportunity like this one, meaning that you don’t invest more than 2% of investable assets in a given trade.

In closing, thanks for being a part of the Total Wealth family, for the trust you place in me as well as the many kind messages, emails and calls I’ve gotten about our experience.

Speaking of which, how are YOU holding up?

What are you seeing in your home town?

How has the coronavirus changed your behavior or travel plans, if at all?

What stocks interest you as a result of all this?

Do me a favor and comment below; I’d love to hear from you!

Until next time,


Keith

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