Lockdown Week 3: Board Games And Investing In Bear Markets

Are you starting to get a case of “cabin fever” under the coronavirus lockdown?  Maybe you’re not under a lockdown order yet.  Some places around the world are just now starting to go into lockdown mode, but here in the Pacific Northwest we’ve already been at it for 3 weeks…

So, the cabin fever has really started to set in!

Just kidding.  It’s quite the opposite in fact.  One of the great advantages of being an introvert at a time like this, is that I don’t really miss seeing other people, going outside, or attending social events.  It was never my thing anyway.

Staying at home for an extended period of time is basically not a big deal for me.  I imagine all the extroverts of the world are now writhing in agony at the possibility of being stuck at home for a few months with no-one to socialize with.  Sorry extroverts!

The only difference for the Tako family, is now I have both kids at home with me 24/7.  Kids need constant attention.  They need to be educated, entertained, and the inevitable fights between the boys have to be broken up.

So far, our daily education schedule that I posted about last week has been going pretty well.  I’m still trying my best to keep the kids learning while our local school system figures out how they want to do “E-Learning”.  This takes up the bulk of my day.

When we’re not hitting the books, the kids and I spend a lot of time together playing board games.  While some families turn on Netflix or a Disney film to entertain the young ones, I prefer to play board games with the kids.  Especially if it’s raining, or the weather is unpleasant (like it was this week).

We probably have 50+ board games in the house, but to be honest I’ve never counted them!  It’s a lot!  Which ones do we play?  Othello is a perennial favorite board game our boys like to play together.

Hiss, Go Nuts For Donuts, and Qwirkle are other favorites that have on the kitchen table a lot recently.  I like Qwirkle a lot.  It’s easy enough for the kids, but has enough depth to keep adults like myself occupied.

Chess made frequent appearances on our kitchen table this week too, but Tako Jr. #2 (our youngest) doesn’t yet know how all the pieces move.  He’s keenly interested in learning how to play the game, and watches closely while we play.

For now, chess games are limited to Tako Jr. #1 and myself.

Apocalypse Dinner Menu

What does your apocalypse dinner menu look like?  Based on the empty shelves I see at the grocery store, other families must be eating canned beans, pasta, rice, and frozen pizza.  I’m still trying to keep the quality bar high — doing my best to keep us eating healthy fresh-made food instead of microwaving some junk out of a box.

Every time I’ve visited the grocery store in recent weeks, fresh vegetables have been in abundant supply.  Meanwhile pasta, beans, rice, and other canned goods are completely sold-out.  Go figure.  I just shake my head and wonder.

As long as the stores are still stocking fresh food, we’re going to be eating that first.  We’ll crack open the survival rations later.

For example, today I made the boys Ham, Pepperoni and Cucumber sandwiches for lunch, with an extra side of cucumbers.  They gobbled these sandwiches up in about two seconds and were asking for more.  I’ll be saving the instant ramen for another day.

Dinner tonight was a popular Japanese dish called Katsu-curry.  It’s a kind of not-so-spicy Japanese curry with a crispy fried chicken cutlet.  It’s very popular right now in Japan.

Although I must admit our chest freezer is starting to look a little emptier these days.  We’ve been shopping less often… not because I’m afraid of catching the virus or anything…  (I’ve probably already had it.  Back in February.)

Mostly because I don’t want to stand in the lines!  Stores in our area are now limiting the number of shoppers inside the store at any one time. For smaller stores this is a limit of 50 people, for larger stores it’s 100.  During normal shopping hours this means there’s usually a decent-sized line of people waiting out-front.

No thanks!  I hate long lines.

Interestingly enough — Did you know hardware stores are considered an essential service?

Yep!  Even though our county is under a mandatory stay-at-home order, Home Depot is freaking open!  That’s right, hardware stores are considered essential!  I’m all-set for the apocalypse if Home Depot is open!  I can build castles to the sky while the world burns down around me!

This might have something to do with why I purchased some Home Depot stock recently…

Dipping My Toes Into The Market

Although this pandemic is far from over, it’s true — I’ve started to dip my toes into the market again.  This week, I invested about $135k into a few stocks.  While the S&P 500 still seems a touch expensive to be dropping my entire cash wad into the market, I have started to see a few good values lying around in plain sight.

Even considering the inevitable capital destruction due to terrible earnings in Q1 and Q2, I’m seeing a number of decent businesses selling at very good prices.  Discover Financial Services (Symbol: DFS) was once such company, hit particularly badly during the market drop.  Shares were actually trading at less than tangible book value.  I haven’t seen prices like that since 2009.

Call me crazy, but with checks coming from the U.S. Treasury in just a few weeks (as well as extended unemployment benefits), I think Discover might have a chance of surviving the economic tsunami that’s coming.

I also picked up some shares of my perennial favorite the “Well Known Energy Company” and LyondellBasell (Symbol: LYB).  Shares of both these companies were trading at discounted prices.  Even factoring in a big slowdown, I think these assets are still bound to do alright.  Sure, Mr. Market!  I’ll buy some at that price!

As you can see, I’m clearly not afraid of wading in and buying shares when the market disagrees with me.

There’s also some really excellent companies that are bound to outperform in this environment, selling for fair prices.  Home Depot (Symbol: HD) is one such example.  The stores are packed with people who are now stuck at home, and inevitably find themselves working on their homes because there’s nothing left to do once they’ve streamed the best movies off of Netflix.

From what I can tell, Home Depot is going to sail through this recession with nary a scratch on it.  So, I added a few shares to our portfolio.

Amgen (Symbol: AMGN) is another example of a company with a history of outperforming during downturns.  People aren’t going to stop buying cancer drugs or blood pressure medication just because of COVID-19.  Pharmacies are still considered essential after-all.  Yet the shares were surprisingly affordable on early Monday morning.  We added a few shares of this one as well.

Now obviously I could be completely wrong about any of these investments.  Maybe I’ll lose money.  The future is going to be very uncertain over the next few months, and as I wrote about in my Lockdown Week1 post, the world is almost certain to change in ways I can’t predict because of this pandemic.

As such, uncertainty and fear seem to be the market driver of the day, not earnings.  Valuations have become utter nonsense because earnings are expected to be nonexistent.  It’s anyone’s guess who will go bankrupt in the next year.

Maybe it won’t turn out to be as bad as the media is predicting, but with weekly jobless claims hitting a new record, it’s going to be plenty bad.

That’s it for this week!  I hope everyone out there is staying healthy and safe!  From my family to yours, take care of yourselves!

[Image Credit: Flickr]