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Memorial Day: Warriors of "New War"

In US last Monday of May is  observed as Memorial Day to remember the soldiers who had fallen while serving in US Military. Its somber day to remember the men and women who gave their lives to protect the freedom and security of Americans and all the people of free world. This year world is fighting a new war against invisible enemy. So in addition to fallen soldiers, let's also remember the new warriors!

  • People who lost their lives prematurely due to COVID-19 infections
  • Healthcare professionals who are fighting the war against the COVID-19 virus
  • Economists and policy makers who are working non-stop to limit the economic damage caused by lockdowns
  • Small businessmen who are fighting for survival of their small businesses while protecting employees who work for them
  • Teachers who adopted to remote teaching to make sure that their students continue to get educated 
  • Class of 2020: The seniors who are graduating this year are missing one of their biggest celebrations in life of graduating from high-school or college. All the congratulations, celebrations and parties have moved to virtual. There is no "Walking". I am proud of Class of 2020 that they have adopted to virtual graduation celebrations for larger good of containing the spread of virus.
  • The researchers who are working frantically to find the new and faster ways of testing, cure and vaccine
  • Big companies who are looking after their employees and communities
  • America is fortunate to have "General" Powell who is leading the war on economic damage to avoid another depression and "General" Dr. Fauci who is guiding the policymakers regarding balance of saving lives (against virus) and livelihoods (against lockdowns)
Despite all the bad news about spread of virus (closing on 5 million infections) and deaths caused due to COVID-19 (reaching 400,000) and depression era economic reports (40 million unemployed, 20% unemployment, 40% GDP contraction), Markets seem to be looking forward to second half of 2020. After record breaking gains in Apr, markets are ignoring "Sell in May and Walk Away" mantra and inching towards milestones (DOW 25K, S&P 3K and Nasdaq 9500). Till now the markets were led by high-techs and cyclicals. In last few days, participation is widening with energy and financials companies participating in the upward movement. One should start looking into sector rotation from "WFH" companies to "Get Out" companies. That means sectors like energy, leisure, in-person shopping in malls, restaurants should start getting some attention. Many stocks in these sectors have gone up significantly over last few weeks. Many companies are declaring bankruptcies (JC Penny, Hertz, Neiman Marcus and more to come). The stocks of many established and large companies are still down by 40-60%. So if you can find the survivors from the debris, this could be once-in-decade opportunity to build long-term diversified portfolio.

That's all for now. Let's remember the fallen on this Memorial Day and fight the war on virus together!

/Shyam


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