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– Monday
– Tuesday
– Wednesday
– SKIP THURSDAY
– Friday
STRATEGY: Week 1 of 2021 proves “violence in America” an important investment theme
US ramping up vaccinations sharply… pace to hit 1 million per day this week…
The pace of vaccinations in the US continues to surge. The statistics for 1/9 (Saturday) were not released, so we only have data through Friday. But as shown below:
– Friday vaccinations rose +25% vs Thu
– Thursday vaccinations rose +31% vs Wed
So you can see the pace is really ramping up sharply.
US vaccinating at 3X the rate of confirmed cases = getting ahead of the curve…
We have plotted the vaccinations vs confirmed cases ratio and you can see this has ramped up to 3X currently.
– at 1 million per day, this would be ~5X
– at 5X, the US is vaccinating faster than “estimated infections”
Thus, the good news is the US is now getting ahead of the curve on vaccinations.
The amount of vaccine in inventory far exceeds the pace of vaccinations administered. As Dr. Scott Gottlieb points out, 47 million doses of vaccine have been administered and about 7 million dosed. That is 40 million sitting in inventory.
And over the weekend, we got more good news as the Pfizer COVID-19 vaccine is shown to work against the new UK mutation. Thus, the pace of vaccinations remains a key metric to watch.
2021 Investment theme #5 –> Personal Security in an increasingly violent USA
In late December (2020), we added a fifth investment theme for 2021 –> Violence in America.
At the time, we reflected on the combination of lingering scars:
– from nationwide protests and destruction from BLM
– shock from COVID-19
– loss of faith in Washington and law enforcement from 4 tumultuous years of policy
Violent crime has been rising in the US over the past few years. And we did not think this visible rise in US crime would necessarily recede quickly, even as the US economy seems set to stage a robust rebound in 2021.
And the events of the past week in Washington, in my view, are symptomatic of a greater challenge facing America. That Americans are taking action in their own hands outside of legal avenues, possibly because of the loss of faith in institutions.
– it was almost vigilante-like, the storming of the Capital building
But is this something worse? Is America becoming more violent?
2020 homicide rates reversed 30-years of progress…
According to data by @Crimealytics, Jeff Asher (a freelancer at fivethirtyeight.com), homicides in the US are up 37% in 2020. That is simply a staggering surge. In cities at the heart of the BLM protests, the rise is even greater:
– Milwaukee +95%
– Minneapolis +72%
– New Orleans +62%
So 2020 was clearly a violent year in America. In fact, Richard Rosenfeld, lead author of “Pandemic, Social Unrest and Crime US Cities” notes that 2020 homicide rate exceeds the rate of the late-1980s and 1990s. This is simply astounding
– 30 years of crime mitigation have been reversed in a single year
– is it reasonable to expect 2021 to be any better?
Taking a step back, if the drivers of crime are the combination of: social dissatisfaction, loss of trust in institutions, and vigilante-like action, then I am not sure this is something that simply reverses if the US economy strengthens. Moreover, I remember from my criminal justice class in my undergrad years (an elective), increases in criminal activity are difficult to reverse quickly because of the multiple negative feedback loops involved. In other words, history would say 2020 surge in homicide is not a fluke but an unfortunate turning point
We know that Americans will want to protect themselves from this increase in violence. There are simple solutions and more complex:
– simple –> more to suburbs/low crime areas –> deurbanization
– create distance –> home security, car security, more to suburbs
– create deterrence –> sentry products, home and personal security
– create defense –> weapons, self-defense
– create defense against cybercrime –> security software + Bitcoin
Stocks that benefit from “Violence in cities”…
We have put together a list of companies that are involved in some aspect of home or personal security. This is an initial list and it will expand as we find additional ideas.
– We are not “recommending” these stocks, but rather, bringing these stocks to your attention.
