Note: As the country reopens after the coronavirus lockdown, it may seem impossible to tell which businesses are going to resume operations and which will remain shuttered forever. But, as New York Times bestselling financial author Alexander Green explains in today's sponsored guest column, there's one sure way to determine if a business will thrive. Read on to find out what it is... And make you sure you take a look at his latest project with Bill O'Reilly: The Smartest Investment Strategy of All Time. We think you'll be interested in what they have to say.
Last week, I spent several days hiking and camping the Appalachian Trail with three buddies.
Our trailhead was in the Great Smoky Mountains, not far from Johnson City, Tennessee.
On the nights before and after our trip, we were delighted to find -since Tennessee was one of the first states to reopen -that a few local restaurants were bustling.
Yet the lights were still out at the vast majority. Why?
One reason is that -like millions of American households living paycheck to paycheck -some small businesses cannot survive 90 days or more without revenue, even if they receive a government stimulus check.
Moreover, the CARES Act hurt many restaurants in a way legislators didn't intend.
The $600-per-week supplement for jobless workers is more than some were making while employed.
That makes it tough for restaurants that depend on hostesses, busboys, dishwashers and other relatively low-paid workers to hire them back.
These furloughed employees are understandably concerned about potentially contracting COVID-19. So they aren't returning to work, especially since they can claim up to 39 weeks of unemployment benefits.
No doubt many restaurants -especially family owned and operated ones -will survive and prosper. Others will close their doors for good.
The folks running a major corporation -the operators and directors -have access to all sorts of material, nonpublic information about the company's current condition and future prospects.
You could be an expert in the industry. You could conduct a thorough months-long analysis. And you could make sales and earnings projections for the rest of this year and next.
But you still won't have nearly the understanding and experience of the men and women running the company -or know, as they do, whether the stock is overvalued or undervalued.
That gives these insiders an unfair advantage when they go into the market to buy or sell their own companies' shares. And the federal government knows it.
It's why the Securities and Exchange Commission requires them to file a Form 4 -detailing how many shares they bought or sold on what date and at what price -to inform the public about their transactions.