8 8 Corona virus and technology stocks(including stay at home stocks) One of the best stock performers in 2020 is Zoom Video which is up in a really difficult market. Wow but it is so speculative and its very expensive. Stay away unless you like RISK! Other tech stocks are more interesting including Amazon which is certainly already discovered but less speculative Unlike Zoom it is cash flow positive making it attractive at the right price. Many like Netflix but its profitability is mixed and streaming is becoming more competitive. It does have a better position outside America however. More interesting are the gaming stocks like Electronic Arts, Activision Blizzard etc. Many of you have spent the last few weeks playing games. These are interesting but have not done the required research to invest. I have invested in other tech stocks such as Facebook, Google, and others. Facebook and google have great moats(barrier from competitors) but will find the economic weakness hurting ad sales where they make much of their money. Longer-term they face political risk and inflation risk. Inflation risk would be created by extreme stimulus creating inflation in 2021 and 2022. Higher inflation means companies cash flow become less valuable to stocks price. (these growth companies have benefited the last few years from low inflation and interest rates) Pick a company in the technology area that will do well in the next few years and why as well as 1 challenge. 9 Corona Virus and the stock market. The US stock market is down 35% as the Corona Virus and the government mandated economic shutdown to fight the pandemic. First the market is a leading Economic Indicator so you buy stocks because of the economic future expected by end of 2020. The first order priority is get a handle on the raging Corona Virus. Trying to halt the spread has sent GDP and jobs plunging. The market wants bold action by the feds and a flattening of the curve such as seen in Korea and China but not Italy or the US. This means greatly expanded tests and medical supplies needed, Second market wants bold economic stimulus so growth is robust once this pandemic wanes. Federal reserve has been bold and market wants president and congress to be bold as well, As of March 23 a fiscal stimulus in contemplated and soon after it was passed with the greatest stimulus in US history. Now the market has rebounded dramatically as fed money and a more possible outlook on vaccines and opening of economy How will we know when market will resume its move downward move ?First no one knows. I would like to see a reduction in market volatility. However do not let feelings or psychology adversely affect your investment success. Most people if cash is available should itch in slowly buy buying an index fund that matches the overall stock performance. For example suppose you have 10,000 bucks. Invest 1000 now and put other 9000 over the next 9 months. This policy of dollar cost averaging is great way to deal with this kind of volatility. Should the corona virus affect your investments? Why or Why not. Hint if you have a short-term time horizon yes but probaly not if time horizon is 20 years or longer