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Time To Retire The 2020 Pandemic Playbook For Stocks


  • The market environment has entered a new phase compared to the early part of the pandemic.
  • While Omicron and surging Covid cases make headlines, cracks are appearing in the macro outlook with slowing growth.
  • The tech sector is particularly exposed to a weaker outlook against lofty expectations.
  • There's more volatility in stocks with risks tilted to the downside.
  • Looking for more investing ideas like this one? Get them exclusively at Conviction Dossier. Learn More »
Tornado of money over cityscape

Colin Anderson Productions pty ltd/DigitalVision via Getty Images

In a volatile week, the S&P 500 (SPY) closed down about 4% from its recent high. While barely even a correction, the extreme volatility in small-caps and segments of tech have likely raised eyebrows. We won't blame investors itching to buy-the-dip considering the

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This article was written by

Dan Victor, CFA profile picture

Dan Victor, CFA is a market professional with more than 15 years of investment management experience across major financial institutions in research, strategy, and trading roles.

Dan leads the investing group Conviction Dossier, where his focus is on helping investors stay ahead of market trends and inflection points. Dan’s investing vehicles of choice are growth stocks, tactical exchange-traded funds, and option spreads. He shares model portfolios and research to help investors make better decisions, via his Investing Group’s active chat room.

Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within 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.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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Comments (5)

Dan Victor, CFA profile picture
just published and update. take a look.. leave a comment in there for good luck seekingalpha.com/...
thumb.ai profile picture
I'm not worried about vaccine effectiveness, because the unvaccinated get almost all the severe impacts of Covid. I think severe Covid cases drive measurable economic impacts, not mild cases.

Severe impact > Covid fear > behavior change > economic impact

Severe impacts show up as hospitalizations and deaths. Death stats are front page. Hospitalizations lead deaths, but the trend reporting is quite intermittent in my experience.

Hospitalizations for Covid in the U.S. are rising again:

Positive cases are a leading indicator, but do mild cases cause behavior shifting in the U.S.? I doubt it. Stories from China have included shutting down a port because someone tested positive. We don't do that here.
Dan Victor, CFA profile picture
@thumbsoup thanks for the comment..

the headline I've seen is that unvaccinated are getting hospitalized at a 2-to-1 pace.. but turning that around means ~35% are breakthrough cases. sort of makes it looks worse when phrased like that in terms of efficacy.. explains the rush for boosters.

what's concerning is the trend in places like New York where i wouldn't put it past their ability to take more drastic measures..


So my point in the article is that "tech" was able to look beyond all these trends in 2020 and it end up being bullish.. but now the theme has been played out.. downside to 2022 estimates as COVID impacts continue when it was assumed it would be over. that's why I believe this time is different.
thumb.ai profile picture
@BOOX Research Thanks for responding. I agree the "stay at home" Tech may flatline for awhile. I do wonder how much this is because those choosing to vaccinate are unlikely to be hospitalized or killed by Covid and know it. Therefore behavior is slowly returning to normal and not reverting as much as it used to in the face of Decepticon or whatever variant. A split in the population. Then again maybe not a split in behavior, because most of the unvaccinated were and are choosing to not stay at home either. A split in beliefs but not economic behavior?

That is the U.S. Behavior in other countries may be different, and I'd wager their vaccination % is a driver.

The unvaccinated are hospitalized at more like 10 to 1, not just 2-1.

Study of 13 states during April 4–July 17 2021:
"total of 569,142 (92%) COVID-19 cases,
34,972 (92%) hospitalizations,
6,132 (91%) COVID-19–associated deaths
were reported among persons not fully vaccinated"


October in Minnesota:
"Unvaccinated Minnesotans are 15 times more likely to require hospitalization for COVID-19 and 30 times more likely to die from the disease than vaccinated residents"

December report on Michigan:
"MHA has found that three out of four COVID patients are unvaccinated (76%), 87% of COVID ICU patients are unvaccinated and 88% of COVID ventilator patients are unvaccinated."


December report on Washington:

Unvaccinated 12-34 year-olds: 17 times more likely to be hospitalized

Unvaccinated 35-64 year-olds: 18 times

Unvaccinated 65+ year-olds: 10 times

Dan Victor, CFA profile picture
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