Barron’s Weekend Summary: A dozen top investors, economists, and academics share their insights about a post-Covid world
* Cover story: Barron’s interviewed a dozen top investors, economists, and academics to share their insights about what the world will look like now that Covid-19 vaccines are on the horizon; Among their concerns are runaway debt, China’s ascendance, the impact of climate change, and the government’s ability to deal with future crises. 1) Nestlé chief Mark Schneider has encouraged a shift toward higher-margin products and e-commerce, leaving the company better positioned to adapt to consumer habits changed by the pandemic; 2) Louis-Vincent Gave of Gavekal offers insights into global macro risks such as the financial implications of China’s rise; 3) Economist Stephanie Kelton discusses how the pandemic is creating an opportunity to address structural deficiencies in the way society has organized healthcare, global supply chains, and the distribution of income; 4) Historian Niall Ferguson says Bitcoin is the best investment opportunity in a post-pandemic world; 5) Jens Nordvig of Exante Data talks about how to invest in the recoveries of the world’s hardest-hit economies; 6) Marc Lasry, chairman and chief executive of Avenue Capital Group, says that things will return to normal within two years, but that the recovery will be uneven; 7) Historian Adam Tooze argues that there is a huge disproportion between the scale of the pandemic problem and what we spend to resolve it; 8) Karen Karniol-Tambour, director of investment research at Bridgewater Associates, believes China is the biggest investment opportunity for Americans; 9) Afsaneh Mashayekhi Beschloss, the founder and chief executive of RockCreek, discusses why climate change is a major investment opportunity; 10) Nobel Prize-winning behavioral economist Richard Thaler, a co-founder of Fuller & Thaler, says overconfidence could be investors’ biggest mistake in a post-Covid world.
* Tech Trader: +/- DoorDash: The food-delivery startup’s initial public offering, set for this week, should be a blockbuster, but there are concerns—with coronavirus vaccines set to reach the masses in the coming months, people may order in less as they return to restaurants, so the company’s strong metrics are probably as good as they are going to get.
* Trader: Mark Stoeckle, CEO and portfolio manager at Adams Funds, says some of the big growth names that have lagged during the pandemic now look like smarter bets than “reopening” names such as cruise stocks, and he believes reopening “euphoria” will fade; Positive on GS, BK, FITB, TFC, PACW, CMA, CFR: The incoming Biden administration shouldn’t pose a problem for bank stocks—early Biden appointments are less disruptive than feared, and even if Democrats take the Senate, the chances of a financial industry overhaul are minimal.
* Features: 1) Positive on ABNB: The home-sharing startup could hold one of the hottest initial public offerings of the year—with its asset-light business model and global presence, the company is poised to benefit from a rebound in travel, especially by 2021 and 2022, when the world should normalize from widespread vaccinations; 2) Financial planning package offers a checklist to help people successfully manage their money, and a story about how women—who despite their growing economic clout still aren’t managing their money—can best take control of their financial lives.
* Profile: Lisette Cooper, vice chair of Fiduciary Trust International, has long been troubled by the growth in online child exploitation, and made preventing it a part of her professional work years ago, such that she is now taking an activist investor stand at FB, which she hopes will take steps to end criminal use of the platform.
* Emerging Markets: Mexico “has been through tumult over the past two years, with a leftist president taking power, a calamitous collision with Covid-19, then a rally on vaccine-driven optimism,” but among emerging markets, the country is still a magnet for fixed income, and investors should opt for its bonds over its stocks.
* Commodities: “Gold prices have climbed sharply in 2020, but they are still off more than 10 percent from the record high in August. The moves cap a year rocked by a pandemic that led to economic restrictions and fiscal stimulus measures, feeding the precious metal’s appeal as a haven investment.”
* Streetwise: Market timing is hard, and selecting stocks to sell confounds even the best—Michael Hartnett, chief investment strategist at BAC, says investors should be prepared, since vaccines will bring a mirror image of this past March, when investors reached maximum pessimism.