To say that the stock market has returned with a low since March would be a massive underestimation. As of July 28, the S&P 500 was flat for this year and was 47% higher than where it was bottom at the end of March – a remarkable increase in a few months.
However, this does not mean that we are from the forest. The COVID-19 pandemic continues at alarming levels and things can get worse before they get better. Just to name a few hypothetical scenarios, state governments in hard-hit areas could choose to shut down their economies to slow the spread of the virus, and unemployment could remain in double digits until 2021. Economic activity has been largely supported by government support, and Congress may have difficulty agreeing on any further initiative. And the market expects the vaccine to be ready for use by the end of 2020 or early next year ̵1; although it certainly looks likely, it’s not a given.
The point is that the market could certainly collapse again before the pandemic ends. And two stocks to own, if so, are Walt Disney 04.30 NYSE: DIS and Berkshire Hathaway (NYSE: BRK.A)(NYSE: BRK.B)Here are the reasons why these businesses are well placed to get into difficult times, and if the economy recovers quickly, it will prosper.
Regeneration stock and times of stay at home
Disney has apparently fallen victim to the COVID-19 pandemic in several ways. Amusement parks with a cow’s cow stopped when the pandemic worsened, and although Walt Disney’s world has reopened, crowds are limited and unlikely to bring anywhere near their usual level of income. In addition, Disney’s cruise will remain off and there is no way to know for sure when the cinemas will reopen on a large scale.
Still, Disney brands are strong enough to get into difficult times. After the end of the pandemic, the demand for theme parks will be as strong as ever. Disney’s numerous film series are likely to bring billions to the box office again. And at some point, Disney’s cruise ships sail again.
Meanwhile, the pandemic has disrupted Disney’s young streaming business. The company has set a (seemingly ambitious) target of 60-90 million subscribers by 2024. As of May 4 this year, it was 54.5 million. It is entirely possible that Disney will reach its goal of 2024 this year.
In short, Disney has enough liquidity to handle it in difficult times, and since then it has been doing a great job of building a massive stream of recurring revenue in the meantime. Disney is about 20% lower than the year it started, no matter how the rest of the pandemic takes place.
Buffett finally puts the money to work
Investors have been disappointed by the lack of investment in Wark Buffett, CEO of Berkshire Hathaway, for several years, when the company’s cash flow rose to $ 137 billion by the end of the third quarter. And that makes sense – it’s more than a quarter of Berkshire’s market capitalization, which sat and made virtually no revenue.
However, this seems to have changed recently. Berkshire’s recent acquisition of the company It’s Dominion (NYSE: D) natural gas assets and the purchase of an additional $ 1.2 billion in 2007 American bank 04.30 NYSE: BAC actions show 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 further investment opportunities. And with a set of mainly recession-resistant companies like GEICO and many public operations, Berkshire is well positioned to remain profitable no matter what the stock market or the economy does.
Two excellent long-term investments
To sum it up, Disney and Berkshire are two stocks that work well in good times and can also allow you to sleep soundly at night, knowing that if the stock market collapses again, they are relatively safe stocks that should be managed through turbulence in one piece.