I'm not rich, but I sure want to be. And thanks to COVID-19: I. Smell. Money.
There are few things that I love more than a good arbitrage opportunity, and as I mentioned in my previous post: I'm 100% confident that the US economy (and the world economy for that matter) will make a full recovery sooner or later from the repercussions of this pandemic (my bets and hopes are on sooner, but 🤷). A post-COVID-19 world may look drastically different, but it will still be thriving just like it was before.
The stock market is extremely volatile right now. Some stocks are tanking, and I think this a great time to "buy low" (i.e. make lots of money).
During these hard times I'm pouring a lot of my savings (reminder: not much, I'm poor) into some stocks that I plan on holding long-term and others that I plan on flipping quickly. Here are exactly which stocks, how much I bought, what price I paid for them, and why I bought them.
This post is still a work in progress. I'll update the numbers as they change throughout the COVID-19 outbreak.
Tesla
Stock: Tesla (TSLA)
Shares Bought: 2
Average Price: --.--
Reason for purchasing: I am looooong on Telsa. I believe it is a brilliant company with a brilliant product, brilliant business model, that it is run by a brilliant man and that it is highly underrated by the majority of of investors. Until any of those things change, I love this company, I love everything it stands for, I will continue investing in it, and I don't plan on selling any shares, possibly ever (unless I am desperate for cash, and even then: Tesla shares will be one of the last things to go). I think this will become my biggest stock market win in the long run and I'm glad I can buy in at a huge discount thanks to this crash (on top of what I already believe is a huge discount).
Netflix
Stock: Netflix (NFLX)
Shares Bought: 1
Average Price: --.--
Reason for purchasing: Netflix is just a company I like. I'm personally a customer of Netflix, and I love what they're doing. Their innovative and aggressive business model is something I've always liked. Unfortunately their stock price has not dropped drastically on the COVID-19 news (it also hasn't skyrocketed, like every TikToker ever seems to think 😂). One way or another, I'm buying some NFLX now and so I'm including it in this list for completeness.
Stock: Facebook (FB)
Shares Bought: 1
Average Price: --.--
Reason for purchasing: I am investing in Facebook for the medium-term (10-ish years). I am buying into this company mainly based on what Gary Vaynerchuk says about it. Call me stupid (for investing in something based on advise from a stranger), call me naive, call it risky... I don't see it that way. I think Gary makes very wise bets in his life (and he is putting his own money in FB stock). That alone is enough for me to invest in it... but to top it off, my own observations in the behavior of FB — the acquisitions of e.g. Instagram and Whatsapp, the attempted acquisition of Snapchat, the constant innovation, adaptation and improvement of its products, among other things — validate my already practically blind trust in Gary's outlook. I'm not confident Facebook is a "forever" company. I don't absolutely love it. I don't love everything it stands for. I think it's making smart moves right now, but I also believe that that can change any day. I love their "If we don’t create the thing that kills Facebook, someone else will" mentality... but I also don't like the way Zucks is acting when it comes to Instagram dominating Facebook (but I'll give him a little benefit of the doubt, as I take everything journalists say with a grain of salt, anyway). I do plan to sell my shares in 10-ish years — maybe sooner, maybe later. As with Tesla, I'm taking this volatility as an opportunity to start buying in even cheaper than I anticipated.
Stock: Redfin (RDFN)
Shares Bought: 30
Average Price: --.--
Reason for purchasing: If you don't already know: I'm working on becoming a real estate agent in the near future. Even if I don't become an agent, I plan on investing in real estate and building my wealth with it. I've taken a huge interest to real estate recently and one name that you can't ignore in US real estate right now is Redfin. It's an online platform that helps you find homes and agents or even acts as an agent and aides you in buying a home, it estimates home values, etc. It's basically Zillow, but in my humble opinion: better. I really like what successful real estate agent, YouTuber, and Entrepreneur Kevin Paffrath said in a recent video of his... to paraphrase him: as an agent, if Redfin comes to dominate the market in the future and takes away all my agency business, at least I will have bought enough Redfin stock which in that eventuality will have grown enough in value to make up for my losses — it's like an insurance policy of sorts.
What I like to call "lottery stocks"
The following stocks I'm buying even though I know basically nothing about them. I don't really particularly like them... Honestly, just seeing them in my portfolio gives me the chills. I want them gone ASAP (<4 years), but I think I can make a quick profit (around 100%) on them before then.
Roku
Stock: Roku (ROKU)
Shares Bought: 5
Average Price: --.--
Reason for purchasing: I was at an airport in early December 2019 and started flipping though a Bloomberg Businessweek... in which I noticed a section on predictions from their analysts for some stocks in 2020. They predicted that ROKU is positioned to yield a 1-year return of 107.5% (the largest gain I noticed in all their predictions). When I got the chance I watched some interviews on YouTube with the CEO of Roku... He didn't make a great impression on me, but he said some things I vibed with. I figure COVID-19 might postpone this gain, but I'm still game for taking the risk, especially since I can buy in even cheaper now.
Delta Air Lines
Stock: Delta Airline (DAL)
Shares Bought: 10
Average Price: --.--
Reason for purchasing: I heard Warren Buffet bought a lot of DAL because he believes they are available at a huge discount now. I know nothing about Delta Air Lines. I've never even flown Delta (as far as I can remember). I think Warren knows what he's doing, though. I'm also confident that Delta isn't at huge risk of bankruptcy (because the government will bail them out), and really: I think that investing in just about anything blue chip right now will make me money in the short term, so DAL is as good a stock as any... only better because a really rich guy who knows a lot about investing is putting his money into it's taken a bigger hit than most other companies.
May update: as the pandemic progresses, the outlook for airlines is much duller than it was previously. Warren Buffet sold all his airline holdings completely, despite purchasing a large position in DAL just a few months ago. I am not going to sell my position. As I said going into this: DAL and UAL are huge lottery ticket stocks to me. I don't have very much money invested in them anyway, so I'll just take the loss if need be. I realize this is a very risky play, but I'm comfortable taking it. I just hope Warren and everybody is wrong, and airlines will return to relatively normal operations soon OR innovate in some way that allows them make more money (because as everything is now, it's very clear why everyone's outlook is so poor: it's basically impossible for airlines to make a profit right now).
United Airlines
Stock: United Airlines (UAL)
Shares Bought: 3
Average Price: --.--
Reason for purchasing: Basically the same reasons I bought DAL, minus the Warren Buffet tip.
Conclusion
These are really hard times for a lot of people and businesses. I wish you all nothing but good health, productive time spent at home, lots of valuable time spent connecting with family and friends, and a quick financial recovery when this is all over.
Thank you so much for checking out this post. Stay safe, enjoy your time in quarantine, and don't run out of toilet paper!
