Home / Business / Stock market crashes are inevitable: 3 stocks that no one will stop buying when it happens.

Stock market crashes are inevitable: 3 stocks that no one will stop buying when it happens.



for investors There may not be three more frightening words than “Stock Market Crashed” with Coronavirus Crashing – Lose 34% in Benchmark S&P 500 (SNPINDEX: ^ GSPC) In 33 calendar days — still bright in most people’s minds. The last thing they might want to think about is a new round of panic sales.

Unfortunately, the stock market inevitably crashed again.

A $20 paper plane crashed and crumpled in a financial newspaper.

Image source: Getty Images.

Like it or not, mistakes are coming.

Although we cannot predict exactly when a mistake will occur. how long will this happen Or how steep will the final drop be? History clearly shows that the Great Slump in the stock market was part of the investment cycle. and admission to one of the world’s greatest wealth builders.

For example, stock valuations have been ringing alarm bells for quite some time. At the closing bell on May 24, Shiller’s price-to-earnings ratio, an inflation-adjusted earnings-checked P/E from 10 years ago, closed at 37.22. That’s more than double the Shiller P/E ratio, by Average since 1870, the bigger concern is in the previous four cases that the S&P 500’s Shiller P/E ratio crossed above 30 and held that level. The widely followed index was subsequently reduced by at least 20 % of its value.

Furthermore, history tells us that the rebound from a bear market has never been this smooth. In the past 61 years there have been nine bear markets, including the coronavirus. In the previous eight bear markets There have been one or two instances of a double-digit percentage drop in the S&P 500 within three years of hitting a bear market bottom. without exception Double-digit declines are common as the market appears to have regained its footing after a bear market.

The key factor is that there are 38 instances where the S&P 500 has dropped at least 10% since 1950 (every 1.87 years).

In the short term, it is inevitable that the stock market will crash again.

Crashes and fixes are a great opportunity to buy good stocks at a discount.

On the other hand, history also shows us that every mistake in history is an important buying opportunity. If you buy a good company at a discount and let your investment thesis go on and on. You have the opportunity to build wealth.

When the stock market crashes next time Instead, invest your money into these three unstoppable stocks.

A person who inserts their cash card into a Square point-of-sale card reader.

Image Source: Square

Square

fintech stocks Square (NYSE:SQ) It aims to reshape the financial services space. with two extra-high-growth segments to propel the sails Therefore, you can buy hand-to-hand with confidence during the stock market downturn.

Most people are probably familiar with Square’s merchant ecosystem if you’ve ever shopped from a retailer. You may have used point-of-sale devices from Square, in addition to point-of-sale devices, but also analytics and credit to help businesses succeed in the seven years leading up to the pandemic. The total payment volume (GPV) processed on the company’s vendor ecosystem grew by an average of 49% annually, reaching $106 billion in 2019.

The best thing about the merchant ecosystem is that it is primarily driven by merchant fees. In other words, the larger the merchant, the more likely it will be to generate a square of gross profit. Over the past two years, GPV from businesses generating at least $125,000 in GPV annually increased 9% to 61%.

But the bigger long-term temptation for investors is Cash App, a peer-to-peer digital payment platform. In three years, Cash App’s monthly active users have more than five times to 36 million. There are more cash cards. (The Cash card acts like a debit card pulled from a user’s Cash app balance.) And gross margin per user is $41. In some contexts, Square spends less than $5 to acquire new users. This is the crazy gross margin that should allow Cash App to become the company’s gross profit driver.

A surgeon holds a one dollar bill with surgical forceps.

Image source: Getty Images.

Intuitive surgery

If Wall Street is going to make a dictionary, I’ll sing it. Intuitive surgeryof (NASDAQ:ISRG) The company logo that goes next to the definition of “unstoppable”, this robot-assisted surgical system provider has a clear competitive advantage. and operating models prepared for expanding gross margins Mistakes are the perfect time to get discounted stocks.

Intuitive surgery has made a name for itself with the Da Vinci Surgical System. A surgeon trained to use da Vinci can make incisions more precisely than laparoscopic surgery. This usually causes fewer complications and the patient has a faster recovery time. But what’s remarkable is that Intuitive has deployed over 6,100 systems around the world in two decades. That’s more than any competitor combined.

The company has also seen its sales channels change for the better since the early 2000s. Most of its revenue came from selling expensive Da Vinci systems. The unfortunate part is that these systems are complex builds. which only leads to moderate margins. over time The higher-margin revenue channel is determined by the large number of sales. This includes the sale of tools and accessories at each stage as well as system services. As a result, Intuitive Surgical’s revenue growth should outpace its sales growth over time.

People typing laptops in a coffee shop

Image source: Getty Images.

Facebook

Keep in mind that brand-name stocks can also make a stoic investor a fortune. Why is the stock market the perfect time to take stock of the unstoppable social media giant? Facebook (NASDAQ:FB).

When the curtain closed in the first quarter of 2021, Facebook had 2.85 billion monthly active users visiting the website of the same name, and 600 million unique users heading to WhatsApp or Instagram per month. That’s 3.45. A billion unique people (about 44% of the world’s population) visit Facebook-owned content every month. Advertisers know they can’t go anywhere else and get a broad or targeted audience for their products or services. This is why the advertising pricing power is truly unmatched.

The incredible thing is that Facebook is still in the early stages of growth. That might be difficult to understand for a company that earned nearly $86 billion last year. but it’s true Although the website of the same name and Instagram are monetized for ad revenue, neither WhatsApp nor Facebook Messenger, the world’s two most visited social platforms, are not generating meaningful revenue. When Facebook opens the floodgates for these assets Sales and operating cash flows will increase rapidly.

And that’s not all, Facebook has plenty of additional revenue opportunities. “Other”, which includes the company’s Oculus Virtual Reality (VR) devices, saw revenue increase 146% in the first quarter to $732 million. Whether it’s a VR device, a financial service, streaming or something else, Facebook has ample opportunity to expand its revenue stream beyond advertising

This article expresses the opinions of the authors who may disagree with the recommended position. The “official” part of the Motley Fool’s Premium Consulting Service, we are motley! Questioning an investment thesis—even one of our own—helps us all think critically about investing and making decisions that help us to be smarter, happier, and richer.




Source link