Financial world with John

Hello readers! I am glad to welcome you to my column. If you are at all interested in markets, stocks, investments and finance at all, probably this is the place for you! Every month we will go through news from world of markets and I will explain to you what has happened! At the end of each column I will share with you my own portfolio!

There are three branches which are the most discussed during this world pandemic: politics, economics and health. I would like to show you an economic perspective of this pandemic and especially opportunities that have arisen and advice for some future opportunities.

Where’s the top?

You’ve probably already noticed the existence of the crypto currency called Bitcoin. During the pandemic the price of this currency has gradually risen, in March 2020 the value of 1 bitcoin was roughly 9000$, little by little the value rose so by December 2020 it reached 20 000$ for 1 bitcoin.

The new year was not only marked by celebrations, fireworks and champagne, but also by a huge rise in the price of Bitcoin. It achieved a price of 40 000$ for 1 Bitcoin and in February 2020 it rose even to 56 000$ for 1 Bitcoin! Now the price is slowly decreasing and nobody knows what’s next.

So basically, this currency rose from 7000$ to 56000$ in just one year. It became the best investment of 2020 and people started to be interested in Bitcoin, also due to home office, and quarantine, but clearly, we still don’t know - where’s the top. So what? Would you try it?

Economic bubble or the stock of the year?

GameStop is a failing company that sells video games and electronics, but has managed to be one of the hottest topics in the media in recent days. Since the beginning of this year, the company's shares have risen by an unbelievable 1700%. Let’s go through this mysterious story.

Behind the whole event is a group of small investors from Reddit. In this app there is a group called r/WallStreetBets with more than 7 million members (before this event the group had only 2 million members)

This group of amateur investors made a decision to invest in GameStop shares, using tactics called SELLING LONG, which simply means, that investors bet on the rise in the price of a share. However, when stocks start to grow rapidly, due to the influence of the Reddit group, investors had to sell their shares to reduce their losses. Due to large number of shares purchased the price rises faster and faster. 

So what is the point? People from this Reddit group declared that they simply did it as a campaign against huge, rich market players from Wall Street. For others the purpose was obviously a large extra income.

This company was at a loss and even for professional investors is difficult to say If people will change their point of view (they will buy more in GameStop) or it will be in loss also after this trend will end up. I would recommend GameStop shares to people who want to speculate and play a little with shares, but definitely not to people who are looking a long-term investment.

Invest in classics!

During a pandemic, it has been proved that companies which sells basic necessities, including food, drink and more, are very stable and worth investing in both during a pandemic and under normal circumstances. Such companies include, for example, European Nestlé, Danone, and Unilever and American PepsiCo, Tyson Food, and JBS.

However, these companies do not include world-famous breweries such as Heineken, BudLight or Carlsberg, mainly due to the closure of pubs and restaurants during the pandemic. Companies were thus limited to selling beer in bottles or cans, which did not cover their losses by far.

Also we cannot forget to supermarkets which are super-great investments during a pandemic, mainly because of restaurants are being closed, people were forced to cook for themselves. I would recommend shares of famous supermarkets such as Lidl and Kaufland (Schwarz Gruppe), Albert, Spar, Aldi or Carrefour

Written by John

My own portfolio during the pandemic!

Each month I would like to share with you my own portfolio for inspiration. The graph below details share titles which I personally invest in. I have four main boards during pandemics - technology, food companies, banks and medical/health companies.

SOURCES

vaj, Bitcoin je jako ptakopysk, řekl investor. Složil tím kryptoměně poklonu, E15, 31.3. 2021,  

https://www.e15.cz/bitcoin-wiki?fbclid=IwAR1EP3QPTP7mKObCwRr-N6e5TtrmXepb7QRNuigYKMuCbRWjCJerI_6my2Y,

Graphs: Yahoo Finance, https://finance.yahoo.com/quote/BTC-USD/?guccounter=1&guce_referrer=aHR0cHM6Ly93d3cuZ29vZ2xlLmNvbS8&guce_referrer_sig=AQAAALfu7b1jbxEb7uyzl97KP4rYXdB5BhSr_En7L1zLe3FX0a2o1buWvJpRLs6o84ICYaUSPQgd7bMecJhUNrt-AjnUZxIx14outGCkmV7_7Z1TC_KO-qdpgtW2mxVdaf_dkXZcjnJ3aKvg4mc2TWPO8-VKM259ah11EUf3PYA9KQbo

Jonáš Mlýnek, Akcie GameStop (GME) díky Reddit WallStreetBets vzrostly až o 978 %!, Lynx Broker, 28.1.2021, https://www.lynxbroker.cz/vzdelavani/reddit-wallstreetbets/

IMAGES

Logo: Local Bitcoin Now

https://localbitcoinnow.com/how-did-the-bitcoin-logo-originate/

Game Stop Obchod: The Verge https://www.theverge.com/2021/1/22/22244900/game-stop-stock-halted-trading-volatility

Game Stop Logo: Brand https://brandslogos.com/g/gamestop-logo-vector/Logos

Picture: Brand Logos