Live Nation’s Stock Declares End To the COVID Pandemic
What All Time Highs in Live Nation’s Stock Tells Us
My friends and family think I’ve gone crazy. Why? Because I’m increasingly confident that the COVID crisis in the U.S. will be over by May, June at the latest. After a year of personally taking the virus very seriously, observing every pre-caution, wearing masks and socially distancing, I’m now shouting from the rooftops that not only is the end near, but it should end much, much sooner than many realize.
My friends and family look at me quizzically and say things like “I hope you are right.” Or they say, “what makes you so sure, are you a doctor? Are you an epidemiologist?”
No, I’m not a doctor or an epidemiologist and I have avoided writing or even tweeting about COVID since so much misinformation and politicization has surrounded the virus. I have also been critical of other money managers who have used the crisis to act like public health experts.
So, aren’t I doing the same thing now? I don’t think so and here is why.
I’m not proclaiming an end to COVID. Instead, I am saying Live Nation’s stock is. Live Nation promotes, operates and sells tickets for entertainment in the U.S. and abroad. The company is a merger of Live Nation and Ticketmaster.
Here is a chart of Live Nation (NYSE: LYV) as it has hit not only 52-week highs, but all-time highs.
Here are some more return to normal stock charts:
Do you see a trend?
And you really don’t even need to read any more of this column than the following statement. After 25 years of professionally managing money, I’ve learned that the stock market is one of the best predictors of economic activity in the next 6 to 12 months. The market may occasionally get blindsided by surprises like a global pandemic or a tsunami, but directionally it is usually spot on. And what I believe the market is telling us right now, is that concerts will be on fire NOT in 2022 or in some distant future, but this summer. The only way that is possible is if the COVID crisis is finished.
How could the market be this confident?
Think of the combined brainpower of people, artificial intelligence and combined effort in trying to outperform and make money in the markets. There is a whole cottage industry of “expert networks” in which funds pay boatloads of money to get insights, analysis and try to predict the future. If you don’t think the top funds have access to real time data, insight into vaccine supply and the private, honest insights from top doctors and epidemiologists, you are kidding yourself. People may lie to the polls, they may lie to the newspapers, but they rarely lie with their money. And that is why Live Nation’s stock price is so important.
I can already hear the retort, well what about GameStop (NYSE: GME)? GameStop was and remains a giant short squeeze. Several hedge funds realized another fund was in trouble and squeezed it and hid behind non-sophisticated “retail investors.” And with lots of money sloshing around the market, future GameStops can continue to happen.
What about bubbles? Well, directionally those bubbles are almost always right. The Dot Com boom was directionally right, the Internet did change the world. And the crazy EV bubble right now is probably correct that in the future, we will all be driving electric vehicles.
I’m not an investor in Live Nation and its valuation may be crazy, but directionally, I hear loud and clear what it is saying, and it is saying COVID is soon over. This actually makes me feel very good because my largest position is a franchise staffing company that is the perfect return to normal opportunity and trades at ten times normalized earnings.
There is always the chance something comes out of the blue, but for information that is well known, very few things beat the market.
The last year has been terrible in so many ways for so many people and like most everyone else, I cannot wait to be vaccinated and return to normal life. The stock market is discounting the future and it is telling us that this summer will be a magical return to concert, travel and in-person awesomeness. I for one, cannot wait.
For some further reading on why the market thinks this, see the below articles on the sheer amount of vaccine supply that is about to inundate the U.S.
https://apple.news/ArxmI-VzrSwSsF2Wd4vaI3w
One further related note is this from Booking.com: