Episode 35: Hachoo!! Does the stock market have Corona?

GRANT: Hey, Mak. 

MAK: What’s up? G? 

GRANT: Do you know what happened when you start early? 

MAK: I do G you go wealthy, it’s time for money with Mak and G

GRANT: Finance for you and your family. 

MAK: G starting season seven and we’re out of school things have lined up and we’re not completely locked down in our house anymore. 

GRANT: Amen to that. This summer is going to be rock and roll. 

MAK: But things are still a bit different than before. 

GRANT: Yeah, I agree. You see a lot more masks when we go out kind of like Halloween. 

MAK: But everyone’s dressed as a surgeon. 

GRANT: And companies have been doing things they’ve never done before. 

MAK: Like what? 

GRANT: Well, some companies were giving their products away for free to help others during this crazy time. 

MAK: Like what? 

GRANT: Well college students were kicked out of their dorms where they lived. They only had a couple of days to move out. 

MAK: Oh, is that when you hold give students free storage since they had little time. Their business is storage and moving? 

GRANT: Yep. Isn’t that cool? Did you hear about the Hertz rent a car in New York? 

MAK: No. What did they do? 

GRANT: When things are bad? buses and Metro weren’t running as much as normal New York. So they give healthcare workers free cars to use an APR. 

MAK: No way. That’s awesome. Sounds like a good way to put those cards in use, since people aren’t driving as much 

GRANT: Agree. And they got some great advertising for their company by helping out health care workers, people like that. 

MAK: Well, I think it’s pretty cool that they’re doing that. Did you hear about HBO? Is that the company called Home Box Office, which is similar to Netflix, you can watch movies at home and stuff. 

GRANT: Sure is they wanted people to have extra shows that they could watch for free during quarantine. 

MAK: That was really nice. 

GRANT: Good call there. Kroger, the grocery store around the corner and all over the country is paying their workers $2 more per hour for hazard pay. 

MAK: Is that due to Corona? 

GRANT: Yep. Because they were required to work around customers, they had more chances to get corona. 

MAK: I didn’t know that so many companies are affected. Do you know if these good things increase the company’s business? 

GRANT: Not sure. But hertz recently went bankrupt? Because fewer people are driving as we spoke about in our oil podcast

MAK: But HBO may have gotten a lot more subscribers to watch their movies if they like what they saw for free. 

GRANT: That sounds like a winner. I wonder which companies are doing well and which ones aren’t? 

MAK: You know, the stock market is doing some weird things too. 

GRANT: Yep. 

MAK: The Dow Jones was around 30,000 and mid February and then late March it dropped to around 18,600. But now it’s up by a lot when the price of company stock is based on expected performance and things are positive. The market takes a big hit. 

GRANT: That’s right. There’s definitely uncertainty due to Corona some companies are crushing it while others are getting crushed. 

MAK: I guess you could say the stock market dot Corona 

GRANT: Couldn’t have said it better myself, sister. 

MAK: Let’s see if dad has any insights. Dad. Does the stock market have Coronavirus?

DAD: Hey guys, I’m a little busy right now. What’s going on?

GRANT: Why are you wearing those funny glasses, dad? And what’s the thing you’re holding?

DAD: Well, I need the glasses so I can see these tiny tiny things I’m making.

MAK: What is that tiny, tiny thing?

DAD: Well, it’s a grizzly clink hammer.

GRANT: What kind of thing is that? It’s fuzzy but you said it’s some kind of hammer dead? What is that one right there?

DAD: That’s a Philip Bloom dragon

MAK: What did you just say that some sort of Dragon. I think you’re making it up. Is that in one of grants games? 

GRANT: No. I don’t remember any Philo plumes. That does not sound real. Next to tell me that’s an epoxy buzzer Oh no, you didn’t say that.

DAD: Yep. How the heck did you know that over there is an Irish sleep up Papa Roach and a beaded bloodworm

GRANT: Are you serious? This one looks super soft. Ouch. What the heck, I’m bleeding. How?

DAD: Oh, I’m so sorry, honey. I should have told you. These are fishing hooks used to catch fish. Let me get you a band aid.

GRANT: So those weird names are different types of bait hooks.

DAD: Yep, there’s a stimulator over there. And right here is a wooly bugger. They’re used for what’s called fly fishing.

GRANT: Isn’t that what Uncle Tom loves? And you use all that stuff to make flies?

DAD: You Yep, all of it. 

GRANT: So fish love these things and want to eat them? 

MAK: Even yarn.

GRANT: In the feathers. 

MAK: And for. 

GRANT: The thread. 

MAK: 

With one hook,

DAD: You got it. They look like small insects that fly or swim really small fish or other things the fish really liked to eat.

GRANT: I guess they don’t have great eyesight because who would eat a feather wrapped in thread with fur hanging on it?

DAD: Where did it go? Where did it go?

MAK: Sounds like fish.

GRANT: Nice Mak but dead I fish with Uncle Bray. And these are too late to be able to catch bar.

DAD: Excellent. point G was fly fishing, you can cast or throw the fly only because the fishing line is heavy. Not because the hook is heavy, like the fishing uncle Brian took you to.

MAK: So you’re learning how to make these. You have to wrap the hook with thread and other stuff. 

GRANT: Are there a lot of them?

DAD: I’m learning how to tie the different knots. And there are so many types you can make. I like to experiment with my own types. That one’s called a mecha. Grant. It’s very relaxing and requires focus when you guys aren’t yelling at me.

GRANT: Sorry, dad. We just wanted to know if the stock market caught Coronavirus. Many companies are sick if that’s the right way to say.

