Catching Our Breath and Repositioning…And The Big Get Bigger

Bear market rallies are fierce.

We have now rallied 20-30 percent off the panic lows of a few weeks back. The markets are set to open another 3-4 percent higher again.

Two weeks ago I changed my Twitter handle to ‘The Nibbler’ and wrote ‘A Bear Market Plan‘. The plan has worked and I am booking profits and repositioning my portfolio in a way that might better benefit from how I see the world post COVID. Overall I believe the big get bigger especially in technology.

This morning will be a much better day to panic and reposition. Historically, we have always gotten these days and weeks of relief rallies to that allow people to reposition. Of course the market could continue to rally straight to all-time highs and beyond, but odds are the bear market will last a while longer.

On March 24th. I summed up some ideas from all my ‘Panic With Friends’ podcasts.

Now we will see the large technology companies begin to more aggressively position themselves as leaders in these trends.

Somewhere last week I read a Zoom stat that boggled my mind. Their market cap was larger than 50 percent of the US airline industry. I know that meant a lot to Google, Microsoft and the other competitors in the space that want that business now too.

Microsoft is taking the early lead being ‘evil’ as they continue to try and crush Slack ($WORK) with their ‘Team’ products. They will be offering those same ‘Team’ products to teachers and schools instead of the much better Zoom product who have ‘chinese security’ issues. New York schools have already said yes to Microsoft and no to Zoom. It is likely only Google Class will be able to compete at this new level of war.

Is it fair?

Who knows. The government is busy printing money and fighting with each other.

Does Starbucks care if the corner coffee stores are out of business? NO. They are thinking through COVID safe mobile pick ups and drive throughs.

Does Shake Shack care about all the corner store ‘gourmet’ burger competition. NO. They are out getting the small business loans that were not even designed for them.

The big get bigger!

Elsewhere, few noticed, but Bitcoin is now flat on the year…and gold is up this year. Yes Bitcoin is more volatile than any other asset, but it sure seems durable in a crash and liquidity crisis. I am long Bitcoin and no bearish argument makes sense to me anymore. I will just continue to hold.

The good new for startups that come out of this bear market strong will be that recruiting good people will be the easiest it has been in a decade.

Eventually the start-up investing narrative will switch back to stories of success like ‘The first unicorn born on a Zoom pitch where the founders never had to meet their investors in person’.

I have no idea if this is one week, one month or one year out, but the narrative is being written.

Hope this helps get the juices flowing…