For most everyone else, the novel coronavirus has been a devastating period filled with fear, uncertainty and perhaps tragedy. But Amazon (NASDAQ:AMZN) CEO Jeff Bezos is not everyone else. Bezos became the first to crack the $200 billion mark in total wealth. Even if you’re not the e-commerce tycoon, owning AMZN stock has treated you very well.
On a year-to-date basis, shares are up over 72%. As a perfect demonstration of how insane 2020 has been, AMZN stock crossed the $3,000 threshold in July and I didn’t care.
No, I’m not suggesting that I’m the ultimate arbiter of sentiment toward Amazon. It’s just that we’ve seen so much turmoil, ranging from health concerns to social unrest, that what would be extraordinary news in any other circumstance is merely mundane.
Even crazier, if you’re thinking about buying AMZN stock, I believe you’re in luck. With broader market volatility, shares have come down notably from their peak price of over $3,500. Despite the exceptional run-up in the past year, this is a long-term bull run you can trust.
First, everything is going Amazon’s way. If I didn’t know any better, the coronavirus seems like a perfect conspiracy. After all, it’s small businesses that are going to suffer the most from this pandemic. With those pesky competitors gone, the e-commerce giant can swoop in like a market share vacuum cleaner.
Second, President Donald Trump might win reelection, which is great for Amazon’s anti-labor union stance. Sure, Trump and Bezos, who owns the Washington Post, often clash ideologically. However, when it comes to business interests, these two are well aligned.
AMZN Stock Wins Despite Severe Racial Disparity in America
But the biggest catalyst for AMZN stock could well be systemic racial inequality. You see, Amazon is one of those companies that utilizes “magic” diversity words when situations suit it. But in practice, the e-commerce firm has promoted practices that appear discriminatory.
This time around, Amazon’s brass doesn’t have to do anything. Turns out, the coronavirus has organically exacerbated racialized undertones in America. Frankly, stakeholders of AMZN stock merely need to sit back and collect the profits.
Here’s what I mean. While we celebrated the better-than-expected August jobs report where the national unemployment rate dropped to 8.4%, only whites have seen their joblessness metric hit single digits. Every other race in America has unemployment rates in double digits. According to the U.S. Bureau of Labor Statistics:
- White unemployment rate is 7.3%.
- Black unemployment is 13%.
- Hispanic unemployment is 10.5%.
- Asian unemployment is 10.7%.
Interestingly, at no point in recorded data until now has Asian unemployment been higher than Hispanic unemployment. As well, the jobless rate for workers of color have coalesced into a tight range averaging 11.4%.
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Here’s the kicker: white unemployment today is lower than Black unemployment was in 2017! If systemic racism deniers want to know what “systemic” means, this seems a solid definition. In this crisis, whites have been overwhelmingly favored relative to communities of color.
And Amazon will merely laugh its way to the bank. Keep in mind that whites more or less shop online the most. Today, whites are exclusively atop the social pyramid. The “model minority” Asians have disproportionately suffered the most economically during this crisis and have become decoupled from white employment trends.
Amazon Will Win the K-Shaped Recovery
Lately, I’ve been hearing economic debates that we will not have a V-shaped recovery. Instead, we will witness a K-shaped recovery. This means the top 20% or so of Americans will see their wealth grow significantly while everyone else plummets.
However, it’s also important to realize that the “K” will be mostly a white one. No matter who becomes president, unless America becomes very honest about its systemic racial inequalities, the social unrest that you see will likely worsen.
Look, I had no idea that Black unemployment was so persistently high in this country. And the fact that white unemployment today is better than Black unemployment was in 2017 was truly eye-opening. Basically, Blacks during bull markets have worse outcomes than whites in bear markets. Again, until we get honest with ourselves about this raging inequity, the unrest will continue.
But if we insist on kicking the race discussion can down the road, may I cynically suggest to you AMZN stock? Because for Amazon, there’s nothing better than having a de facto white country. At least economically, this is the whitest we’ve been in a long time.
On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article.
A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare.
