Ian Wyatt is the President of Wyatt Investment Research, a firm that helps individual investors achieve better financial results by providing independent investment research and trading education. He has been helping regular investors uncover hidden growth opportunities by beating the market and finding great investments at attractive prices. Ian has been actively investing in the stock market for the past 30 years and has spent more than 20 years publishing his investment ideas online to help fellow investors benefit from his successes and failures.
Ian Wyatt is also the host of the Daily Profit Podcast where he discusses the biggest growth trends with the biggest profit potential and his best investment ideas. He attended Skidmore College, the George Washington University, and Massachusetts Institute of Technology – Sloan School of Management. He lives in the Green Mountains of Vermont.
In this episode, John Corcoran interviews Ian Wyatt, an investment expert, about the effects of COVID-19 on different sectors of the US economy. They talk about changes in the real estate industry, travel and hospitality, e-commerce, entertainment, and co-working spaces.
Here’s a Glimpse of What You’ll Learn:
- What Ian Wyatt is currently focused on and what investors need to know as the US comes out of the COVID-19 crisis.
- What is causing an increase in the number of positive COVID-19 cases?
- Why is there a lot of optimism in the market from investors?
- What the last 3 months have been like for Ian Wyatt and what he has learned from changes that has happened in the market.
- Ian talks about the Federal Reserve’s response to bolster the US economy in light of the COVID-19 pandemic.
- The impact of the current health crisis on the real estate market.
- How the co-working industry is affected by changes in real estate.
- Ian shares why he thinks the travel and hospitality industry will take the biggest hit from the pandemic.
- Why Ian is optimistic about Live Nation Entertainment and the entertainment industry as a whole.
- The growth and boom that the e-commerce industry is experiencing as a result of the pandemic.
- Ian shares his concerns about the unemployment status in the U.S.
- Where to learn more about Ian Wyatt
- Wyatt Investment Research
- The Daily Profit
- Ian Wyatt on LinkedIn
- Ian Wyatt’s interview with Dr. Jeremy Weisz in March 2020
- S&P 500 Index
- The Federal Reserve
- Real Estate Investment Trusts (REITs)
- Vornado Realty Trust
- Line Nation Entertainment
Today’s episode is sponsored by Rise25 Media, where our mission is to connect you with your best referral partners, clients, and strategic partners. We do this through our done for you podcast solution and content marketing.
Along with my business partner Dr. Jeremy Weisz, we have over 18 years of experience with B2B podcasting, which is one of the best things you can do for your business and you personally.
If you do it right, a podcast is like a “Swiss Army Knife” – it is a tool that accomplishes many things at once. It can and will lead to great ROI, great clients, referrals, strategic partnerships, and more. It is networking and business development; and it is personal and professional development which doubles as content marketing.
A podcast is the highest and best use of your time and will save you time by connecting you to higher caliber people to uplevel your network.
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Welcome to the Revolution, the Smart Business Revolution podcast where we ask today’s most successful entrepreneurs to share the tools and strategies they use to build relationships and connections to grow their revenue. Now, your host for the revolution, John Corcoran.
Ian Wyatt 0:40
Welcome to the Daily Profit Show. I’m your host, Ian Wyatt. My goal is to help regular investors beat the market by finding explosive growth investment opportunities. I have John Corcoran, who’s done thousands of interviews with successful entrepreneurs, investors and CEOs and today he’s going to be interviewing me, asking me some tough questions about Coronavirus, the markets and where this world is headed. So John, great to have you here today.
