The travel and entertainment industries have had a volatile ride over the last year.
During the initial stages of the pandemic, when panic and uncertainty ran rife, BEACH stocks–booking, entertainment, airlines, cruises, and hotels—were left scrambling. Collectively, $332 billion in market cap washed away.
Now, it appears the tide might be turning for these companies, buoyed by vaccine breakthroughs and glimmers of hope for a return to normalcy.
This infographic looks at the growth in market cap value across BEACH stocks one year from when the WHO officially declared COVID-19 a pandemic.
Washing Back to Shore?
BEACH stocks have gained a collective $376 billion in market cap in the year since the pandemic was declared, with about half the companies trading at their respective all-time highs.
In fact, about 70% of BEACH stocks have actually outperformed the S&P 500, which returned 43.7% during the same period.
|Company||Ticker||Category||Market Cap: 03/11/20 ($B)||Market Cap: 03/11/21 ($B)||Change|
|Alaska Air Group||ALK||Airlines||5.7||8.1||42%|
|Delta Air Lines||DAL||Airlines||29.1||30.9||6%|
|Caesars Entertainment||CZR||Casino & Hotel||2.2||20.8||824%|
|Norwegian Cruise Lines||NCLH||Cruise & Casino||4.3||10.9||151%|
|Royal Caribbean Cruises||RCL||Cruise & Casino||10.8||22.4||108%|
|Carnival||CCL||Cruise & Casino||16.4||31.8||93%|
|Penn National Gaming||PENN||Entertainment & Live Events||2.6||20.4||661%|
|Six Flags||SIX||Entertainment & Live Events||1.7||4.1||142%|
|Live Nation||LYV||Entertainment & Live Events||10.8||19.3||79%|
|The Walt Disney Co||DIS||Entertainment & Live Events||201.2||357.1||77%|
|Cedar Fair||FUN||Entertainment & Live Events||1.8||2.8||57%|
|Choice Hotels International||CHH||Hotels||4.5||5.9||30%|
|Marriott Vacations Worldwide||VAC||Hotels & Resorts||3.8||7.7||103%|
|Vail Resorts||MTN||Hotels & Resorts||7.1||13.4||88%|
|Park Hotels & Resorts||PK||Hotels & Resorts||3.4||5.3||58%|
|Wyndham Hotels & Resorts||WH||Hotels & Resorts||4.2||6.4||51%|
|MGM Resorts International||MGM||Resorts & Casino||10.2||19.3||89%|
|Wynn Resorts||WYNN||Resorts & Casino||9.7||15.9||64%|
|Las Vegas Sands||LVS||Resorts & Casino||40.7||48.2||18%|
BEACH Stocks Leaders and Laggards
When dissecting this basket of stocks by industry, it’s clear that much of the recovery story is lopsided. One reason for this, despite the pandemic, is that there are more granular, idiosyncratic trends occurring within these sectors.
Let’s look at what’s propelling the leaders, and dragging down the laggards:
Leading: Online Betting
There’s reason to be bullish on gambling stocks. Since late 2018, some 20 states have legalized sports betting, with more expecting to follow. Relative to other areas, the pandemic has been kind to gambling stocks. Many of those with an online presence have witnessed a spike in traffic, as more people continue to flock towards online betting.
Within the BEACH stocks basket, Penn National Gaming and Caesars Entertainment are clear outliers, having grown an epic 661% and 823% respectively. In addition, the broader industry (measured by the BETZ ETF) has nearly doubled the performance of the S&P 500 since its inception.
The return to normalcy will be much more delayed for airlines. Global RPKs, an industry metric, are not expected to reach pre-pandemic levels until 2024.
Actions of insiders also seem to match this negative sentiment. Warren Buffett, once a staunch supporter of airlines, decided to call it quits during the pandemic—dumping his entire position.
U.S. airline executives have collectively been selling their stakes much more aggressively than in the last few years. To add insult to injury, there’s significant shorting of airline stocks as well. At a short interest of 11.6%, American Airlines is most heavily shorted BEACH stock.
In a year where social interactions and gatherings have largely disappeared, so too has much of the business activity for hotels. For instance, Hilton sales suffered a 58% decline year-over-year.
