The 21st-Century Pearl Harbor Moment
On Dec. 7, 1941, the Empire of Japan launched a surprise attack on Pearl Harbor.
The losses were tragic: 2,335 Americans died, four U.S. battleships sank, and the financial costs were astronomical.
It’s a date that, as President Franklin D. Roosevelt told Congress the next day, “will live in infamy.”
Today, many of us already think of the COVID-19 pandemic as another tragedy that “will live in infamy.”
And while the two events are very different in many ways, one thing is clear.
Historians will look back at both as the beginning of considerable changes to our society and economy. After all, Congress declared war on the Empire of Japan less than an hour after Roosevelt’s speech.
The next four years brought untold pain and suffering.
But tragedies like these also tend to foster change and innovation.
After all, necessity is the mother of invention. And so the war effort set wheels turning that eventually brought us radar, jet engines, and MRIs.
Even nuclear power and better, cheaper cars can be traced back to the war.
Changes Are Coming
The COVID-19 pandemic is already leaving a significant mark on our future. Now, I don’t mean short-term changes.
COVID-19 put a dent in Walt Disney World profits, for example. But the resort will probably still be here in 2030.
Department stores might not be.
That’s the kind of trend I’m thinking of. Trends that determine what stocks we should buy today with an eye not on 2023 but 2030.
The most important trend like this that COVID-19 set in motion is our shift to “remote everything.” Here’s what I mean.
When COVID-19 came to our shores in the early spring of 2020, millions of businesses closed down their offices. Americans across the country were sent home, many to work remotely.
About 40 million Americans took part in this work-from-home experiment. And most of us liked it.
Freelancing platform Upwork now estimates that more than one in four Americans will work remotely through 2021.
And by 2025, it expects that to be permanent for more than 36 million Americans, or 22% of the workforce.
That’s going to have enormous consequences for the economy. For one, real estate will change forever. The value of office space in downtown areas will fall. On the other hand, less cramped, more comfortable housing will grow in value.
And being close to work will be less and less important to home buyers.
Last year’s crazy housing boom is just the first sign of what’s to come here.
The need for affordable housing will continue to accelerate. Congress is looking to provide more subsidies and more affordable options to revolutionize housing around the nation. This is positive for companies like Meritage Homes Corp. (MTH). The company maintains a strong balance sheet, has little debt, and sits in the Green Zone on TradeSmith Finance. As a result, the homebuilder continues to climb higher.
More Than Housing
But making work remote is only one of the changes COVID-19 has brought us. After all, millions of us were stuck at home last year, even outside of work hours.
We weren’t just working remotely. We were living remotely.
When it came to buying or selling our homes or cars, for example, old rituals were suddenly upended. Gone are the days of getting sellers, buyers, and agents together in one room to sign stacks of paper.
Because of COVID-19, that’s now all done remotely.
Depending on where you are and what you’re buying, you might be able to do it all online. Elsewhere, a mobile notary can come to you with all the paperwork.
According to airSlate, an e-signature company, the use of online signing services jumped 50% last year.
And 69% of Americans want to keep signing documents online rather than in person.
DocuSign (DOCU) is another company to watch. The Green Zone stock is in a sideways momentum trend. It’s on our radar for the long term. It’s another company that had a strong year and helped eliminate its debt and fortify its balance sheet.
As for picking out the homes or cars to buy, we’ve also turned to doing it online. And we’re showing no signs of stopping after COVID-19.
Online house-buying website Zillow (Z), for example, reported a 41% increase in web traffic last fall. Its competitors Redfin (RDFN) and Realtor.com are seeing similar trends. 63% of house buyers in November and December made offers on houses they hadn’t even seen in person, according to Redfin.
But we’re still in the early days of this trend.
A house listing online may be good if it has decent pictures, for example.
But it can’t compare to seeing it in person. We’re still in the stage of compromise here. New technology could change this.
Imagine this: You find a house you like online.
You take a look at the photos the agent has posted. Maybe you even use the wonky feature that splices together panoramic photos to make it look like you’re inside the home.
But that doesn’t give you a feel for the place.
So instead, you don your virtual reality (VR) goggles and explore a complete 3D model of the house. Maybe you even control a drone as it flies through the house in real time.
This may sound far-fetched, but some housebuilders are already experimenting with virtual reality. It helps them make sure they are building exactly what their clients want to buy.
Doing the same for existing houses is the natural next step.
I expect other aspects of working and living remotely to change in similar ways. Expect remote-work meetings, document signings, even virtual hangouts with friends to change. By a lot, and faster than you might expect.
This is why we’re watching the companies behind VR. Semiconductor stocks have been in focus due to the ongoing shortage of chips around the globe. However, we want to look to the long term as these chips grow stronger and more powerful and help revolutionize the post-COVID-19 world.
The stock I want to add to our Watch List is Intel Corp. (INTC). Yes, the stock is currently in the Yellow Zone and in a side-trend for momentum. However, after the company lost a major contract with Apple, it set its sights on reclaiming global market share. The company recently claimed that it would have the most powerful semiconductor chips on the market within the next three years.
And given that the stock has fallen a little out of favor, we will look to INTC as a potential buy when we see a return of buying momentum into the stock.
The post-COVID-19 economy is going to be very different from what it was before the pandemic. I know that there will be a lot of change, which can be a bit scary. But, if you’re an investor, embrace the change and the innovation. This is a chance to make real money from the biggest shift of the world’s top economy since World War II.
We’ll discuss more opportunities in the coming days.