John Corcoran 1:30
It’s a pleasure to have a chance to interview you and what inspired this was you’ve done a number of interviews with my business partner, Jeremy, and you did an interview I want to say was around March 16, or March 17 to 2020. We’re recording this now in mid June of 2020. And we’re kind of coming out on the tail end of the whole shelter in place of the coronavirus pandemic. And you were remarkably insightful. I went back and I listened to that a couple of weeks ago. And it was really unbelievable how you predicted many of the things that were going to happen. And you were really saying at that early stage, you’re saying, we got to take this seriously, this is going to be massive people are going to die. And I think at that point, I know me personally I hadn’t recognized how large it was going to be and I think a lot of people were the same way. So I wanted to take this chance to come back and have a further discussion about where we are right now and what sorts of impacts that you see are going to happen with the market and specifically in the month ahead. And of course, this episode is brought to you by daily profit, go to daily profit, comm sign up for Ian’s free e letter to get access to top investment ideas and favorite growth sectors. And of course, please leave a rave review in iTunes so that we can bring more people help more people to grow their wealth. So first in you know, let’s dive into we’re going to touch on a bunch of different topics. But we’re covering that we’re recording this in mid June of 2020. Why don’t you bring us up to speed on where you’re focused on with the market right now what you’re particularly looking at closely, and what investors should be thinking about as we start to come out of the shelter in place.
Ian Wyatt 2:52
Yeah, so thanks for that great introduction. And you know, I honestly wish that some of the predictions that I was making in mid March didn’t come to fruition because I think the world would be a much better place. If that hadn’t been the case. As I think about where the market is now, you know, we’ve certainly had what I would consider to be an extremely robust rebound from, from an investment standpoint in terms of the market, you know, the market fell 35-40% and has since regained almost all of those losses from the lows. And so, as of right now, you know, the s&p 500 as an index that tracks the 500 biggest companies in America. It’s up 40 over 40% from the lows and it’s only 9% below all time highs. So if we look at where the stock market is, it’s certainly a V shaped recovery. We’ve heard those terms you know, is it going to be a V shaped recovery a U shaped recovery A w shaped recovery. It’s certainly been a V shaped recovery from the stock markets perspective, time I think, will tell whether or not the economy also has a V shaped recovery. Or not. And, you know, right now we’re still, I believe in the early stages of that economic recovery, as you said, many states have started easing up on their shelter in place orders. New York as of this week is entering phase two of their reopening plan. And so there certainly is a lot of optimism around reopening and getting the economy back on track. And that’s why stocks in particular have rebounded so sharply. I think the question that investors have to ask today, though, is what is the future hold, we’re starting to see as shelter in place orders came to an end. And people started getting back to work and back to business and back to protesting or starting protesting for the first time that you know, the number of new cases is really starting to spike particularly in the southern states in the western states. And, you know, I think that where the market is in this environment is, you know, some days the markets up because people are feeling optimistic about reopening and other days we’re seeing the market falling dramatically because people are saying, Holy moly. Looks like we didn’t beat the Coronavirus. It’s still here and in some places, it’s worse than it ever has been before.
John Corcoran 5:12
Yeah, absolutely. It’s hard to tell right now, whether the numbers are up because testings increased or whether the numbers are up, because it’s actually spiking. It seems like it’s unclear sometimes.
Ian Wyatt 5:26
Well, you know, and I’ve looked into that, because I was interested in that too. And so we’re definitely seeing testing being more widespread. And you know, a couple of months ago, if you wanted a test, it was really hard to get one unless you’ve been to China or been with someone who is infected. Now anybody can get a test. Just about any day I had a relative who just relocated to Vermont just got a test on Friday. I have another friend who’s planning and going to North Carolina to visit elderly parents, went and got it, scheduled it on Friday, got a test this morning. So
Unknown Speaker 5:57
I did one.
John Corcoran 5:58
Yeah, about two or three weeks ago. Before visiting my parents, I went on the same day and got a test the same day.