But even without the pandemic, the hotel industry had their work cut out for them, through a growing and formidable competitor in Airbnb. Airbnb can scale its network beyond what any hotel can. This is evident in its room count, which is greater than the largest hotels combined.
More Bumps On The Road Ahead?
The investing landscape today looks to be disconnected from reality, in part because of the forward-looking nature of markets. Even though things are dire today, there’s a belief that light exists at the end of the tunnel.
But the path to recovery isn’t quite so linear. When the dust settles, it’ll become more apparent which industries will “return to normal” and which have set out permanently on a new trajectory.
Visualizing the Recent Explosion in Lumber Prices
Lumber is an important commodity used in construction, and refers to wood that has been processed into beams or planks.
Fluctuations in its price, which is typically quoted in USD/1,000 board feet (bd ft), can significantly affect the housing industry and in turn, influence the broader U.S. economy.
To understand the impact that lumber prices can have, we’ve visualized the number of homes that can be built with $50,000 worth of lumber, one year apart.
A Story of Supply and Demand
Before discussing the infographic above, it’s important to understand the market’s current environment.
In just one year, the price of lumber has increased 377%—reaching a record high of $1,635 per 1,000 bd ft. For context, lumber has historically fluctuated between $200 to $400.
To understand what’s driving lumber prices to new heights, let’s look at two economic elements: supply and demand.
U.S. lumber supplies came under pressure in April 2017, when the Trump administration raised tariffs on Canadian lumber. Since then, lumber imports have fallen and prices have experienced significant volatility.
After a brief stint above $600 in April 2018, lumber quickly tumbled down to sub $250 levels, causing a number of sawmills to shut down. The resulting decreases in production capacity (supply) were estimated to be around 3 billion board feet.
Once COVID-19 emerged, labor shortages cut production even further, making the lumber market incredibly sensitive to demand shocks. The U.S. government has since reduced its tariffs on Canadian lumber, but these measures appear to be an example of too little, too late.
Against expectations, COVID-19 has led to a significant boom in housing markets, greatly increasing the need for lumber.
Lockdowns in early 2020 delayed many home purchases until later in the year, while increased savings rates during the pandemic meant Americans had more cash on hand. The demand for homes was further amplified by record-low mortgage rates across the country.
Existing homeowners needed lumber too, as many Americans suddenly found themselves requiring upgrades and renovations to accommodate their new stay-at-home lifestyles.
How Many Homes Can You Build With $50K of Lumber?
To see how burgeoning lumber prices are impacting the U.S. housing market, we’ve calculated the number of single family homes that could be built with $50,000 worth of lumber. First, we established the following parameters:
- Lumber requirements: 6.3 board feet (bd ft) per square foot (sq ft)
- Median single family house size: 2,301 sq ft
- Total lumber required per single family house: 14,496 bd ft
Based on these parameters, here’s how many single family homes can be built with $50,000 worth of lumber:
|Date*||Lumber Price||Total Lumber Purchased||Total Homes Built|
|2021-05-05||$1,635 per 1,000 bd ft||30,581 bd ft||2.11|
|2020-05-04||$343 per 1,000 bd ft||145,773 bd ft||10.05|
|2015-05-01||$234 per 1,000 bd ft||213,675 bd ft||14.74|
|2010-05-01||$270 per 1,000 bd ft||185,185 bd ft||12.77|
*Exact matching dates were not available for past years.
As lumber prices continue to set record highs, the National Association of Home Builders (NAHB) has reported that the cost to build a single family home has increased by $36,000. Most of this cost can be passed down to the consumer, but extremely tight supplies mean homebuilders are unable to start more projects.
The Clock is Ticking
Despite their best efforts to increase output, it’s likely that sawmills across the U.S. will continue playing catch-up in 2021.
“There was a great fear among sawmills to prepare for a downturn. When home buying surged, they could not open up capacity quickly enough.”
– Lawrence Yun, National Association of Realtors
Analysts are now warning that lumber prices could reach a flashpoint, where affordability becomes so limited that demand suddenly falls off. This has led the NAHB to ask the Biden administration for a temporary pause on Canadian lumber tariffs, which currently sit at 9%.
U.S. tariffs on Canadian lumber were first introduced in 1982, and represent one of the longest lasting trade wars between the two nations. The U.S. is currently appealing a World Trade Organization (WTO) ruling that states its 2017 tariff hike was a breach of global trading rules.
