Episode 36: Corona Winners ROUND 1

GRANT: I won, I won!!! Yes, I crushed you. Eat my dust lil’ sis.

MAK: Ok, Ok. You won. Wow, what a great winner you are! You do know that you’ve only beat me a WHOPPING 5 times out of the 100’s of times we played.

GRANT: Yeah, yeah, but I WON, and I won big.

MAK: I agree, but you got in my way, and then you hit me with a hammer, totally not cool. I think I’m done. Do you want to watch a movie?

GRANT: Sure, I think there’s that new movie Artemis Fowl on Disney+…

MAK: Sounds good. But, before we do, I was thinking?

GRANT: About what?

MAK: Well, you know, I was thinking about what dad said last week? That thing about winners and losers.

GRANT: You mean… “Me” and… “You”?

MAK: Ouch, any chance to beat me down big brother? Remember, I’m your little sister.

GRANT: Yeah, you’re only 30 seconds younger than me.

MAK: I know, but it was the BEST 30 seconds of my entire life!!!

GRANT: Ouch, talk about zingers. That hurt. I’m sure you missed me. It was great to have you as my Womb-Mate…

MAK: Nice one. You and I are together sharing mom’s belly.

GRANT: Got that right! You have bony elbows, so I’m sure I was happy to get out.

MAK: Well, who do YOU think is winning and who do you think is losing? And, DON’T YOU DARE…

GRANT: Ok, ok, I won’t mention it again. What if we think about how things changed ever since Corona hit us?

MAK: Sounds good. What if we name things we’ve done more of, since Corona. That’s bound to give us an idea.

GRANT: Ok, that sounds good. I’ll start. I’ve done a TON more Video Game playing.

 

MAK: Crafts

 

GRANT: Home Delivery

 

MAK: Online Shopping

 

GRANT: Watching Movies at Home

 

MAK: Riding our Bikes

 

GRANT: Hey, could it be that easy? Do you think companies that do those things really benefited from Coronavirus?

 

MAK: Makes sense to me. Why don’t we ask dad, and let’s see if he can help.

 

GRANT: Works for me.

 

MAK/GRANT: Dad, did you know we can pick stock winners!!

 

DAD: Honey, OUCH that hurt!! I think you drew blood.

MOM: Well, that’s the last time I cut your hair.

DAD: I agree! I’m really glad I can go and see Cindy at Great Clips again next week, it’s been too long.

MOM: I agree. Having to hear you complain has been way too long. What are the kids yelling about?

DAD: I don’t know, but they usually come running in.

MAK/GRANT: Dad, Dad, we have a question.

GRANT: Hey, what’s the red stuff on the towel?

DAD: Is that your question?

MAK: Did mom clip your ear again? That must’ve hurt.

DAD: It did!! I only wanted a trim, but it looks like I’m getting a red hair dye too!!!

GRANT: Mom, are you going to take that??

MOM: He’s been that way ever since we met. There’s no taming him.

MAK: Ouch, that reminds me of something I read about barbers.

GRANT: With all that blood, don’t you mean something you read about “barbarians”?

MOM: Grant!!! Are you calling your mom a “barbarian”?

GRANT: No mom, I was just saying, if you were, it would be soooo cool. “Kristie the Barbarian”. I love you mom.

MOM: Thanks Grant, I love you too.

DAD: Mak, what were you saying about barbers?

MAK: Well you know that red, white and blue on the barber’s pole. Most spin now.

GRANT: Yeah, I saw that when I got my haircut at the barber in Chicago. Do the colors mean something?

MAK: Well, some people think they are the colors of the American flag, but that doesn’t seem to be the case, since they’ve been around for a LONG time.

DAD: So, what’d you find out?

MAK: Well, barbers in medieval times did a lot of stuff like surgeries, took out teeth and other stuff.

GRANT: Does it explain the colors?

MAK: The pole had a bowl on the top and the bottom. Leeches were in the top one, and you’d hold onto the pole for leeching or bloodletting.

GRANT: Leeching? Bloodletting? What that heck is that? Sounds gruesome, but the blood would explain the “red” is that for the bottom bowl. What about the blue and white?

MAK: Well, blood that doesn’t have oxygen and is traveling to the lungs to get more, is darker. So, when looking at a vein, it tricks your eyes into thinking it’s blue. And the white is for bandages.

DAD: Seriously, that is so cool. Sounds like an optical illusion if it’s tricking your eyes. So, blood and bandages, there’s the BnB again!! Do you know what all that stuff is that the barber did?

