IBUY: Google Trends Data Shows The 'Buy-At-Home' Trade Is Dead

Harrison Schwartz profile picture
Harrison Schwartz


  • Price-to-sales valuations in online retail stocks illustrate the potential "buy-at-home" equity bubble is reaching its end.
  • Google Trends data shows that search volumes for most major online retailers have declined back toward pre-COVID-19 levels.
  • High unemployment has caused consumer spending and sentiment to plummet, which will negatively impact online retailers.
  • With equities showing signs of another crash, it may be a great time to short online retailers using the ETF IBUY.
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(Source: Pexels)

After weeks of stagnation and slowly increasing stock prices, equities have found themselves in another wave of volatility. The Nasdaq 100 ETF (QQQ) declined a staggering 5% on Thursday along with most major indices. The fund was previously up 40% this year, making 2020 both a near-record year for expected GDP losses and, paradoxically, a near-record year for Nasdaq 100 performance.

Certain sectors within the technology space have seen even better performance. Most notably, cloud/related companies, gaming companies, and online retail. While most of these firms have seen increased revenue due to COVID-19 impacts, their stock prices have risen at a much faster pace than their revenue. Even more, most will likely see a reversal next year and are not necessarily immune to the longer-lasting economics impacts of the current situation.

I recently explained the bear case for cloud stocks under the ETF Global X Cloud Computing ETF (CLOU) in "CLOU: Expect Rain With So Many New Cloud Companies" as well as gaming stocks under the ETF VanEck Vectors Video Gaming and eSports ETF (ESPO) in "ESPO: The Gaming Boom Is Near Its End". Now I'd like to cover online retail under the Amplify Online Retail ETF (NYSEARCA:IBUY). Quite frankly, IBUY may be the best risk-adjusted short opportunity available today.

The fund owns online retail companies which either directly sell online, like Wayfair (W) and Carvana (CVNA), or benefit indirectly from online sales, such as PayPal (PYPL). It also includes companies such as Overstock.com (OSTK), Peloton (PTON), and Etsy (ETSY). Like most people, I am a happy customer of many of these firms, but liking a company as a customer is rarely a strong long thesis.

Online Retail's Strong Performance Is Slowing

IBUY has had extremely strong performance this year, rising about 80% before crashing this week. This beat its benchmark

ChartData by YCharts

ChartData by YCharts

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This article was written by

Harrison Schwartz profile picture
Harrison is a financial analyst who has been writing on Seeking Alpha since 2018 and has closely followed the market for over a decade. He has professional experience in the private equity, real estate, and economic research industry. Harrison also has an academic background in financial econometrics, economic forecasting, and global monetary economics.

Disclosure: I/we have no positions in any stocks mentioned, but may initiate a short position in IBUY over the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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