Timeline: Key Events in U.S. History that Defined Generations
Looking back at history is a necessity when trying to understand what the future may hold.
Using insights from our Generational Power Index 2021 report, along with survey data from Pew Research in 2016, we identified some key milestones for each cohort, to understand how these events helped shape each generation’s unique perspectives.
Quick Context on Generational Definitions
Before diving in, it’s important to clarify which generations we’ve included in our research, along with their age and birth year ranges.
|Generation||Age range (years)||Birth year range|
|The Silent Generation||76 and over||1928-1945|
|Gen Alpha||8 and below||2013-present|
These generational categories aren’t universal, but we went with the most widely cited definitions from reputable U.S. sources including the Pew Research and the U.S. Federal Reserve. It’s also worth noting that these generational definitions are somewhat specific to North America. For this reason, the focus is on U.S. historic events.
Defining Events: Silent Generation
The oldest members of the Silent Generation were 11 years old at the start of World War II, and were teenagers by the time it ended. In other words, their formative years fell smack dab in the middle of one of the biggest international conflicts in modern history.
Because of this, it makes sense that World War II ranks as the second most impactful event in their lifetimes, trailing only the far more recent Sept. 11 terrorist attacks (2001).
Most Impactful Historic Events, Silent Gen (Survey Results)
|Rank||Silent Gen||Survey %|
|#7||The tech revolution||27%|
|#8||Civil rights movement||18%|
In fact, the Silent Generation cited four different wars on their list, more than any other cohort. For context, Boomers identified three conflicts (including the Cold War), while Millennials only referenced one (Iraq/Afghanistan).
Of course, other not-so-violent events made the list as well. And interestingly, some of these impressionable moments occurred later on in life.
For example, the youngest members of The Silent Generation were already in their mid-t0-late forties when cellphones became common in the ‘90s—yet, 27% identified the tech revolution as one of the top 10 most impactful events that happened in their lifetime.
Clearly, life never stops throwing you curve balls—no matter how far along you might be.
Most Notable Historical Events: Baby Boomers
Many of the historical experiences cited by Baby Boomers were related to war and violent acts. For instance, Boomers identified two assassinations on their list—John F. Kennedy’s in 1963, and Martin Luther King’s in 1968.
Most Impactful Historic Events, Boomers (Survey Results)
|Rank||Baby Boomers||Survey %|
|#6||The tech revolution||26%|
|#7||Civil rights movement||18%|
|#8||Fall of Berlin Wall/end of Cold War||16%|
For this generation, the moon landing in 1969 made the cut, as did Barack Obama’s election win in 2008.
Baby Boomers only identified one event that was unique to their cohort (Martin Luther King’s death). It’s worth noting that responses varied between Americans of different racial backgrounds. Not surprisingly, Black Americans were far more likely to name MLK’s death as a top defining moment.
Most Notable Historical Events: Gen X
For Gen Xers, two unique events made their list: the Challenger disaster (1986) and the Gulf War (1991). Interestingly, neither of of these events stood out for other generations.
The Challenger disaster impact was widely felt because it involved civilians alongside astronauts, making the space shuttle’s explosion all the more notorious.
Most Impactful Historic Events, Gen Xers (Survey Results)
|Rank||Gen X||Survey %|
|#3||Fall of Berlin Wall/end of Cold War||21%|
|#4||The tech revolution||20%|
|#12||Oklahoma City bombing||9%|
Hurricane Katrina (which occurred in 2005) is the only natural disaster to make it on any of these lists. The hurricane—which caused a significant share of New Orleans’ population to resettle—left a lasting impression on the nation.
Most Notable Historical Events: Millennials
Millennials remember the September 11 attacks the most of all generations, with 86% citing it as their most influential event. They also paid close attention to the aftermath of this occurrence, as marked by the inclusion of both the Iraq/Afghanistan wars and the death of Osama Bin Laden among their most notable events.
Most Impactful Historic Events, Millennials (Survey Results)
|#5||The tech revolution||18%|
|#11||Boston Marathon bombing||7%|
Sadly, a lot of Millennials recollect instances of gun violence more than any other generation, from Orlando and Columbine to Sandy Hook.
