How to deploy capital in a recession (+Corona)
I've worked in venture and mid/large cap PE (no public experience). I admire guys like Marks. I was still in school during the last recession so this is my first go round. I have been staying relatively liquid in anticipation of a downturn such as this one, so as to capitalize, but now that we are here, I realize I'm not quite prepared.
How do I decide where to deploy my capital?
from what I can tell (based on my incoming fund) the recession sucks, the number of investments were low, but created a high return environment once the exits were realized. it seems everyone made a lot through carry and coinvesting. thoughts?
buy stonks. specifically dollar general. just added shares at 150 a pop. did a through analysis, looks real clean. low beta, good cash flows and the new ceo is doing a superb job at raking cash and returns to the shareholders
back in 2008, after Lehman (Sept 15), there were 2 bailouts. 1st the banks on Oct 3rd 2008, second the mainstreet economy on Feb 17th 2009. The stock market didn't bottom until March 6th 2009.
So, long story short, the stock market will go lower. S&P 500 around 2000 should be the bottom and the place to deploy capital. Broad economic activity has been constrained, and that constraint is only going to become more acute. The market is not able to see very far into the future...so every bought of bad news will send us lower in waves. Leveraged players will be forced to sell (those that have not already). The market has a tendancy to punish weak hands...and there is more punishment to dole out.
Wait for another 1-3 months...thats where we should see the bottom. Then buy. Tech stocks should perform better...so just buy the QQQ ETF when the S&P gets to 2000.
You can’t put a price target on sp right now. They could close markets tomorrow. Spend the next 2 weeks fixing plumbing in financial system. Unveil a huge stimulus and the market reopens April 1 at 3200.
If I had money to invest now I'd put it slowly in the stocks I know will rebound (companies like Google, Microsoft, JPM, etc. won't go bankrupt and have a lot of room to grow even if you don't account for the recent losses), so I don't lose the upturn when it comes while hedging from further downturn. There's no time to buy like in a recession.
You could make the same case that an airline, say, Delta, today, is like Ford in 2008?
also, Buy Pinterest stock (PINS)...they are way undervalued and are just starting to monetize.
MGM stock is down 50%!!! bargain...buy buy buy
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