MAK: I know what a surgery is, because Grant had one for his arm. But, it’s weird to think a barber would do it. Dentists pull teeth now. The leeches and bloodletting is new to me.

GRANT: I think I’m afraid to ask, but I have a feeling it’s messed up and we don’t do it much anymore.

DAD: You’re right, we don’t. The Egyptians started it several thousand years ago. They believed your body made blood and “used it up”, like gas in a car. If you had too much, you had to “let” some out.

MAK: Are you serious? If you had too much, you were “out of balance” and you had to let some out?

GRANT: I got to say it. That sounds NASTY and MESSY!

DAD: Well, in Greece they even told you how you could “D—I—Y”.

MAK: What? Doesn’t that mean “Do it yourself?”

GRANT: Oh man, that’s weird! I could never cut myself to let blood out. I think I’m going to pass out!!!

DAD: They used it for headaches, fever, internal bleeding and other stuff like the plague and epilepsy. They would do it to your arm or neck.

GRANT: Stay away from my neck. I could never let that happen.

DAD: I read about a guy who was stabbed and they used almost 100 leeches, did bloodletting probably over 20 times and took almost 3 gallons of blood over a 2 month period. He survived but not everyone did.

MAK: Anybody we know?

DAD: Yeah, George Washington. He had a bad throat infection and asked to have it done. In 10 hours, they took a gallon of blood. And he died.

GRANT: Wow, amazing.

MAK: Sounds like the treatment is worse than the disease. I’m not sure I would want that help. What about the leeches?

DAD: Leeches are parasitic worms, which means they live off something, and cause it harm. Kind of like you two living off mom and me, causing harm, like headaches when you fight and using all our money.

GRANT: Not cool dad.

MAK: That was bad, dad.

DAD: It’s kinda true, my wonderful children. Leeches suck out blood from your skin which prevents clotting, or clumping. It’s good to stop bleeding, but dangerous if a clot goes to other parts of your body.

GRANT: Like your lungs, heart, brain or other places? That doesn’t sound good.

DAD: Yep. Leeches are still used to help with some blood issues. They bite you and release a chemical so you don’t have pain. Crazy, huh. Ok, enough about blood, my little vampires. So, what’s the question?

MAK: We were thinking about the businesses that were “winners” due to Corona. And, Grant and I came up with a list.

GRANT: Yeah, we think we have some great ones, that we want to run by you.

DAD: Shoot.

GRANT: Well, funny you say that. I’ve been playing a lot of video games. I know you don’t like the shooting ones, but me and my friends are playing a lot more.

MAK: If more people are buying video games, it has to be good for the company, right?

DAD: That’s a great way to look at it. Video games are huge now, when people are locked down. Grant, which gaming stock did you buy?

GRANT: Activision Blizzard. It has Guitar Hero, World of Warcraft, Overwatch, Tony Hawk and others.

DAD: Do you know what the stock price was before the drop in March, and now?

GRANT: Wasn’t it in the 60’s before the drop, it went down to 52 and now it’s around 75.

DAD: That’s exactly what happened. It went down 16% when Corona hit, as everyone got scared, then it went up 44% from its low, and finished 21% higher than it started.

GRANT: So, if you would have bought when it hit the bottom, knowing more people would play, you would have made money?

DAD: Yep, that’s true. I think EA, Electronic Arts are the second biggest gaming companies. What happened to them? I used to love playing their basketball game when I was in highschool with Uncle Bryant.

GRANT: Seriously? They had games back then? Who won?

DAD: Uncle Bryant slaughtered me. He had this wicked hook shot I could never defend. You could also break the backboard with a slam, and a little guy would come out to sweep up the mess.

MAK: Seriously, that used to happen in real life? Sounds really dangerous.

DAD: It did happen and it was dangerous. I saw a clip of LeBron James doing it in Highschool. They’ve fixed the backboards now. Pull it up on YouTube.

GRANT: That is wicked. Love it dad. So, EA sports still has sports games like NBA Live, Madden NFL, Medal of Honor, Battlefield and more.

DAD: So, what did its stock do before the drop, during the drop and after it?

MAK: I got this one dad! It was about $110 per share, then down to about $87 and back up to around $131.

DAD: So, that’s about a 21% drop, a rise of about 49%, and compared to where it started, it’s up about 18%.

GRANT: Ok, so it goes to show that video games really took off.

DAD: Sure does. For the first time ever, Fortnite is now more popular than football on all the searches by Google. The NFL began in 1920, EA games started in 1982, and Activision Blizzard in 2008.

MAK: Woooaaa. So, the two biggest video game companies started over 60 years after the NFL and are more popular. That’s pretty unbelievable.

