Ephemeral, or Not

 Here at “The New World,” we are committed to bringing you the newest and most compelling news about the post-COVID world.

Doesn’t that sound great?  What it means is that I spend a lot of time reading articles and Googling “post-COVID future.”  Sometimes it’s even fun!

I don’t know a lot about CNBC (we’ve never had cable TV) but it’s apparently a real thing, and they have apparently hired a somewhat bizarre ranter named Jim Cramer who says he wants to make me some money.  Well, not me specifically, but you get the idea.

So Jim Cramer, who shouts and emotes and gestures as if his market analysis has driven him to the brink of a breakdown, recently laid out what he thinks is the market’s predictions for the post-COVID future.  After reminding us of the second law of the stock market* - “The market’s a forecasting machine, which reflects expectations about the future, much more than facts about the present… We don’t care where stocks have been; we care where they’re going.”

That said, here is his list of “permanent” and “ephemeral” trends for the future according to the performance of relevant stocks.

Permanent:
Peleton -  This upscale exercycle company was struggling a year ago, and then suddenly no one could go to the gym – at the beginning because the gym was closed, but more recently because the gym chain you used to go to is bankrupt.  Home exercise – and the machines we use at home – will be a permanent fixture of the new world.  Apparently, if you spend that much for an exercise machine, there’s little motivation to abandon it and pay even more for a gym membership.
Wayfair – Here’s a company that was about to lay off 550 employees in February – and then suddenly everyone was working from home.  And needed office furniture, and a comfortable place to work.   Wayfair’s stock went from 21 to over 300.    Cramer says it’s here to stay, and so is RH,** which has been around a very long time but has had a “magnificent run” in the COVID market.  

Ephemeral:
Cooking at home – Packaged foods are still selling well, but their stocks are not – suggesting that the market thinks we’ll all go back to eating out four to five meals a week, on average, when this is all over.  Remember restaurants?
Boating – Brunswick, a big maker of recreational boats, is “out of boats, with giant backorders,” but the market does not see this continuing indefinitely.  For what it’s worth, Cramer thinks they’re wrong.
Used cars – Carvana is a used-car company with a contactless business model that essentially offers “vending machines for used cars – you don’t have to talk to anybody.”  This model was in place before COVID, and for obvious reasons it’s hot now.  The market says it’s here to stay.  Who wouldn’t want to buy a used car without dealing with a used car dealer?

And so forth.  The best way to travel right now?  AirBnB, as long as you book the entire house (which is often the same price as a nice hotel room, but without the other guests) and bring the sanitizing wipes.  RVs – a really safe way to travel – are selling well now, but the market seems to think that won’t last in the new world.

So, watching the stock market seems like an interesting way to start sketching the outlines of the new world.  All this, of course, depends on whether we’ll continue any of the behaviors that are necessary now, in the new world, when they’re not necessary.  And how far away we are, and what monsters lie ahead.


* - The first law of the stock market is:  “The stock market is not the economy.”

** - RH used to be Restoration Hardware; it’s where we got replacement hardware for the Victorian furnishings in the antique houses we bought and restored.  Now, apparently, it’s a (very) upscale Wayfair.