COVID-19 Quarantine an Aggravation for Families, Game Manufacturers, a Payday for Investors

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Submitted by RJ Carter on Mon, 05/11/2020 - 13:23

"It's an ill wind that blows nobody any good," the expression goes, meaning that most bad situations are at least good for someone. Thus it is that with most events of impact, a canny person can predict where the money will flow and try to get ahead of it. The greatest example of this would be the baby boom; hindsight shows how this influx to the population caused economic grown in various markets as that demographic reached different stages -- baby supplies at first, fast food in their youth, durable goods in their adulthood, financial planning in their retirement years.

So it stands to reason that a national quarantine could also yield predictable patterns that could net profits for those taking care to look for them. One of these is the toy and gaming manufacturing sector. It stands to reason that when entire families are going to be forced into proximity, they are going to require things to keep them occupied together (or, conversely, drive them apart, as there's also been a spike in divorce rates as some couples realized they really didn't like spending so much time with each other).

Bloomberg reports that HASBRO (NASDAQ: HAS), the company behind such board games like Monopoly and Trivial Pursuit, and the popular trading card game Magic: The Gathering, has shown a 72% growth since the March 15 lockdowns began. Of course, simple analysis of Hasbro's one-year chart shows that this spike follows a precipitous decline that began February 20, and the company's current stock price of 68.84 (as of this writing) is still far short of the company's 52 week high of 126.87. Still, demand has nonetheless gone up post-quarantine; on my own trips to local stores, the board game shelves are nearly as bereft as those stocking toilet paper or disinfectant.

Video games are also, quite expectedly, seeing a surge in demand, with Nintendo gaining 44% over the same six week period, rebounding from a similar trough as has Hasbro.

Of course, hindsight is, as they say, 20/20. With both companies rebounding from a trench that just happened to coincide with the coronovirus quarantines, it's easy to say that a truly canny investor could have profited twice -- once on the short, seeing the crisis coming, and then again buying long at the onset of the quarantine.

(What games are you playing with your family during the quarantine? Let us know in the comments below.)