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Secondary Effects:
A few weeks ago we discussed the restructuring of the American workweek—one of the positive outcomes of the pandemic for many working families. This week we are going to briefly discuss one of the negative secondary effects that appears to be affecting more and more people every day—including Olympic star Simone Biles.
On Tuesday, Simone Biles pulled out of the women’s team gymnastics final at the Tokyo Olympics. It was a move that surprised everyone and brought a ton of criticism from armchair quarterbacks. Biles is widely regarded as the greatest gymnast of all time and was expected to lead her team to the gold before bowing out. Her reasoning for withdrawing was simple:
“I have to focus on my mental health and not jeopardize my health and well-being.”
During a time that has been so traumatic for many, mental health has been forcefully brought to the forefront. It didn’t take long to realize that locking down cities, businesses, and places of recreation would wreak havoc on our collective mental health. However, this time of self-isolation was also a period that inspired many of us to reevaluate our lives and what was important to us.
Even as a self-proclaimed introvert who enjoys some alone time and solitude, I’ve started to feel more isolated than usual—craving interaction from outside my familial circle. I’m not alone in this feeling. Part of the reason for these feelings—in my opinion—stems from how long this pandemic has dragged out.
Recall last March when the pandemic had officially begun and the White House and CDC were putting out statements about 15 days to slow the spread for coronavirus.
508 days later…we’re still in the midst of the pandemic (5th wave now) with no apparent end in sight. The longer it lasts, the more our mental health will continue to suffer.
At some point, many of us just hit the mental breakpoint. We’re sick of having the same conversations over Zoom. We’re tired of the flip-flopping from our so-called experts and hypocritical government officials. We’re exhausted.
So what can you do if you think the pandemic has affected your mental well-being?
First off, you can take a mental health day in place of the traditional sick day. If your employer asks for specifics just tell them you’re on the edge of burnout and need some personal time. Or just tell them to kick rocks.
If you do take a mental health day, just make sure you are trying to actually get to the root cause of your anxiety, depression, or other ill feelings. Don’t get sucked into social media or doing anything work-related as it truly is a time to recalibrate and reset your mind.
Many employers have seen the mental health impacts caused by the pandemic and have call centers and other professional help available. I’d encourage you to use those resources, especially if they are free of charge.
I’ve had one-on-one sessions with a therapist and they are fantastic. I know there is a stigma around men seeking out help but it’s worth it. Getting your thoughts out into the open is healthy. Especially when you share them with a professional who casts no judgments and can even guide you on a better path after diagnosis.
A few additional ways that I cope with feelings of anxiety or depression are to take a walk with my dog and meditate. Getting outside and being surrounded by nature (without technology) also has many great benefits, hence why I love to garden. Sometimes I’ll call up old friends that I haven’t talked to in months/years just to check in on them.
The bottom line: The pandemic has been a drag on our collective mental health. It’s time that we start making mental health a priority in our lives because it affects all of our relationships (coworkers, friends, family). There are resources out there if you are struggling with anxiety or depression. I can even send you some memes that will brighten up your day.
We will get through this pandemic eventually, even if it takes another 500 days.
Performance Update:
Now let’s see how the People’s Portfolio did this week…
We gave back some recent gains this week after some of our recent high fliers (SQ and SHOP) cooled off a bit.
We’re now a little over halfway through second-quarter earnings. The results continue to beat forecasts by a wide margin. Here are the results from FactSet:
Earnings Scorecard: For Q2 2021 (with 59% of S&P 500 companies reporting actual results), 88% of S&P 500 companies have reported a positive EPS surprise and 88% of S&P 500 companies have reported a positive revenue surprise.
Earnings Growth: For Q2 2021, the blended earnings growth rate for the S&P 500 is 85.1%. If 85.1% is the actual growth rate for the quarter, it will mark the highest year-over-year earnings growth rate reported by the index since Q4 2009 (109.1%).
Earnings Revisions: On June 30, the estimated earnings growth rate for Q2 2021 was 63.1%. Ten sectors have higher earnings growth rates today (compared to June 30) due to upward revisions to EPS estimates and positive EPS surprises.
Earnings Guidance: For Q3 2021, 19 S&P 500 companies have issued negative EPS guidance and 29 S&P 500 companies have issued positive EPS guidance.
Valuation: The forward 12-month P/E ratio for the S&P 500 is 21.2. This P/E ratio is above the 5-year average (18.1) and above the 10-year average (16.2).
Big tech names seemed to be priced to perfection as many of them reported blowout earnings but still sold off. Amazon took the brunt of it, losing 9% on the week.
As reported on by CNBC: Amazon said second-quarter revenue grew by 27% year over year to more than $113 billion, the third $100 billion quarter in a row but actually a slower pace of growth from the blistering 41% advance in the year-ago period. The e-commerce and cloud giant reported Q2 earnings per-share of $15.12, which exceeded expectations. Looking ahead, Amazon warned about lower sales numbers and a lower growth rate for the third quarter.
We used this dip on Friday to limp into Amazon (AMZN) at the close. We sold off our Disney (DIS) for a +2.10% gain to fund the purchase.
Shopify (SHOP) is on the chopping block next week for the 1st time. We’re currently holding onto a 20.69% gain over the past 9 weeks. Shopify reported earnings this week, beating top and bottom, which spurred a slew of analyst upgrades. They continue to fire on all cylinders. While they’re currently down nearly 9% from last week’s all-time high, they are still up more than 46% YTD.
Our portfolio is currently -4.16% on the year. Pathetic.
Keep an eye out for the new Twitter poll every Friday. Follow along in real-time with nearly 300,000 others on Public.
Portfolio News Highlights:
The biggest stories affecting our portfolio this week:
Shopify Stock Is a Buy as Online Shopping Will Continue to Grow (Barron’s)
Square (SQ) Earnings Expected to Grow: Should You Buy? (Zacks)
Walmart partners with Adobe to offer other businesses its technology (MarketWatch)
WM Announces Second Quarter Earnings (Yahoo)
Exxon, Chevron Beat Q2 Forecasts But Contrast On Paying Shareholders More (IBD)
Penn National Gaming (PENN) Reports Next Week: Wall Street Expects Earnings Growth (Zacks)
What Else We’re Reading:
Blogs/Articles:
U.S. Population Growth, an Economic Driver, Grinds to a Halt - Janet Adamy and Anthony DeBarros (WSJ)
The Pandemic Hurt These Students the Most - Sarah Mervosh (NY Times)
The Time Tax - Annie Lowrey (The Atlantic)
‘Do Something’: Nikola Chief Urged Executives to Boost Stock - Tina Davis (Bloomberg)
“Failures of Kindness” - George Saunders (James Clear)
Books:
The Cult of We: WeWork, Adam Neumann, and the Great Startup Delusion - Eliot Brown and Maureen Farrell
Need new reading material? Visit my Amazon page for my most purchased book recommendations.