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Barron's: 10 Stocks to Buy Now Amid Virus Market Chaos

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By    |   Wednesday, 04 March 2020 08:51 AM

There are bargains to be found in the rubble of the recent coronavirus stock-market selloff, as uncertainty threatens to send shares spiraling out of control after any given news headline.

“The black swan event that Wall Street has long feared materialized with the coronavirus epidemic, rattling equity markets and badly shaking investor confidence after an 11-year bull market,” Barron’s recently explained.

“The old saw is that the one thing Wall Street hates more than anything is uncertainty, and that is true now. The coronavirus impact on the economy and profits is difficult to quantify, and investors fear the worst.”

Berkshire (BRK.A) and technology leaders like Alphabet (GOOGL), Microsoft (MSFT), and Apple (AAPL) that have cash-rich balance sheets and durable businesses are sensible bets offering shelter to investors, market experts told Barron’s.

“Berkshire is cheap and misunderstood after all these years,” says Larry Pitkowsky, manager of the GoodHaven fund (GOODX). Berkshire’s big cash position provides Buffett with the “ability to be a capital provider when markets are in disarray.”

Experts urge investors “to stick with the strongest companies, including a defensive Verizon Communications (VZ) in telecom, JPMorgan Chase (JPM) and Bank of America (BAC) in banking, Comcast (CMCSA) in cable television, and Chevron (CVX) and ConocoPhillips (COP)” in the hard-hit energy sector.

“This is scaring the heck out of people, but it’s rapidly revaluing stocks,” says Jim Paulsen, strategist at the Leuthold Group. “The odds are this will turn out to be good deal for investors that ultimately results in higher highs later this year.”

However, two of the best performing macro hedge funds of recent weeks have a tip for investors: buying the dip in stocks may not work this time, Bloomberg explained.

“This could become a textbook bull trap: the market rallies, you think it’s over, mommy and daddy are going to intervene,” said Quadriga Asset Managers’s Diego Parrilla, referring to central banks and governments. “If this doesn’t really play out, it’s game over.”

This time around, the stimulus could prove impotent. Haidar Capital Management’s Said Haidar expects the spread of the virus, which has so far infected more than 90,000 people and killed over 3,100, to drag out. 

Investors have been “trained like monkeys to buy the dip,” said New York-based Haidar, whose Jupiter Fund gained 7.8% in February. “If you look back far enough, there were periods when buying the dips were a disaster and could be again this time.”

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Coronavirus is  a wake-up call for investors—and also an opportunity.
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2020-51-04
Wednesday, 04 March 2020 08:51 AM
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