04-17-2020, 12:07 PM
The 20% drop in the stock market averages is composed of stocks with highly variable results. The stocks of companies that may be driven to bankruptcy, such as airlines, highly leveraged real estate companies, weaker retailers, certain energy companies, etc., are down 70% or more.
On the other hand, some companies are setting or near all-time highs, such as Costco and Amazon. If a company can make it through the next year without filing bankruptcy or requiring a large bailout (public or private), there is not likely to be a 20% permanent impairment of their value. Some industries may have more intermediate-term impairment, such as restaurants, movie theaters, and others that depend on larger gatherings.
On the other hand, some companies are setting or near all-time highs, such as Costco and Amazon. If a company can make it through the next year without filing bankruptcy or requiring a large bailout (public or private), there is not likely to be a 20% permanent impairment of their value. Some industries may have more intermediate-term impairment, such as restaurants, movie theaters, and others that depend on larger gatherings.