The Stay-At-Home Apocalypse

It was a wild day on the markets on Monday thanks to the revelation from Pfizer that their experimental COVID-19 vaccine was more than 90% effective in phase three tests. Though this doesn’t mean we’re out of the woods just yet, it does indicate that a vaccine might come available sooner rather than later, with Pfizer Chairman and CEO Dr. Albert Bourla calling it “a great day for science and humanity.”

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Not all smiles

However, it wasn’t all smiles for some, with shares in teleconferencing leader, Zoom, absolutely cratering off the back of Pfizer’s announcement.

Of course, we could have easily picked some of our other ‘stay-at-home’ stocks that got hit hard either, like Peloton (-20.3%), 2U Inc (-20.5%), or Etsy (-17.1%). Conversely, some of the companies that have been most affected by the pandemic had their best day in a long time, including Eventbrite (+32.2%), Wynn Resorts (+27.7%), and Nordstrom (+25.9%).

Basically, the market decided yesterday that the pandemic was over and everyone could leave their homes immediately. So should our investing plans change now that we might have COVID-19 on the back foot?

Not so fast

To wheel out an overused phrase once more, “These are unprecedented times we are living in.” The global landscape has shifted enormously in the last twelve months and, even if a fully-effective vaccine were to be rolled out to every person in the world tomorrow, the world won’t just simply go back to the way things were.

Take e-commerce penetration, for example, which is expected to grow by more than 30% this year alone — accelerating the shift to online two years faster than expected. Do you think you’ll use Amazon less once local stores reopen?

Or what about the fact that most major tech firms have already told their employees that they will not be expected to return to the office until summer 2021. It’s hard to see management reneging on that decision, whatever may happen over the next few months. Indeed, many companies like Dropbox, Microsoft, Twitter, and Square have all decided that employees need never return to the office if they wish.

Or take Peloton’s most recent earnings call, where management said that they simply weren’t able to keep up with the demand for their products. Do you think all of those customers will let their bikes become $2,500 clothes racks and go back to sweaty, overcrowded gyms?

In the madness of yesterday’s market, MyWallSt head analyst Rory Carron tweeted: “Today of all days, don’t make major decisions on headlines.” Certainly, Pfizer’s announcement is fantastic news that gives us all some much-needed light at the end of the tunnel, but don’t expect things to go back to the way they are.

If you’ve been looking at those pandemic-fuelled stocks like Shopify, Zoom, and Peloton wistfully over the past few months thinking of what could have been, now might be your chance to put your money where your mouth is.

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