I am buying these 2 resilient stocks during a bear market

There is an old saying in real estate investing: “You don’t make your money when you sell, you make it when you buy.” While that is generally used as a real estate quote, it applies quite well in bear market environments. In fact, some of the best ROI I’ve ever achieved was from pursuing resilient businesses during the initial collapse of the COVID-19 pandemic.

It is always important to be selective. This is not an excellent market environment for unprofitable businesses that might need to raise capital, for example. However, buying businesses that are well positioned to get through the tough times and grow on the other side can be a great way to build long-term wealth. With that in mind, here are three stocks I’ve been buying recently in my personal portfolio.

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A great deal through thick and thin

If you have been to one of Disney‘s (DIS -0.70%) theme parks lately or visited a movie theater when one of its latest releases hits theaters, it may seem surprising that the entertainment conglomerate is down roughly 45% from its highs.

Disney’s business has recovered nicely from the disruptions of the pandemic era. Revenue more than doubled year-over-year in the parks, experiences and products segment of the business as the company reported strong attendance and spending per visitor. It’s also worth noting that international tourism has yet to return to pre-pandemic levels, which could provide another growth boost.

Disney’s iconic properties, movie franchises and intellectual property should keep the business strong, even in a downturn. And the streaming division has created a massive stream of recurring revenue.

Speaking of streaming, there are some concerns about Disney+’s growth slowing, but consider this: Disney+ has 137.7 million subscribers at the end of the first quarter. Disney’s original subscriber goal when it launched the platform in November 2019 was 60 million to 90 million in five years.

The stock is now trading 25% below what it was trading at day one of the existence of the streaming service. Simply put, Disney seems like a no-brainer to add to your portfolio at these levels.

E-commerce is a trend that not even a bear market can break

Retail earnings haven’t exactly been good lately. Goal Y walmart missed earnings expectations by a wide margin, and even Amazon is showing signs of weakness in this inflationary environment. With a recession likely and retailers’ limited ability to raise prices, we could see margins and sales volume come under temporary pressure.

For the time being, free market‘s (MELI -3.23%) the business is firing on all cylinders, even though the stock is down about 63% from its peak. The e-commerce and fintech giant’s revenue was up 67% year-over-year in the first quarter, and that’s on top of pandemic-driven 2021 numbers.

The volume of merchandise on the platform grew by 32% and the logistics segment of Mercado Envios now handles more than 90% of the volume. On the fintech side, the total payment volume of the Mercado Pago payment platform grew 81% year over year and exceeded $100 billion in annualized volume for the first time. And finally, Mercado Credito (a recent growth area for the company) more than quadrupled its loan portfolio to $2.4 billion over the past year.

In a nutshell, the performance of this stock has been quite disconnected from the performance of the actual business. I have been adding MercadoLibre shares gradually since the market downturn started and will probably continue to do so.

long term purchase

To be perfectly clear, while I think these two stocks are incredible bargains from a long-term perspective, I have no idea what these stocks will do in the coming weeks or months. And if inflation gets even worse, or we end up in a deeper recession than the experts say, it’s very possible that both will drop significantly from the current level. However, both are such solid and resilient businesses that I have been buying them gradually, with the plan of ignoring the inevitable short-term rollercoaster ride as the market downturn unfolds.

The bottom line is this: If you measure your investment performance in decades, this could be a great opportunity to add these two great businesses to your portfolio at a discount.

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