What Type of Stocks are The Ultra Rich Buying in This Covid-19 Stock Market?
According to the finance professor at the IE Bussiness School in Spain, Manuel Romera, there is a difference of opinion among investors around the world.
Some think that the crisis provides an unequaled opportunity to enter the market. On the other hand, those who think that the collapse should be expected to be even greater and remain on the sidelines.
In his opinion, although some people think that this is the Apocalypse, there is a high probability of future profitability. His idea is that, through these moments of crisis, the wisdom is in knowing how viable the possibility is of a company to survive.
Current economic situation
It has been observed how the attention of the press at the international level has been focused on the economic disorder that the pandemic is causing. The same happens with the oil prices in frank fall.
Two events that would never have been expected to occur at the same time have created a moment never experienced. Meanwhile, you can see how senior corporate managers are buying and selling stocks on the stock market.
It can be seen how a marked decrease in consumption is producing a rapid deceleration in the economies of the world. And as a consequence, unthinkable numbers in unemployment, despite this, some have known how to obtain protection.
Take advantage of the crisis to have access to certain assets, as has happened in wars. Some have been able to transform the crisis into opportunities that they otherwise would not have been able to achieve.
Impact In The Global Economy
Some believe that these events of great impact in the global economy are like a black cloud that hangs over the financial markets. On all fronts of activity, there are considerable falls and great uncertainty.
Others believe that the central banks of the great powers are the only ones that can take effective measures to handle the situation. However, the measures that have been announced so far by the Federal Reserve have not been enough to stop the fall and build confidence.
There is a sustained drop in Wall Street, an oil price that cannot go lower and a predicted global recession. In addition to the circumstances of governments requiring people to stay home and closing their borders. Given this, the economic outlook is very bleak.
In recent weeks, equity indices worldwide have collapsed, mainly due to the coronavirus and its impact. The tourism and cruise industry is among those whose shares have plummeted the most. The titles of the energy sector have followed the same path. Some malls and airline operators have seen their value drop by more than 50%.
What some of the richest are investing in?
Some people who are among the richest in the world, while global markets have been plummeting, have increased their holdings in companies. As much as more than USD 1 billion has been invested in these participations.
One of these is billionaire investor Carl Icahn, who, according to Forbes, is one of the 30 wealthiest people on the planet. The information is that it has bought Occidental Petroleum shares because, due to the current crisis, companies like this one are extremely cheap. Additionally, it was also revealed that it had bought shares in Hewlett Packard (HP) and Hertz.
The great speculators of the economic markets have a very particular way of doing business. For them, the logic indicates that although, some companies in the oil business will go bankrupt, others will not.
This brings as a benefit that the investments that have been made at the time of the crisis will be revalued as the price of crude oil recovers.
Another investing in the oil market is Managing Director of the world’s largest fund manager Blackrod, Rick Rieder. In his view, the current situation is one in a million opportunity to acquire this asset class.
He declared having obtained actions in the technology, construction, and health sector. Also he mentioned that highly selective actions and mortgages are to his liking.
Another of the entrepreneurs who focus on having some advantage from this crisis is the founder of Equity Group Investment, Sam Zell. This businessman has no qualms about saying what he is investing in. He is acquiring shares in the land, debt, and energy sectors because, in his personal opinion, they are very cheap.
For the American magnate Warren Buffet, his focus is to buy quality stocks that currently have an attractive price.
He is preparing to rescue companies in the sectors such as accommodation, entertainment, and travel that have been affected by COVID-19 and have sparked their interest.
He decides on safe investments that have good long-term returns and may increase his stakes in airlines like American, United, or Southwest.
On the other hand, the Egyptian billionaire Naguib Sawiris decided on a traditional refuge during crises such as gold. He is buying mining shares thanks to talks with the Egyptian government.
The head of Starwood Property Trust Inc., considered the largest real estate investment trust, billionaire Barry Sternlicht. He has purchased $ 2 million in Starwood stock.
Similarly, former Goldman Sachs executive Raoul Pal has opted for investing in bitcoin. He believes that the current pandemic has served to generate a paradigm shift and a generational point of view.
Another important personality who has mentioned bitcoin as a safe asset is millionaire businessman Robert Kiyosaki. He is also the author of the book Rich Dad Poor Dad.
His personal opinion about bitcoin is that with it, you are not part of the system. This happens because there is an obvious separation between your money and the government.
In this feeling, he is accompanied by Anthony Pompliano, co-founder of Morgan Creek Digital. Who thinks that people will choose a currency that cannot be controlled by the government. This peculiarity makes bitcoin an asset that cannot be seized, censored, or manipulated.
Other large shareholders, board members, and company executives have opted to buy shares in their own companies. Everyone estimates that these will see a very important rebound. As Bill Ackman predicts, this rebound will be rapid as actions to slow the spread of the coronavirus become effective.
In conclusion, the richest men in the world have seen the collapse of many companies as a good opportunity. They have taken this opportunity to buy these shares at discount prices and thus increase their participation in companies from different sectors.
All affirm that when this situation passes, they will achieve a rebound and increase their wealth. This investment has reached the point of covering more than USD 1 billion in total.