Gun sales likely to remain high; China's President Xi Jinping Personally Scuttled Jack Ma's Ant IPO; The Digital Nomads Did Not Prepare for This; The eight states that face the highest risk of getting walloped by the pandemic in the coming months

1) Though we thankfully haven't seen any meaningful election-related unrest, as many feared we might, one sector likely to benefit from the Joe Biden win that Enrique, Berna, and I predicted in our September 23 webinar is gun makers like Smith & Wesson Brands (SWBI).

At first glance, it may appear counterintuitive – gun sales are inversely correlated to the perceived gun-friendliness of the administration in power. When the White House is occupied by a Democrat, gun owners scramble to buy more of them because they fear Democrats will try to restrict sales – or take them away entirely.

SWBI is up 272% since we recommended it to readers of our Empire Investment Report just over a year ago, and we continue to think the stock has more upside ahead – especially in light of the election results. (If you aren't already a subscriber, you can find out how to gain access to the rest of the stocks in our "Biden Investment Blueprint" portfolio right here.)

Here's a recent CNBC video report on the sector: Gun sales skyrocket ahead of the U.S. presidential election as fears of unrest grow.

2) When news broke 10 days ago that the Shanghai Stock Exchange had postponed the blockbuster initial public offering of Chinese payments giant Ant Group, I speculated that regulators might have uncovered fraud.

It was a reasonable guess in light of the widespread fraud that pervades China's economy and stock markets (one of the main reasons I've never invested there), but it looks like I was wrong.

This front-page story in today's Wall Street Journal, China's President Xi Jinping Personally Scuttled Jack Ma's Ant IPO, reveals that it was more of a political power play. It's an outstanding piece of journalism and well worth reading if you want to better understand how things really work at the highest levels in China. Excerpt:

Chinese President Xi Jinping personally made the decision to halt the initial public offering of Ant Group, which would have been the world's biggest, after controlling shareholder Jack Ma infuriated government leaders, according to Chinese officials with knowledge of the matter.

The rebuke was the culmination of years of tense relations between China's most celebrated entrepreneur and a government uneasy about his influence and the rapid growth of the digital-payments behemoth he controlled.

Mr. Xi, for his part, has displayed a diminishing tolerance for big private businesses that have amassed capital and influence – and are perceived to have challenged both his rule and the stability craved by factions in the country's newly assertive Communist Party.

3) This story cracked me up, especially the part about the American who successfully applied for political asylum... in Portugal! The Digital Nomads Did Not Prepare for This. Excerpt:

If you're going to work from home indefinitely, why not make a new home in an exotic place? This tiny cohort gathered their MacBooks, passports and N95 masks and became digital nomads.

They Instagrammed their workdays from empty beach resorts in Bali and took Zoom meetings from tricked-out camper vans. They made balcony offices at cheap Tulum Airbnbs and booked state park campsites with Wi-Fi. They were the kind of people who actually applied to those remote worker visa programs heavily advertised by Caribbean countries. And occasionally they were deflated...

In March, Ryan McCumber, a business consultant, was stuck in Portugal. He had been traveling in Europe, and a comedy of errors and the sudden continentwide lockdown stranded him in a beach town in the Algarve with just four days of clothes while his dog and the rest of his luggage remained in Warsaw, a previous stop.

The pandemic made his conference business nonviable, so while in Portugal he decided to create a start-up accelerator focused on sports technology. The biggest challenge, Mr. McCumber said, was not making his partners in the United States too jealous while he took calls from the beach.

Although a mugger assaulted him, giving him 15 stitches and a scar above his eye, he fell in love with Portugal's cheap sangrias and ocean air, and in early summer, when his airline finally offered him a flight home, he didn't want to leave. With his visa already expired, Mr. McCumber went to the immigration bureau and asked for political asylum.

"I said, 'Trump's a dictator, my city is burning, and people are dying,'" he said, citing the president, protests against police violence and the virus. "They made a joke that I was the first person since the Vietnam War from America to ask for that."

The government workers laughed, he said, and then approved an extension through the end of October. (Mr. McCumber has since returned to the United States.)

4) Speaking of the pandemic, here's a quick follow-up to yesterday's e-mail...

In it, I wrote:

What we're seeing across the country is consistent with what the herd immunity threshold theory would predict – namely, areas that were hardest hit earlier this year (and thus built up some level of population immunity – though, to be clear, not full herd immunity) are being least affected right now, and vice versa.

If this is correct, then it logically follows that the states that are most likely to get walloped next are ones that have yet to be affected to any significant degree.

To see which states these might be, I went back to the chart in my last e-mail that shows the hospitalizations per million over the course of the pandemic for each state. Here's what they look like for all 50 states:

Note that on the right, you can select any state to highlight it, so I did that for all 50 states, looking for ones that have consistently had hospitalizations below 100 per million – meaning they haven't been hit to any material degree.

I found five: three in the northeast (Maine, New Hampshire, and Vermont) and two in the northwest (Oregon and Washington), as you can see in this chart:

In addition, I found three more states – Idaho, Utah, and North Carolina – that have had modestly higher levels of hospitalizations, but no prior wave:

Note that Idaho and Utah hospitalizations have risen sharply over the past two months, whereas those in North Carolina have been flat since late July. (I wish the website had different colors for each state, so one could more easily see this.)

In light of this, the policy implications for these eight states are clear:

• They should not be complacent because their numbers are so good. In fact, it's just the opposite – their good numbers to date mean they're at especially high risk of getting walloped in the coming months.
• Thus, they should be testing like crazy, so they can quickly identify outbreaks. If the leading indicators – new cases and positivity rate – start rising, they need to act fast to do a handful of things, like reduce travel from other states... mandate quarantining for travelers... mandate mask wearing (which is exactly what Utah's governor just did: Utah Gov. Announces Statewide Mask Mandate, Citing Steep Spike In COVID-19 Cases)... and increase social distancing (for example, reduce indoor dining, which a new study shows is particularly dangerous – see this recent New York Times article: Limiting Indoor Capacity Can Reduce Coronavirus Infections, Study Shows).

Best regards,

Whitney