The Bull Market Rotates Away From Tech-Driven Mega-Companies
Cheap, small, and economically sensitive stocks—the B Team, if you will—are benefiting from the hope that the lockdown is almost over.
Photo: Alamy Stock
The Covid-19 pandemic has done tremendous damage to the U.S. economy—especially the parts that can thrive only when people are willing to leave their homes and spend some money. But the way Michael Baron sees things, “it can’t flatten Vail Mountain.” The famous ski destination “is still there, and people are itching to go away,” says the co-manager of the Baron Partners Fund, which owns shares of Vail Resorts. “There’s a lot of pent-up demand for leisure travel.”
This type of thinking has been dominating Wall Street in recent weeks. The economy isn’t really back, but the market is ready to assume it will be. And promising vaccine developments have investors betting on the companies they think will benefit the most from a return to normal. Vail Resorts—a longtime holding of the Baron fund—rose almost 19% in November, compared with about 11% for the S&P 500. Before November, Vail had been lagging the S&P in 2020.