Ian Wyatt 6:04
Yeah, and it’s relatively easy, right? And you know, so what I’ve also seen, though, is that the, the number of tests being run is up quite a bit, but the positivity rate is also up, which is the concerning fact, which means, you know, as you test more and more people who are less likely to be infected, right, start getting tested because of their doctor didn’t order it, they decided proactively to get it. What you should see is you should see the positivity rate falling, but instead, the positivity rate in the US has gone, I think from just over 4% to just over 5% within the last week or two. And so that’s concerning because it says not only are we running more tests, yes, we are, which is a good thing. We’re also finding more people who are testing positive rather than negative. So I think it you know, again, it doesn’t surprise me that this is sort of climbing the numbers is trailing about a month after states really started taking their foot off the brake in terms of the say at home orders, which is sort of the same thing that if you think about what happened here in the United States in early February, we had our first cases, right? It was early February, mid February saw a couple of cases in Seattle, a couple of cases in California. It wasn’t until a month later that we said, Oh, wait, there weren’t three cases in Seattle. There were hundreds, we just didn’t know about it. And so I think we’re seeing that the testing is lagging the activity. And the activity that was happening starting in mid May, when we all started getting out of our houses and interacting with each other and, you know, on a small scale, you know, that’s going to lead to the spread of the virus. And it’s just I think that the market is trying to interpret, you know, well, what’s what does it mean, you know, sort of more new cases versus the economy. And, you know, I think there may be a bit of an ebb and flow in terms of the economic rebound to moving forward. I want to ask you about this optimism across the market and for investors, you know, like the fact that there are still the numbers of people, in fact, it is increasing that there’s still a tremendous number of people that are unemployed. Do you think that there’s too much optimism in the market right now? Yeah, you know, I, I think that in the near term, next three months, six months, I think there’s too much optimism in the market. I think there’s a lot of uncertainty on the horizon. And investors hate uncertainty. And now the market is priced literally 9% below where it was in mid February, and given the uncertainty related to the virus itself, what this continuation of the outbreak looks like now, what a second wave might look like in the fall and winter, which some experts say it could be worse, along with the global economic fallout as well as the fact that we have 30 million people unemployed almost here in the US. seats, just leave, you know, just thinking through that, you know, how, you know, how long is it going to take for us to get back to normal? And you know, I think right now the stock market has essentially written off and investors really have written off 2020 as being a bus, they’re just saying, you know, it, forget about 2020 it’s, it’s gonna be horrible. We know, it’s horrible. We don’t expect anything good. And instead, they’re saying, well, that in 2021, it’ll start to get normal. And, you know, some predictions now suggest that the economy, the US economy won’t fully recover until the middle of 2022. So we’re about two years away from being back to where we were at the end of 2019. And, you know, like, the seat feels to me like there’s a lot of optimism built into it, you know, where you know, where socks are today. And not a lot of not a lot of weight is being put into some of the risks on the horizon. That being said, I would expect that the stock market is higher than it is now, a year from now, I wouldn’t be surprised if a year from now, we’re further into this thing that the stock market is at all time highs. But I also think that it’s possible that we’ll see a pullback from these levels, which would present a more even more attractive opportunity to enter the market or buy stocks a little bit less expensively than we see them at right now.
John Corcoran 10:26
I want to ask you, I’m really curious about this because you seem like such a positive guy. You’ve got this great demeanor to you, very articulate and talking about the market. You’ve been following the market for so long. What have the last three months been like for you personally, just following this has it been kind of like it? You know, if you took a step back, have you in a weird way appreciated it or the historic nature of it? Or, you know, watching it so closely. Were you scared at any point or were you confident that we’ve pulled out? Have it and so you realize in the short term, it’s going to be crazy, but we’re going to pull out of it. What is the experience in life?
