To say that the stock market went back from its low levels in March with revenge would have been a huge estimate. As of July 28, the S&P 500 was flat for the year and was 47% higher than where it stopped at the end of March – a noticeable drop in a few months.
However, this does not mean that we are still out of the woods. The COVID-19 pandemic is still moving at alarming levels, and things can get worse before they get better. Just to name a few hypothetical scenarios, state governments in affected areas may choose to shut down their economies to reduce the spread of the virus and unemployment may remain in double digits until 2021. Economic activity has been greatly strengthened by government support. , and Congress may have trouble agreeing on any other stimulus. And the market is assuming the vaccine will be ready to go by the end of 2020 or early next year ̵1; while that certainly seems likely, it’s not given.
The point is that the market could certainly collapse again before the pandemic ends. And the two stocks they have if they do are Walt Disney (NYSE: DIS) u Berkshire Hathaway (NYSE: BRK.A)(NYSE: BRK.B). This is why these businesses are well positioned to do it in tough times and are also set up to thrive if the economy recovers quickly.
Stock for recovery u the times of stay at home
Disney has obviously been a victim of the COVID-19 pandemic in several ways. Its theme parks for cattle cows have closed as the pandemic has worsened, and although Walt Disney World has reopened, crowds are limited and are unlikely to get anywhere near the its typical income level. In addition, Disney’s cruise line remains shut down, and there’s no way to know for sure when movie theaters will actually reopen on a large scale.
Having said that, Disney brands are strong enough to get through these difficult times. When the pandemic is over, the demand for theme parks will be as strong as ever. Many Disney movie franchises are likely to bring billions back into the box office. And at some point, Disney’s cruise ships re-sail.
Meanwhile, the pandemic hit Disney’s young streaming businesses. The company had set a (apparently ambitious) target of 60-90 million subscribers by 2024. Well – there have been 54.5 million since May 4 this year. It is entirely possible that Disney has reached its goal for 2024 this year.
In short, Disney has enough liquidity to get through it in the tough times, and is doing a good job of building a massive stream of recurring revenue in the meantime. With about 20% less than where the year started, Disney is a stock that has no question of how the rest of the pandemic plays out.
Buffett is finally putting the money to work
Investors have been disappointed with Berkshire Hathaway CEO’s lack of investment action for years, as the company’s cash grew to $ 137 billion by the end of the third quarter. And it makes sense – this is more than a quarter of Berkshire’s market capitalization that was sitting generated virtually no profit.
However, this seems to have changed recently. Recent acquisition of Berkshire Dominion’s (NYSE: D) natural gas assets and the purchase of another $ 1.2 billion in Bank of America (NYSE: BAC) Stock shows that Buffett and his team can finally see the compelling opportunities they have been waiting for.
If the market collapses again, it could open the door to even more investment opportunities. And with a collection of mainly recession-resistant businesses such as GEICO and its many utility operations, Berkshire is well positioned to remain profitable no matter what the stock market or economy does.
Two excellent long-term investments
In short, Disney and Berkshire are two stocks that work well during good times and can also allow you to sleep soundly at night when you know that if the stock market crashes again, they are relatively safe stocks that should make it. through turmoil. one piece.