When the Travel Sector Is Set to Take Off
Many politicians, government officials, and members of the media are misleading you about the COVID-19 vaccines.
They’re not stretching the truth about the effectiveness of the vaccines, however. Just the opposite, in fact.
They’re downplaying the effectiveness of the vaccines — and emphasizing what they might not do.
While virtually every vaccine out there prevents the spread of disease in addition to immunizing its taker, the message out there on the COVID vaccine seems to be: “We don’t know yet.”
Or they’re highlighting the fact that folks who’ve been immunized still need to stay socially distanced and masked up long after receiving their doses … even with other folks who are immunized.
Here’s Dr. Leana Wen, a CNN medical analyst:
It’s possible that someone could get the vaccine but could still be an asymptomatic carrier … They may not show symptoms, but they have the virus in their nasal passageway so that if they’re speaking, breathing, sneezing, and so on, they can still transmit it to others.
Of course, it’s natural for politicians and health officials to focus on the worst-case scenarios. After all, if things go wrong, they’re the first people we blame.
Meanwhile, the nation’s media is struggling to combat its negative bias. There’s an old saying: “If it bleeds, it leads.” The simple fact is that negative news is more likely to draw your attention.
So news outlets are telling you about every time a pharmacy or hospital destroys doses because they’re spoiled.
Or they’re reporting on various “anti-vaxxer” groups.
You’re certainly hearing about how this or that city’s or state’s vaccination plans are a “failure” or a “joke.”
It feels as if some people never want the pandemic to end.
That’s discouraging and could lead some people to avoid a vaccine. “If it’s not going to help and I still have to wear a mask until next Christmas, why bother?” you might be asking yourself.
But I’m optimistic — about the vaccines and about what they mean for investors’ portfolios.
So today, I’ll tell you why I’m optimistic.
And I’ll tell you about the one sector — and trade — that I believe will benefit most once others start getting optimistic about the vaccines, too.
Getting Back to Normal
Here’s the thing.
The vaccines work. They will save many, many lives. We might be taking off our masks a lot sooner than D.C. bureaucrats and TV talking heads would have you believe.
They’re about 95% effective … which no one was expecting.
“These are game-changers,” Dr. Gregory Poland, a vaccine researcher at the Mayo Clinic, recently told The New York Times. “We were all expecting 50% to 70%.”
The flu shots we take every year, on the other hand, are only about 65% effective. Do you hear a lot of pessimism around the flu shots every winter?
The new administration is already setting ambitious goals. Health officials want to vaccinate 100 million Americans before the new administration’s first 100 days are through.
Even if they fall somewhat short, the trend is clear. Vaccines will lead us back to something that feels like “normal.”
While I don’t have a specific prediction about exactly when “normal” will reappear, I can highlight one powerful investment trend for 2021 that “normal” will supercharge when it does.
Travel Bounces Back
The travel and hospitality industry is a sector that should thrive in 2021. In fact, I named “Travel Bounces Back” as one of my four 2021 “Power Trends” in the brand-new issue of Fry’s Investment Report.
The travel industry thrives when folks are traveling. But not so much when folks are not traveling … like when they’re locked down in their living rooms flipping through travel magazines.
Because of the COVID-19 pandemic, the daily tally of passengers flying on domestic and international scheduled U.S. airline flights plummeted from 2.6 million at the start of 2020 to just 100,000 in April.
From an investment standpoint, those numbers show why the airline sector has been one to avoid, and why it may now be one to embrace. At least, that’s my call.
Even though the COVID crisis continues, airline travel has been reviving. And I expect airline travel to build on its recent recovery throughout 2021.
Not surprisingly, airline stocks plummeted as well. But a recovery is underway, despite the continuing COVID crisis.
Now that Pfizer Inc. (NYSE:PFE), Moderna Inc. (NASDAQ:MRNA), AstraZeneca Plc (OTCMTKS:AZNCF), and other pharmaceutical companies are rolling out vaccines, we can begin to imagine an end to the pandemic … and to imagine that wayfaring folks will embark on the journeys they have been deferring for nearly a year.
That’s why, in a recent issue of Fry’s Investment Report, I recommended a purchase of a specific travel sector trade.
Once travel activity recovers to pre-COVID levels, I expect this play to recover its pre-COVID share-price level — that would be a better than 45% gain from today’s price — and then continue trending higher as pent-up demand for travel translates into robust airline traffic.
In order to get that recommendation — and more about those four 2021 “Power Trends” — learn how to join the Investment Report here.
On the date of publication, Eric Fry did not have (either directly or indirectly) any positions in the securities mentioned in this article.
Eric Fry is an award-winning stock picker with numerous “10-bagger” calls — in good markets AND bad. How? By finding potent global megatrends … before they take off. And when it comes to bear markets, you’ll want to have his “blueprint” in hand before stocks go south.