Ian Wyatt 11:06
Yeah, it’s, I would say, it’s been a bit of a roller coaster. Following this, and obviously, like most people, I’ve been working from home since mid March, when we closed our offices at y at research. And, you know, in terms of the overall market and sort of my perception, you know, I honestly thought, and I’ve said on this podcast and elsewhere, I thought that the market was going to move lower than it did. I felt like given the extreme nature of the health crisis, combined with the economic impact, and you know, I said, You know, I think this is going to look like the Great Depression, part two, just on a shorter cycle, instead of being a decade long. It’s going to be like six months long, but we’re going to have double digit unemployment, double digit declines in GDP, which we’re seeing now. And I thought that given that scenario that the market should fall at least 50% from its highs, and it never got there. So I was wrong in that regard, I expected that we would see a steeper decline. And honestly, as a result of that mistake, I mistakenly didn’t buy as much as I wish I had when the market was so cheap. And, you know, I made a mistake that I think a lot of investors make too, which is, once I’d sort of committed to that view that the market was going lower. As stock started rising, I started feeling like the market was wrong. And, and this is a common mistake. You know, even those of us who invest in focus on the markets and have done this for decades. don’t always get it right. We don’t and, you know, I’m happy to admit that I’ve made my mistakes. I’ve made some great calls as well and warned my subscribers back in as late as February 20. We thought this was going to cause at least a 20% decline in the market and a recession. In the US, so, you know, on one hand, we get some things right, you would get other things wrong. You know, we also made a good call to get into a lot of biotech stocks back in late February as well, many of which have doubled in price. So, you know, that being said, you know, it certainly has been a bit of a roller coaster ride. And, you know, I think one of the things that I didn’t anticipate was just how much the Federal Reserve would respond to this crisis. And, and the way in which they’ve responded, really has put a backstop behind in one way investments as well as I think the economy as well. And I’m happy to explore that a little bit more if, if you’d like.
John Corcoran 13:43
Yeah, they’ve been very active. Talk a little bit about that. You know, how that has surprised you.
Ian Wyatt 13:48
Yeah. So you know, the Federal Reserve’s role is typically to manage inflation and sure, full employment for the US economy. More recently, and I think we saw this for the first time in 2008-2009 was the Federal Reserve has really expanded its mandate to support asset prices. And so you’ll see, we saw this with Chairman Powell back in late 2018, when stocks fell 20%. And all of a sudden, he responded to that by lowering interest rates, the economy was fine, but stock prices fell. And so the Federal Reserve said, Well, you know, we were right, raising interest rates, but now we’re going to lower them, because we don’t like where asset prices are going. And we’ve seen the same thing here, with the Federal Reserve really stepping up to buy assets in the market. The most surprising move that they’ve made is to get into the bond market and buy junk bonds, as well as investing in exchange traded funds of bonds. And so we’ve never really seen the Federal Reserve Act in that way before we’ve seen the federal come in and say okay, you know, Let’s say that General Motors is at risk of going bankrupt or one of the airlines is at risk of going bankrupt because of an economic crisis, we’ll come in, and we’ll bail them out, essentially, by their debt from those companies, but they’ve never done it in mass and said, you know, we don’t like the price of the exchange traded funds. So we’re gonna just go and start buying that asset in the market to support the price or, you know, they’ve typically been focused on what we call investment grade securities, which means companies that have a high credit rating and are unlikely to actually go bankrupt. Yet in this scenario, the Fed is saying, well, we’ll actually buy junk bonds if the company was rated at an investment grade security prior to COVID-19. So this was a really big change and you know, as a result of this, as well as quantitative easing the Federal Reserve’s balance sheet is at levels we’ve never seen before. And you know, that combined with the government debt, soaring to levels not seen since World War Two is quite startling. And so Again, when we talk about risks on the horizon, you know, you have to wonder, you know, will there ever be a day of reckoning in terms of us debt? And what does it look like for the US government ever to be able to pay back its debts?
John Corcoran 16:14
Right, right. Now, of course, a discussion of the Fed naturally always leads to a discussion around real estate because real estate is so affected by the feds moves. So looking at the real estate market, in some ways, it feels very early because again, recording this in June of 2020. Maybe it’s too early to even talk about this or, or to know the impact, but how, how are you seeing, are you monitoring the real estate market being impacted? both residential, but we can do it. We should also talk about real estate in terms of retail and office space and whatnot.