Last but not least, Millennials are the only generation to note the Global Financial Crisis of 2008, and the subsequent Great Recession, as a momentous event. This makes sense considering many of them began their careers in its aftermath.
Gen Z and Younger
The Pew Research survey data was collected in 2016, so opinions on more recent events have not been collected.
That said, it could be premature to say in the short term which events will leave a lasting impression on generations, young and old.
According to the above data, the election of Barack Obama was a lasting milestone in recent history. Will the election of Donald Trump leave a similar impact? How will COVID-19 be regarded in the future? Time will tell which events will define future generations.
Moments, Movements, and Everything in Between
One key takeaway worth emphasizing is just how varied these formative events can be. Some were experienced as a single moment, while others were a culmination of shifts over several years.
It’s also clear that timing and duration are not the only determining factors behind an event’s influence on American society. For example, the moon landing was a tangible moment with a date stamp, whereas the tech revolution has a much fuzzier start (before exploding in significance alongside the Dotcom boom and bust).
Also interesting is what is absent from the top results. For example, the Global Financial Crisis of 2008 is barely referenced.
In short, a variety of impactful events and more gradual revolutions have made their mark on American society. Some have influenced specific generations, while others have transcended generational boundaries and unified the American public.
Download the Generational Power Report (.pdf)
For a full methodology of how we built the Generational Power Index, see pages 28-30 in the report PDF. This is the first year of the report, and any feedback is welcomed.
7 Ways Artificial Intelligence is Improving Healthcare
Emerging technologies have the potential to completely reshape the healthcare industry and the way people manage their health. In fact, tech innovation in healthcare and the use of artificial intelligence (AI) could provide more convenient, personalized care for patients.
It could also create substantially more value for the industry as a whole—up to $410 billion per year by 2025.
This graphic by RYAH MedTech explores the ways that technology, and more specifically AI, is transforming healthcare.
How is Technology Disrupting the Patient Experience?
Tech innovation is emerging across a wide range of medical applications.
Because of this, AI has the potential to impact every step of a patient’s journey—from early detection, to rehabilitation, and even follow-up appointments.
Here’s a look at each step in the patient journey, and how AI is expected to transform it:
Wearables and apps track vast amounts of personal data, so in the future, AI could use that information to make health recommendations for patients. For example, AI could track the glucose levels of patients with diabetes to provide personalized, real-time health advice.
2. Early Detection
Devices like smartwatches, biosensors, and fitness trackers can monitor things like heart rate and respiratory patterns. Because of this, health apps could notify users of any abnormalities before conditions become critical.
Wearables could also have a huge impact on fall prevention among seniors. AI-enabled accelerometer bracelets and smart belts could detect early warning signs, such as low grip strength, hydration levels, and muscle mass.
3. Doctors Visits
A variety of smart devices have the potential to provide support for healthcare workers. For instance, voice technology could help transcribe clinical data, which would mean less administrative work for healthcare workers, giving them more time to focus on patient care.
Virtual assistants are expected to take off in the next decade. In fact, the healthcare virtual assistant market is projected to reach USD $2.8 billion by 2027, at a CAGR of 27%.
4. Test Results
Traditionally, test results are analyzed manually, but AI has the potential to automate this process through pattern recognition. This would have a significant impact on infection testing.
5. Surgery / Hospital Visits
Research indicates that the use of robotics in surgery can save lives. In fact, one study found that robot assisted kidney surgeries saw a 52% increase in success rate.
Robotics can also support healthcare workers with repetitive tasks, such as restocking supplies, disinfecting patient rooms, and transporting medical equipment, which gives healthcare workers more time with their patients.
Personalized apps have significant care management potential. On the patient level, AI-enabled apps could be specifically tailored to individuals to track progress or adjust treatment plans based on real-time patient feedback.
On an industry level, data generated from users may have the potential to reduce costs on research and development, and improve the accuracy of clinical trials.
7. Follow-ups and Remote Monitoring
Virtual nurse apps can help patients stay accountable by consistently monitoring their own progress. This empowers patients by putting the control in their own hands.
This shift in power is already happening—for instance, a recent survey by Deloitte found that more than a third of respondents are willing to use at-home diagnostics, and more than half are comfortable telling their doctor when they disagree with them.
