Covid19- Don’t Panic, Invest
Covid19- Don’t panic, Invest💰 - Almog Ohayon - Medium
Part 3- My investing strategy:— — — — — — — — — — — — —We know one thing for sure- we don’t know.Investing must start with your personal assumptions and it’s completely up to you to define them according to your risk, liquidity, etc…I am a long term investor, when I buy stocks I forget about them for at least 2 years. I choose companies that I believe in their business and vision.This is the specific filter I choose to invest during the Covid19 pandemic:Stocks- i’m going to do cherry picking for excellent companies rather than investing in their ETFs. It is 30% ROI vs 300%, worth the risk and i’m not going to bet on oil futures.Large cap- companies with market capital higher than $5bn. to me it’s representing a lower risk, even though it’s not always true.Great business- i’m trying to find well known companies who already managed to survive the biggest crisis over the last 20 years.Mid/long term holding- at least 2 years of ROI and I don’t care if it would be a 4 years recovery. Nobody really knows what our life would look like in the next year or so.Low risk of bankruptcy- companies with enough cash liquidity for the upcoming year, 6 month for example is high risk, government dependency is high risk.Different sectors- diversified portfolio are a must have design for any type of investor, you can’t really estimate the impact accurately so diversity would lower your risk dramatically.Let’s Go!!!Currently there are 2 different approaches for me to find companies based on the filter above.Screener #1:I have downloaded a few leading large cap ETFs like “S&P 500” and sorted them by downgrade, meaning stocks who “suffer” the most in terms of 52 week high price to their current price.From there I was trying to find well known companies that I’m familiar with, for example Carnival Corp- NYSE:CCL.Now obviously it’s not enough and the next step is trying to see if the stock plunged only because of this pandemic panic.You can see easily from the graph that through the last year the stock is pretty stable between 40–50 price and only around mid-February, due to the Covid19 panic, it was plunged:https://seekingalpha.com/symbol/CCLIf this is not enough, Saudi Arabia fund has taken a major stake in Carnival and bought 8.2% of their shares which leads to more confidence in their short term liquidity.Screener #2:The second approach was taking specific sectors like airlines or real estate, find the top 5 companies in it and start a research.As I was saying before, I’m “greedy” and I want to find great companies who deep dive the most only because of this temporary panic, to get hopefully 300% ROI within 2-4 years.Let’s take for example Real Estate sector(REIT):I personally believe that consumers will get back to malls, theaters and other crowded places with 1 year from now, worst case. If this assumption is wrong then REIT risks are much higher.There are a few major reasons why I choose eventually Simon Property Group inc.(NYSE:SPG) among other companies in their sector, and it’s aligned of course to my filter criteria above:Large cap stock, great business, exists 27 years, ~ $2bn net income annually.low financial leverages and good short term liquidity.Higher Enterprise value- it’s better indicator for company real value than simple market capital:https://www.investopedia.com/terms/e/enterprisevalue.aspLast Words 🎙️I agree that there is a big risk with my strategy but I’m trying to minimize it with some good filters and hopefully my underlying assumptions are not completely wrong.These 2 stocks are active positions of mine and i’m trying to find more attractive companies like these. Feel free to suggest your ideas in comments below ⬇️Don’t panic, Invest wisely 💵🧐