Sharing here for posterity; from my Reddit comments that I posted over the weekend:
Here are the usual caveats: I’m just a guy in my bedroom. I don’t have a fancy MBA or work at some prestigious, boutique financial firm. I’m just a guy trying to day/swing-trade for a living in my humble abode. Watching the show, Billions, back in 2016 is what first piqued my interest. And I started actively trading at the beginning of 2019.
One: Re hard economic data and China– It’s a country of ~1.4 billion people. Because of the one-child policy that lasted for decades, there’s also a pretty big M/F gender disparity. Additionally, in such a top-heavy government, Xi cannot afford to look weak for much longer; his COVID-19 honeymoon is quickly waning, IMHO. Many big companies are already highly automated anyways. Those of them that aren’t will simply throw human bodies at the assembly lines to meet production quotas again, regardless of infections. Remember, there are no human rights in China; it’s a communist state. Either come to work or you’re fired and will never work again anywhere for the rest of your days. I recall that scene from Chernobyl where the workers were already so badly radiated that they decided to just keep shoveling the uranium “for the greater good.” In times of crisis, humans lives (esp in communist states) are forfeit and cheap in the mission of the almighty dollar/RMB. Gotta keep the engine of capitalism humming! (There’s great irony in this, I know.)
Two: Looking forward, what is the strategic macro picture? Here’s my speculation for several moves ahead on the board:
- Meat-space is going to get increasingly more fraught. I currently live in an apt rental complex and I already see those Amazon Prime vans making multiple trips a day delivering stuff to our complex. Millennials are already reluctant to go outside. My God, back in my day, going to the mall, getting pizza, and hanging out at the arcade was a thing. Nowadays.
- The other day I was in line at our local Walmart (when times are good, it’s Target and Whole Foods. When times are like now, it’s Walmart and Aldi’s) and some guy ahead of me was in line was trying to use multiple gift cards to make a huge purchase. There was some problem with the register and the whole ordeal took something like ten minutes as the queue grew increasingly long, with everyone inline growing considerably annoyed. Yes, there was something like twenty registers, but only three were manned at the time (it was a weekday afternoon). I mean, seriously, can you blame millennials for not wanting to venture out into meat-space? It’s awful.
- So back to now: What are the implications of COVID-19? Will it make meat-space more attractive or less? You do that math. My feeling is that the Coronavirus will just accelerate what had already been a growing trend: People doing more commerce from home, people being more entertained at home, etc. I’m a big follower of a16z and their big claim to fame is “Software is Eating the World.” I wholeheartedly believe in that. This is why I currently have huge positions and am overweight in memory and semiconductors. I believe in more datacenters, more people going online (according to Andreesen, only half of the global population is currently online. Vast swathes of South America, Africa, etc are still in the queue, etc), and that basic human way-of-life is fundamentally changing.
- Also, I do believe we’ll eventually figure out crypto. And that translates into (my belief, anyway) a big/bright future for semis and memory. Long AMD and MU!
Our current president is transparently corrupt. The one thing, as far I can tell, that he cares about most is himself. I’m sure somewhere he’s invested lots in the market, personally. Also, he has lots of rich friends. The only thing Trump can really hang his hat on atm is America’s record bull run. Trump will move heaven and earth, legally or otherwise, to make sure the market doesn’t fail. That’s what sets him apart, IMHO, from previous presidents who were bound by things called “laws” and “norms.” You’re welcome to bet against a megalomaniac who currently controls 1.5 of the three branches of the American government (maybe even 2.5/3, if you count SCOTUS) who only cares about himself and his own wealth. Personally, I’m aligning my own interests with his.
Also, I sincerely believe –especially if it ends up being Bernie or Biden– that Trump is a virtual lock in November.