DAD: I think that’s an excellent way to say it. We’ve spoken about companies which are financially sick before. And that’s what’s happening to many now.

MAK: So which ones are getting sick and which ones are getting stronger?

DAD: You both know what a microscope is right?

GRANT: Of course, it’s an instrument that helps you look at small things.

DAD: Excellent. Because micro means small, tiny, tiny, tiny, tiny. And do you know what macro means? That’s huge.

MAK: Well, if a Big Mac is a big sandwich, macro probably means big.

DAD: It does. But I think Mac comes from Mac Donald’s. But that’s great insight Mak.

MAK: Okay, so why are you asking about micro macro?

DAD: Well, if we look at the economy really, really close, that’s micro, if we look at it from far away, that’s macro, you may buy one Big Mac. But the world buys 900 million a year. That’s huge. That’s micro for you versus macro for the world.

GRANT: So when business may be doing well. But if we look at all the businesses doing the same thing and may tell a different story.

DAD: Exactly G man, when we talk about similar businesses that make most of their revenues from similar goods or services, that’s an industry do you guys know any industries.

MAK: Sure thing grant how about you start 

GRANT: Car industry? 

MAK: Entertainment.

GRANT: Education. 

MAK: Construction. 

GRANT: Farming. 

MAK: Real estate.

DAD: Excellent, guys. So it’s better to look at things on a macro level by industry. A big one that has really been affected is the hospitality industry. Do you guys know what that is?

GRANT: Is that for hospitals? That sounds like hospital Edie?

DAD: That’s a great guest G, I love the IDI but it comes from Latin which means host guest or stranger. Can you guys name some businesses that host you or treat you as a guest?

GRANT: How about restaurants? 

MAK: They host people.

GRANT: Or hotel? Aren’t you a guest when you’re at a hotel? 

MAK: Dad? What a theme park like Disney World b1. They always say Be our guest. There’s even a song, ‘Be our guest Be our guest service to.’

DAD: Sherwood a theme park is part of hospitality. You guys are nailing this thing. What do you guys think has happened to all the restaurants theme parks, hotels, airlines. You related travel companies which are considered hospitality.

MAK: We already mentioned that airlines got money from the government to keep working since no one was flying. And if they aren’t flying, they probably aren’t going to Disney World or staying at hotels or eating out.

DAD: I am so hungry. Excellent. You know that Disney World isn’t actually open for a while. Still, states have forced hotels to close down for a period of time too, because they didn’t want to spread Corona. So do you think hospitality is doing well?

GRANT: No, that doesn’t seem like they can cover their expenses. Are there a lot of people unemployed now?

DAD: The numbers have gone up and now there are 10s of millions who are unemployed due to Corona in total right now around 15% of people who want to work are unemployed, but in hospitality it’s been over 40% You did it What the heck

MAK: Ouch! that’s terrible. So are some hotels doing okay or even good?

DAD: Sure. That is a micro view when you only look at one or a couple. Some are close to full because of where they are located or something unusual like being converted to handle Corona patients. But most hotels aren’t 

GRANT: Dad. What about Las Vegas? What’s going on there?

DAD: Since Las Vegas has a lot of hotels restaurants and hospitality, it really got hurt. Nevada had the highest state unemployment rate because so much relies on gambling and the businesses that support it and hospitality.

MAK: So those public companies and Vegas evil those probably saw decline their share price.

DAD: You betcha. When you have lots of expenses, but no one at the hotels, restaurants, shows and other activities, those companies lose money, and they’re not really sure, but it’s about expectations, remember,

GRANT: Yep, if an investor thinks that will turn around quickly, like a vaccination mole calm, then maybe their stock price isn’t hurt as much or bounces back quickly.

DAD: Excellent point G, the stock market responds favorably when there is a good sign this will be over quickly, or the government is going to help us get back on track.

MAK: Okay, so good news makes the stock market go up? That makes sense.

DAD: Exactly. I think you can say the stock market did catch Corona. And when there is a vaccine, then more than likely the stock market will be cured.

MAK: Gonna look at a couple Industries at a macro level and figure out how they have been affected.

DAD: Sounds good to me. This will help out a lot to understand better how the stock market responds, but it’s the same with any investment. things always happen that affect the value of what you bought.

MAK: It’s a little depressing. So do you think we can talk about a couple of industries that are doing well?

DAD: Absolutely. Because there are several. There’s usually a good and a bad side to things a little yin yang.

GRANT: Okay, Dad’s making up words again, probably time to say goodbye.

DAD: You guys have a lot to learn. I’ll just leave it at that. Okay.

MAK: Next week, we’ll talk about companies doing well. I love it. Thanks, dad.

DAD: Bye. Corona has created a number of situations requiring help from not only our government but also businesses. several businesses have stepped up to help from rental cars storage, companies buying masks and equipment to give away or given away their product for free. This can really help a company reach their identified audience and also create Goodwill for the company that will increase revenue and profits. During the quarantine a fair amount of companies are doing better, but many have been hurt. Even with the help from the government. From an investing perspective, it’s important to understand how the situation affect different industries and companies. Sometimes bad news affects all companies until an investor can wade through the information and see what applies to different companies.

Now in March, the market overall dropped significantly. You can think of boats on the water. If the water goes down, all boats go lower. So news from Corona affected everyone. But now some are going higher and others are hit as the information has been processed. There are definitely winners and losers on this situation. Let’s dig into a couple of industries this season and understand why they have been hurt or see how they will benefit from the situation right now. We aren’t sure if or how much additional help we’ll get from the government. Therefore, I’ll continue to encourage each of you to do your best to conserve cash and watch your expenses. Please stay safe and healthy. And we’ll see you next week with another episode of money with Mak and G.