Warren Buffett once said “Be fearful when other are greedy and greedy when other are fearful”. Buffets strategy to weather the storm has paid huge dividends. When markets are churning and a sound investment strategy seems out of reach, utilizing Warren Buffets advice of being greedy when others are fearful will help to maximize profits for your portfolio. Let’s take a dive into a few stocks that we can capitalize gains off of during the global pandemic of COVID-19.
Netflix (NASDAQ: NFLX)
With Markets on shaky ground due to the COVID-19 pandemic, governments are ordering citizens to stay indoors. Netflix has been the go to for everyone staying at home and to break the monotony of loneliness and boredom. Since the beginning of the bear market netflix has seen a return on investment of 43%.
Amazon (NASDAQ: AMZN)
Today everyone is indoors and although they may be at home, a lot are working from home offices. At first glance you may think of Amazon as just a retailer that can provide household essentials to help increase investor profit. But, 58% of Amazons operating income is derived from their cloud services. With people staying home and working from their home offices, Amazons cloud services provide an additional stream of investment profits. Since the beginning of the market downturn, Amazon has seen a return on investment of 37%.
Facebook (NASDAQ: FB)
With parents and children staying home, our downtime may be spent browsing social media to stay in contact with family and friends and help to alleviate boredom and loneliness. But, Facebook is more than just a social media outlet! Facebook is one of the biggest sources for advertisement that provides revenue on a global scale. Add in the fact that Facebook also own Instagram, WhatsApp, Oculus VR, Onavo and Beluga then you have a company that creates revenue from several different sectors. Facebook has seen an increase of 22% since the start of the market sell off.
Disney (NYSE: DIS)
Some may ask, why would I want to invest in Disney with theme parks closed? The answer to this is that Disney is more than just a tourist attraction with theme parks on a global scale. Disney also owns some big names like Marvel Studios, Pixar Studios, Lucas Films, Touchstone Pictures, ABC, Lifetime, The History Channel, A&E, ESPN, HULU, Disney+ as well as some smaller companies that close out their asset list. One common theme amongst the list of companies that they own, is that each one of the listed assets in their portfolio can be watched on your television or streamed. With everyone staying at home there is a huge increase in streaming movies, videos and some of your favorite television series. As of April 15th 2020, Disney has reported that they now have 50 Million subscribers to Disney+ since launching four months ago. It took Netflix seven years to accomplish that task. Internet service providers have also reported a 70% increase in streaming since government mandated stay at home orders were put into place. Since the start of the selloff Disney has seen an investment growth of 9% and more potential to grow higher after travel bans are lifted and the economy returns to normal.
These are just a few stocks that we should be targeting during the bear market. Identifying stocks that have a significant potential for growth will help to maximize profits and set you up for futre succes.