Black Humor: Investing In A Time Of Plague

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Image by Lorenzo Cafaro from Pixabay

My broker called this morning.

“Due to coronavirus you should consider some changes in your portfolio.”

“What do you suggest?” I asked.

“Our new model portfolio is 45% gold mining stocks, 45% canned food, and 10% timeshare interests in fallout shelters.”

“What are timeshare interests in fallout shelters?” I asked.

“You purchase the right to rent out the shelter for a month a year. It’s a real estate play for the coronavirus age. Location, location, location is critical. And if things get worse you can stay in the shelters yourself.  There are separate gun lockers for each owner.””

“How would I know which fallout shelter interest to purchase?” I asked.

“That’s where we come in. We have modeled the spread of the coronavirus and are packaging shelter interests for availabilities when the virus and shelter demand both peak.”

“What about management fees?” I asked.

“There are minor fees involved, but you should double your money in four months.”

“Tell me more about canned food,” I said “What sectors do you recommend?

“We like many of the private labels.”

“You don’t like the established national brands?

“Economic catastrophes dilute brand loyalty.  We researched 14th century Europe during the Black Death, Russia during the Mongol invasions, and Ireland during the famine.  In all these periods, established brands were devastated.“

“In hard times should I choose value over brand?” I asked.

“Definitely.  We think a number of the private-label canned foods are undervalued and will produce solid returns for the patient investor. In the northeast, canned fruit will be the only source of vitamin C.   We see a great upside as people from Maine to central Connecticut, suffering from scurvy, bid up the price of canned fruit.”

“Do you have specific recommendations?” I asked.

“One of our favorites is Kroeger’s Peach Halves in Heavy Syrup.   We have a price target of $248 a case for the 15.5 once cans on this.”

“How about canned soups?” I asked.

“Canned soups are risky.  The lack of potable water will put downward pressure on the condensed soups.  We recommend an arbitrage play—short the condensed soups and long the prepared.   Go long on Progresso Homestyle Chicken with Vegetables and short Campbell’s Condensed Chicken and Stars.

“How about dog food as a canned foods investment?” I asked

“We love it. Basic demand is unaffected since dogs don’t get coronavirus. Moreover, dog food offers more nutrition per dollar than any other canned food.  We think it only matter of time before humans develop a taste for it.  Dog food should comprise 5% of your canned-food investments.”

“Any final advice?” I asked.

“Don’t panic.  Stay the course.  Maintain our recommended asset allocation. 45% gold mining stocks, 10% timeshare interests in fallout shelters, and 45% canned food.

“Should I keep precisely to those percentages?” I asked.

“No, we foresee market volatility creating a lot of tactical trading opportunities. Whenever we need to generate more commissions, we will give you a call.”

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