Pessimism is pretty much my brand, but the special Mar. 20 episode of The Daily podcast reminds me that we have ample cause for optimism and hope.
As more people have isolated themselves over the past few weeks, they have used the internet to connect and, as weird as this sounds, to be kind to each other. To uplift each other.
To remind each other that, although they are individually isolated and separated from society, they are not alone — because, in this mad season, we’re all alone.
Amazingly, the coronavirus has caused more people to use the internet for good.
Zoom Video Is the Future
I work from home on a regular basis, so it’s normal for me to spend a chunk of each business day on video conferences via Zoom. For the past 2-3 years, I’ve taken it for granted.
But a lot of people — especially those who normally work in offices — have just been introduced to Zoom over the past month and are now using it to work from home while in isolation.
While much of the economy has ground to a halt because of the coronavirus, Zoom’s business has markedly picked up, a reality reflected in the stock market.
On Feb. 19, the S&P 500 closed at 3,386.15, its highest closing mark in history. On Mar. 20 (the most recent session as of writing), the S&P 500 closed at 2,304.92, down an astounding -31.9% in just a little over a month.
Over that same time, Zoom Video (ZM) has moved from $103.93 per share to $133.55, a gain of 28.5%.
The investing enthusiasm for Zoom Video is so great that since Feb. 19 even the fortunately named ZOOM Technologies (ZOOM) has jumped from $3.05 to $20.90, good for an unbelievable gain of 585.2%, presumably because unknowledgeable investors have bought shares of ZOOM thinking it is the company behind the video conferencing app — which it certainly is not.
All of this brings a few points to mind.
- As the example of ZOOM suggests, the market is by no means efficient.
- The market as a whole has reacted particularly strongly and perhaps inefficiently to the coronavirus crisis, creating a notable buying opportunity.
- Whenever I decide to get back in the market, I will probably invest in ZM, even though its share price has risen.
I think video conferencing and remote working are the way of the future.
The Case for Zoom Video
Zoom has the power to connect people professionally and personally. As we have seen in these tough times, it can be a force for good.
And I expect that in the post-coronavirus world, more employers will be willing — and even desirous — to have employees work from home when possible.
The biggest long-term benefit of COVID-19 will be companies realizing their overall productivity increases with more remote work
— Jonathan Bales (@BalesFootball) March 18, 2020
I’m not a financial advisor, and I don’t suggest that you make any decisions based on anything I say or write … but I think Zoom Video has outsized potential for the future, and I will strongly consider establishing a position in it whenever I get back in equities, especially if I see a drop in its share price.