Brick and Mortar Winners in a Post Covid World

Before I get started…

Zoom zoomed past Exxon in market cap yesterday. At some level that makes sense as Zoom is the fuel for 2020 economy. Between alternative energy and COVID, I have no idea if Exxon can regain past glory.

Next up…

JC does a fun weekly show with me where we talk about the markets and a few favorite ideas, and his team does a great job of slipping in great edits to make it funny and worth sticking around. Here is this week’s episode.

Someone on Twitter had fun with the video and put this photo together with the tagline: Howard (when his portfolio was banks and energy) and Howard (when his portfolio went all digital).

Onwards…

Gavin Baker offers up a great piece of research and writing titled Why category leading brick and mortar retailers are likely the biggest long term Covid beneficiaries. The gist:

I believe the biggest long term beneficiaries of Covid will prove to be category leading brick and mortar retailers. By this I simply mean brick and mortar retailers who have dominant share in a category — whether it be home improvement, general merchandise, electronics or any other retail category. Their destiny has likely changed forever. Many of the perceived Covid winners such as e-commerce, videogame and streaming media companies have simply been pulled a few years forward into a future that was inevitable. Their destiny did not change. The future for those businesses simply accelerated whereas the future for category leading “brick and mortar” retailers has changed dramatically as a result of Covid, more so than for any other business of which I can think. It is likely that food delivery and videoconferencing companies are also permanently advantaged due to Covid, but the change in ultimate outcome is not as extreme as I think it will be for category leading brick and mortar retailers.

Make sure you read the whole piece.