DAD: We could talk about video games for a long time, but give me another “winner”.

MAK: It’s my turn. How about watching movies at home, like Netflix.

DAD: Well, what do you think happened? You know that we added Disney+ and watched a couple movies over the next week or so.

 

GRANT: Dad, you binge watched the 8 episodes of the “Mandalorian” two days after we got Disney+. And, we watched 4 Avenger movies that weekend.

 

DAD: Ok, it was awesome. Here’s some trivia for you. It took airlines over 64 years to build up to 50 million customers. How long did it take Netflix and Disney+ to reach 50 million subscribers?

 

MAK: I would think it’s a lot less than that. Didn’t you tell me Netflix started with DVD’s in the mail 20 or so years ago?

 

DAD: Excellent Mak. It actually took Netflix 7 years to hit 50 million, and Disney, only 5 months!!!

 

GRANT: Holy guacamole dad. Disney+ is like a rocket. I guess they released Disney+ at the perfect time while we were quarantined!! At $7/mo, they get $350 million a month!!

 

DAD: Agree. Pretty amazing, huh. So, what happened to Netflix’s stock?

 

MAK: Before quarantine it was $380 per share, then down to $290 and now around $450.

 

GRANT: Dad, that means it dropped 24%, jumped 55% and overall it’s up 18%. Seems like another winner for sure. What about Disney+?

 

DAD: Ok, so is Disney+ the name of the company?

 

MAK: No, it’s just Disney. There is no “plus”.

 

DAD: Exactly, so Disney is made up of all kinds of things. Can you name a couple?

 

GRANT: Theme parks

 

MAK: ABC Television

 

GRANT: A Cruise Line

 

MAK: ESPN

 

GRANT: Lucas Films for Star Wars

 

DAD: They own a lot of stuff. Some things are doing well like Disney+, but the “S” in ESPN, means sports. And what happened to sports due to Corona?

 

GRANT: They stopped having basketball, baseball, football and other sports. So that probably hurt.

 

DAD: You got it G. And, even when the athletes get to play, they will limit the fans who can come. Did you know in Germany, they are selling cardboard cutouts of fans to sit in the stands?

 

MAK: What? Are you saying you can buy a piece of cardboard, with your face on it, and they’ll put your cardboard cutout in the stands?

 

DAD: Yep, I saw one for $20.60 in Germany for the soccer league called the Bundesliga. Wacky huh?

 

GRANT: It’s a whole new world dad.

 

DAD: Couldn’t agree more. So what about theme parks?

 

MAK: We talked about how they had to close ALL over the world, and a couple are about ready to open up. Plus, they can’t let in as many as before. Not good for business.

 

DAD: Exactly. So Disney has many parts to it, and not all are doing well. For example, the Cruise Lines stopped. Their stock went from 140 to 86 to 120.

 

GRANT: So, it hasn’t fully recovered?

 

DAD: No, it hasn’t. It’s dropped about 14% since before Corona until now. Imagine how bad it would be doing without Disney+.

 

MAK: Cool. Well, we definitely saw some winners.

 

GRANT: Just like me beating you!!

 

MAK: OMG Grant, enough. Let’s take a look at some companies next time that haven’t done well. Sounds good?

 

DAD: Sounds like a winner, I mean loser. Ok, let’s just do it.

 

GRANT: Great.

 

MAK: Thanks for being here.

 

DAD: And check out the Mandalorian. Very cool.

 

BOTH: BYE!!!

 

Ben’s 2 Cents

Isn’t this stuff so crazy and interesting? We get an understanding that the market doesn’t like uncertainty. When something big happens, most get affected either in a good or bad way. Then, once the information is processed, there are winners and losers.

When looking back, it’s easy to realize that people are going to watch more movies and play more games if in quarantine. However, the idea of the US in quarantine is really foreign to us all. Hindsight is always 2020. Before we get to the next set of winners, can you think of other businesses that should’ve done well? Some were mentioned in this podcast, but think of some things you saw or thought would’ve happened when we’re confined. Will there be more babies? Will there be more mental health issues? Will more people work from home? Each of those questions could affect different companies positively or negatively.

 

We identified a couple winners in this podcast. Now, let’s move to some losers, as the world changes. As we move to next week, think about who should get hurt. We mentioned some last week. And, if these trends continue, which possible investments should you stay away from?

 

Thanks for being here. It’s so much fun learning about the different aspects of investing as seen through this very real situation that has affected us all. See you next week for another episode of Money with Mak & G, finance for your kids and your family. Bye!