And now, for some fun. Here are some personal insights I drew by looking at the numbers (mostly from Table B-1).
1. Despite the job gains in leisure and hospitality, overall compared to last year it’s still 20% down.
I think this statistic is the best indicator of when we will be truly out of a pandemic and recession. There’s still considerable room for this to grow, and until we hit 90% pre-pandemic levels, I don’t consider the pandemic resolved.
2. Performing arts and spectator sports have also gained, but overall compared to last year is still ~60% down.
I haven’t been to a performing arts show in a long time. I love watching musicals, but I’ve been on at least a 1-year hiatus. Plus, actors/actresses are still struggling in general.
3. Amusement, gambling, and recreation are overall still ~70% down.
A common response I’ve heard to the question “what do you most look forward to after the pandemic” is “I want to go to Disneyland”. With theme parks still operating at ~15% capacity, there’s plenty of opportunities to grow. Based on the above 3 insights, I’m super bullish on DIS stock for the following reasons:
- Their Disney Plus platform has ¾ of the subscribers of Netflix, which is really impressive given their short amount of time. Disney Plus really saved Disney during the pandemic.
- Once people start going to theme parks again, their revenue will return to normal levels. Except now they also have Disney Plus revenue.
- Disney’s portfolio of intellectual property is also incredible. Disney classics, Marvel, Star Wars, etc. too many to be named. And they’re really good at capitalizing on it.
4. Couriers and messengers are overall up ~15%, peaked ~50% in December.
This is interesting. We thought that Uber would suffer from the pandemic because of reduced travel. But despite the 2020 Q1 drop in earnings, they’ve been steadily increasing earnings quarterly. That means Uber Eats, their food delivery service, is stepping in to fill the gap.
Companies that do delivery like DoorDash, Uber (owns both Uber Eats and Postmates), Instacart are currently enjoying a good time. Will this continue after the pandemic ends? Who knows. It’ll depend on people’s habits and whether they’re willing to pay for delivery as much. I personally don’t because I find it pricey. But I’ve never really had a good pulse on what’s popular.
However, since Uber also does rideshare, even if Uber Eats and Postmates usage drops, their rideshare business will start to pick up again. So I think Uber has a solid projection post-pandemic.
5. Rental and leasing services overall down ~20%, still dropping.
Not surprising that this has gone down, since most of the rental and leasing services reside in expensive working cities like San Francisco, New York City, Los Angeles, etc. If you can telecommute, why bother living in an expensive place? The fact that it’s still dropping hints that this won’t recover to pre-pandemic levels. Employees who can telecommute will likely want to preserve some of the telecommuting aspects of their job, and employers probably don’t mind the reduced cost of commercial real estate.
That said, I don’t think people will want to work at home all the time. It’s difficult to maintain a separation of work-life, and if you have kids or pets, they can distract you from work. Therefore, I think there’s a chance for co-working spaces to fill in those gaps.
Okay, I know what happened with WeWork back in 2019. But hear me out. They kicked out Adam Neumann and filed for IPO not long ago. Here are some reasons:
- Commercial real estate will drop in price if companies don’t renew their leases. That means reduced costs for WeWork.
- Despite the niceness of telecommuting, people are social creatures and crave human interaction. WeWork’s community can fill in that need.
- For telecommuters who aspire to become nomads, WeWork has office locations all around, and can also fulfill that need.
- Their recent bad PR not only makes them cheap to buy but also puts them under a lot of scrutiny. That means they are under pressure to perform well. The perfect discount!
Whew. I’ve never broadcasted my market predictions ever before. What do you think? I’d like to hear your thoughts (and feedback too if you think I’m way off or if there are other thoughts you’d like to hear from me). I’m considering doing video-breakdowns on stock-picks, so I’ll take any and all feedback.
That’s all for now. See you next week!