Video Surveillance
– Digital Ally (DGLY)
– FLIR Systems (FLIR)
– Iteris (ITI)
– NAPCO Security (NSSC)
– NXT-ID (NXTD)
– Recon Technology (RCON)
– Stanley Black &Decker (SWK)
– Ubiquiti (UI)
Home Security
– ADT (ADT)
– Alarm.com Holdings (ALRM)
– Arlo Technologies (ARLO)
– The Brinks Company (BCO)
– Fortune Brands Home & Security (FBHS)
– Honeywell (HON)
– Monitronics International (SCTY)
– Vivint Smart Home (VVNT)
Personal Security + Other
– Axon Enterprises (AAXN)
– Image Sensing Systems (ISNS)
Drones
– AeroVironment (AVAV)
– Ambarella (AMBA)
– Boeing (BA)
– NVIDIA (NVDA)
– Parrot (PAOTF)
– Plymouth Rock Technologies (PLRTF)
ADDENDUM: We are attaching the stock lists for our 3 portfolios:
We get several requests to give the updated list for our stock portfolios. We are including the links here:
– Granny Shots –> core stocks, based on 6 thematic/tactical portfolios
– Trifecta epicenter –> based on the convergence of Quant (tireless Ken), Rauscher (Global strategy), Sluymer (Technicals)
– Biden vs Trump –> based on correlation to either candidate odds
Granny Shots:
Full stock list here –> Click here
Tickers: AAPL, AMZN, AXP, BF.B, CSCO, EBAY, GOOG, GRMN, GWW, INTC, KLAC, LEN, LOW, MNST, MSFT, MXIM, NVDA, OMC, PM, PYPL, QCOM, TSLA, XLNX
Trifecta Epicenter (*):
Full stock list here –> Click here
Tickers: AN, GM, F, HOG, GRMN, LEG, TPX, PHM, TOL, NWL, HAS, MAT, PII, MGM, HLT, MAR, NCLH, RCL, WH, WYND, SIX, DRI, SBUX, FL, GPS, LB, CRI, VFC, GPC, BBY, FITB, WTFC, ASB, BOH, FHN, FNB, PB, PBCT, RF, STL, TFC, WBS, PNFP, SBNY, NYCB, MTG, AGNC, EVR, IBKR, VIRT, BK, STT, SYF, BHF, AGCO, OC, ACM, WAB, EMR, GNRC, NVT, CSL, GE, MMM, IEX, PNR, CFX, DOV, MIDD, SNA, XYL, FLS, DAL, JBLU, LUV, MIC, KEX, UNP, JBHT, R, UBER, UHAL, HP, NOV, SLB, EOG, PXD, HFC, MPC, PSX, XEC, LYB, EXP, MLM, CF, MOS, ESI, NEU, NUE, RS, SON, STOR, HIW, CPT, UDR, KIM, NNN, VNO, JBGS, RYN
Biden White House vs. Trump White House:
Full stock list here –> Click here
(*) Please note that the stocks rated OW on this list meet the requirements of our investment theme as of the publication date. We do not monitor this list day by day. A stock taken off this list means it no longer meets our investment criteria, but not necessarily that it is neutral rated or should be sold. Please consult your financial advisor to discuss your risk tolerance and other factors that characterize your unique investment profile.
POINT 1: Daily cases at 217,873, +9,026 vs 7D ago –> still holiday distortions
The latest COVID-19 daily cases came in at 217,873, up +9,026 vs 7D ago.
– 7D delta rose to ~70,000 last Friday, but don’t forget 7 days before last Friday was New Year’s Day
– hence, the holiday effect is going to cause distortions for several weeks
– over Thanksgiving, it was not until a full two weeks after Thanksgiving that underlying trends were visible
– this will be the case with current data, meaning mid-Jan is when we can start to get a better handle on trends
The 7D delta has been positive since the Christmas weekend
– because of holiday scheduled closures/etc, distortions in the data will be prevalent until mid-Jan
– so I would look at trends with a grain of salt
POINT 2: Vaccinations on pace to reach ~1 million Americans per day this week
The pace of vaccinations is ramping up sharply, as we noted above. And this increase suggests that vaccinations could reach that 1 million per day pace soon.
And as we noted above, the ratio of vaccinations to cases is becoming more favorable, meaning the US is gaining traction against the vaccine.
The key is for the states/regions to get to that 60% level of combined infections + vaccinations. Presumably, daily cases should slow as a region approaches this level. As shown below, two states are closest:
– North Dakota 53% (4% vaccinated + 49% infected)
– South Dakota 51% (4% vaccinated + 47% infected)
I guess the positive news is these 2 states do seem to be showing a pronounced downward trend in cases. So is this evidence of approaching herd immunity?
– maybe… I hope so!
POINT 3: Positive surprise COVID-19, infection induced remission of Hodgkin Lymphoma
Sometimes out of tragedy is created positive serendipity. The article from BJH is one such story. It is about a UK man who was admitted to the hospital with end stage Hodgins Lymphoma.
– this patient caught COVID-19 while afflicted with late-stage cancer and suddenly went into remission
His prognosis was so poor, he was discharged to die at home, with no medicines or treatments given. This was partially due to the fact he was also infected with COVID-19.
Yet, 4 months later, he survived, and shockingly, it looks like he had a drastic reduction in the levels of tumors across his body (see scans above). In fact, doctors hypothesized that COVID-19 triggered some type of anti-tumor response.
– wow.
– does this mean, COVID-19 could play some future role in battling cancer?
That would be mind-twisting
