Neither the author, Tim Fries, nor this website, The Tokenist, provide financial advice. Please consult our website policy prior to making financial decisions.
Chock-full of expenditures across multi-thousand tomes, the second stimulus bill is a challenge to sift through. The most important part though is that it delivered the direct checks, cut in half from the first stimulus round. Fortunately, it seems likely that the federal government will continue to compensate its citizens for caused damages.
Relief Stimulus Package Transformed Ends up as an Omnibus Bill
After many delays, the bipartisan emergency relief bill, dubbed as ‘Consolidated Appropriations Act, 2021’ was sent to President Trump yesterday. To the surprise of many, it contained several additions not related to COVID-19 disruption woes, ranging from foreign aid and horse-racing to climate change and military weaponry. However, a good portion of the 5593-page bill did provide much-needed relief to lockdown casualties:
$300 unemployment checks per week for 11 weeks.
$600 one-time direct checks per adult and child, which should be going out after December 28th.
$25 billion for rental aid, including an extension on eviction moratorium.
$319 billion is assigned for small businesses, of which $284 billion goes to loans issued via the Paycheck Protection Program (PPP). This package also includes $15 billion for various cultural institutions, live venues, and independent movie theaters.
The Senate Minority Leader, Chuck Schumer, already framed the bill as one of many to come:
“While this short-term deal is necessary to meet the urgent and growing needs that so many people are facing immediately going into the winter, this bill is not sufficient.”
President Trump has since kicked back the relief bill, saying it did not provide enough relief for Americans. At the time of publication, it is unknown how much each individual check will contain.
Still however, we can get a solid idea of some potential stocks to buy once the second wave of COVID relief arrives.
It will take many years for the job market and the economy recovers to pre-covid levels. In the meantime, people will flock to discount retailers. One of them is Ollie’, specializing in bargains across its 389 stores in 25 states. It managed to weather the covid storm with remarkable success.
Through Q1, Q2, and Q3 of 2020, Ollie’s increased its comps (comparable company analysis), or same-store sales, by 19% YoY, levelling above-average profits. On the back of the tumultuous but ultimately successful year, Ollie’s chain is set to open additional 50 – 55 stores in 2021, exploiting the real-estate void left behind by thousands of bankrupt retail stores.
No doubt, Ollie’s bargain gambit will largely depend on the pace of recovery. However, its profit margin is high enough to withstand possible comps stagnation. Accordingly, less than a week ago, the retailer announced a $100 million increase in the share buyback program, preparing to reward longer-term investors.
Criteo is a tricky investment. The company specializes in delivering targeted ads via third party cookies. However, it is becoming obvious that third-party cookies cause too many privacy concerns. Browsers like Mozilla Firefox are already capable of disabling them with minor setting tweaks.
With this trend continuing, one would think Criteo’s future is sealed. Fortunately, a non-proprietary tech called Unified ID 2.0 has already been released by another member of the ad-tech industry, The Trade Desk. Criteo is fully on board this new standard for enabling targeted ads without cookies.
Therefore, the future of Criteo largely depends on the new standard achieving critical mass adoption. Thankfully, the barrier to entry into Criteo’s stocks is low due to its current cheap valuation. This leaves you with a high ceiling for success and a cushy floor to fall onto.
This online marketplace connecting sellers to buyers across 234 nations has turned the pandemic into an advantage. Supplying the vast demand for unique masks alone, increased its popularity. Consequently, just during the first half of 2020, Etsy’s sales rose by 71% YoY, with active buyers growing by 55% YoY.
More importantly, Etsy shows a high retention rate of repeat buyers, in addition to gaining first-time customers. Last year, Etsy acquired a music-oriented marketplace called Reverb for $275 million. Although the bulk of its revenue, at over $330 million, comes from transaction and listing fees, Etsy draws the income from two other sources – Pattern website host and promoted listings.
Through Q1, Q2, and Q3 of 2020, Etsy’s revenue grew by 102% YoY. By combining the power of its 2.5-million seller army with the flexibility of e-commerce, Etsy is expected to grow by at least a further 22% in 2021.
Of the four investment options: Bitcoin, stocks, yield farming, and options trading, which one do you find most engaging and rewarding? Let us know in the comments below.
Disclosure:Tim Fries has no positions in any of the stocks mentioned, and has no plans to initiate any positions within the 72 hours following the publishing of this article. This article expresses the opinions of Tim Fries. Tokenist Media LLC has no position in any of the stocks mentioned, and does not plan to initiate any positions within 72 hours of the publishing of this article. Please consult our website policy for more information.
Tim Fries is the cofounder of The Tokenist. He has a B. Sc. in Mechanical Engineering from the University of Michigan, and an MBA from the University of Chicago Booth School of Business. Tim served as a Senior Associate on the investment team at RW Baird's US Private Equity division, and is also the co-founder of Protective Technologies Capital, an investment firms specializing in sensing, protection and control solutions.