It’s All About the Experience
Through the use of wearables, smart devices, and personalized apps, patients are becoming increasingly more connected, and therefore less dependent on traditional healthcare.
However, as virtual care becomes more common, healthcare workers need to maintain a high quality of care. To do this, virtual training for physicians is critical, along with user-friendly platforms and intentionally designed apps to provide a seamless user experience.
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Maritime transport is an essential part of international trade—approximately 80% of global merchandise is shipped via sea.
Because of its importance, commercial shipping relies on strategic trade routes to move goods efficiently. These waterways are used by thousands of vessels a year—but it’s not always smooth sailing. In fact, there are certain points along these routes that pose a risk to the whole system.
Here’s a look at the world’s most vulnerable maritime bottlenecks—also known as choke points—as identified by GIS.
What’s a Choke Point?
Choke points are strategic, narrow passages that connect two larger areas to one another. When it comes to maritime trade, these are typically straits or canals that see high volumes of traffic because of their optimal location.
Despite their convenience, these vital points pose several risks:
- Structural risks: As demonstrated in the recent Suez Canal blockage, ships can crash along the shore of a canal if the passage is too narrow, causing traffic jams that can last for days.
- Geopolitical risks: Because of their high traffic, choke points are particularly vulnerable to blockades or deliberate disruptions during times of political unrest.
The type and degree of risk varies, depending on location. Here’s a look at some of the biggest threats, at eight of the world’s major choke points.
Because of their high risk, alternatives for some of these key routes have been proposed in the past—for instance, in 2013 Nicaraguan Congress approved a $40 billion dollar project proposal to build a canal that was meant to rival the Panama Canal.
As of today, it has yet to materialize.
A Closer Look: Key Maritime Choke Points
Despite their vulnerabilities, these choke points remain critical waterways that facilitate international trade. Below, we dive into a few of the key areas to provide some context on just how important they are to global trade.
The Panama Canal
The Panama Canal is a lock-type canal that provides a shortcut for ships traveling between the Pacific and Atlantic oceans. Ships sailing between the east and west coasts of the U.S. save over 8,000 nautical miles by using the canal—which roughly shortens their trip by 21 days.
In 2019, 252 million long tons of goods were transported through the Panama Canal, which generated over $2.6 billion in tolls.
The Suez Canal
The Suez Canal is an Egyptian waterway that connects Europe to Asia. Without this route, ships would need to sail around Africa, which would add approximately seven days to their trips. In 2019, nearly 19,000 vessels, and 1 billion tons of cargo, traveled through the Suez Canal.
In an effort to mitigate risk, the Egyptian government embarked on a major expansion project for the canal back in 2015. But, given the recent blockage caused by a Taiwanese container ship, it’s clear that the waterway is still vulnerable to obstruction.
The Strait of Malacca
At its smallest point, the Strait of Malacca is approximately 1.5 nautical miles, making it one of the world’s narrowest choke points. Despite its size, it’s one of Asia’s most critical waterways, since it provides a critical connection between China, India, and Southeast Asia. This choke point creates a risky situation for the 130,000 or so ships that visit the Port of Singapore each year.
The area is also known to have problems with piracy—in 2019, there were 30 piracy incidents, according to private information group ReCAAP ISC.
The Strait of Hormuz
Controlled by Iran, the Strait of Hormuz links the Persian Gulf to the Gulf of Oman, ultimately draining into the Arabian Sea. It’s a primary vein for the world’s oil supply, transporting approximately 21 million barrels per day.
Historically, it’s also been a site of regional conflict. For instance, tankers and commercial ships were attacked in that area during the Iran-Iraq war in the 1980s.
The Bab el-Mandeb Strait
The Bab el-Mandeb Strait is another primary waterway for the world’s oil and natural gas. Nestled between Africa and the Middle East, the critical route connects the Mediterranean Sea (via the Suez Canal) to the Indian Ocean.
Like the Strait of Malacca, it’s well known as a high-risk area for pirate attacks. In May 2020, a UK chemical tanker was attacked off the coast of Yemen–the ninth pirate attack in the area that year.
Due to the strategic nature of the region, there is a strong military presence in nearby Djibouti, including China’s first ever foreign military base.
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