BUYING LOW – REALLY LOW

​Last week I took an essential business trip to Colorado, which resulted in my booking a room at a well-known national hotel chain. As I approached the hotel I saw there were no cars in the parking lot. The place, which had only opened in the past six months, was a complete ghost town. My first inclination was to assume the booking website had made an error in allowing the reservation, but I saw an operating TV in the lobby area so I walked up to the door. The automatic door opened, revealing the completely empty lobby. I rang the bell, wandered around, even called the front desk and watched as the phone rang continuously with no one arriving to answer it. I concluded that the place was in fact vacant.
 
Not willing to give up I opened my phone app for this chain and proceeded to check in online, even receiving a digital key for my assigned room. Now it was really starting to feel eerie. But with key in hand I grabbed my day pack and went to find my room. Suddenly, an out-of-breath young women came out of the stairway, apologized for her long delay, and asked if she could help me. She said she had been upstairs cleaning a room and that she was in fact the only employee, and only other person, on the premises.
 
When I returned for sleep later that night there was just one other car in the parking lot. It was a strange feeling staying in this 250 room hotel. The next morning I looked out my window at another empty hotel across the street. It was a local family brand, also clearly struggling and with an uncertain future.
 
When I told my story to a friend he commented that he was glad he didn’t own stock in that hotel chain. As I pondered his comment the following thoughts came to mind. 1 – The current crisis has devastated the travel and leisure industry. 2 – The crisis will end. 3 – The best capitalized companies are most likely to survive at the expense of weaker competitors. 4 – If I can find those survivors this could be a great investing opportunity.
 
Investors want to buy low and sell high, right? What could possibly be lower than a completely empty hotel? So long as it is ultimately able to stay in business, I estimated this was actually a great time to take a serious look at its stock. Using this same investing theory there are many other areas of the economy to consider as well. Many businesses from energy to manufacturing and even healthcare, are operating at or near the bottom of their capabilities, and yet they provide products and services that the world needs. Look around those industries and find the players you believe have the staying power to be the survivor when this is over and you may find that today offers some of the best investing opportunities you have ever seen.