This past March, as COVID-19 was beginning to sucker-punch both the world economy and each of us at the most personal level (our physical survival), I began to offer my thoughts regarding societal influences and investment themes created by our new pandemic-dominated world.
Many kindly expressed their appreciation for what, on balance, was meant to be a more forward-looking and constructive attitude on where events might be taking us. Selfishly, the communication also helped me cope… I was grateful for the feedback, observations and encouragement many of you gave. Thanks.
But…since accountability is essential to a properly functioning society, including what you say or write, it’s time to revisit my predictions and gauge how my crystal ball has performed thus far in our “new normal.” So, let’s take a look (admittedly, I’m conflicted as I try to rate myself…).
I’ll use the star system – 1 star = NOT, 3 stars TBD, 5 stars = Score! (so far…).
In this piece, I’ll just focus on the Covid-related “influences” I highlighted last March. Over the next several epistles, I’ll review more specific investment themes – where investment $$$ are being made.
COVID-related “Influences”
Shuffling priorities – 5 Stars – Familiarity, reliability, and environmental control (our “space”) gain importance, despite inconveniences.
7 Months Later (7ML) – Keeping your frequent flyer points up? How’s the yoga class going?
During the early lock-down, our family enjoyed precious time together with our four millennials. Two came home and lived again with us for a while, and we shared more meals (and beer and wine) together than we had in a long time. It was a blessing.
But we didn’t venture far from home, and, then, it was to familiar places which felt safe. We’re each now living in bubbles in which we feel the most protected.
Harmony – 1 Star – We must play well with others.
7ML – Right… We’re seeing the worst street violence since the late ‘60’s.
While I’ve got no time for the isolated anarchy we’ve seen in so many U.S. cities, I have grown to support BLM – addressing systemic injustices which underly our society. My perspective has evolved, and my southern eyes have been opened, albeit reluctantly at first. Even COVID has taken a back seat to this movement.
While the world stage seems more tranquil, I get the sense it’s the calm before the storm. I strongly recommend that you read Peter Zeihan’s book, Disunited Nations for a sobering perspective.
Physical distancing – 4 Stars – More physical space is required around each of us.
7ML – Hard to argue this one… It now dominates virtually every venue and is rocking many major industries (airlines, finer-dining restaurants, shopping malls, entertainment). I’d argue that Fed stimulus $$$ and warmer summer months (when we have been able to stay outside) have kicked the can down the road. But I can’t imagine that massive and permanent job losses, along with reduced real estate value in certain sectors, isn’t going to result in more depressed, long-term economic consequences.
This isn’t a five star because bikers and a lot of college students apparently didn’t read the memo. The news, if it’s to be believed, suggests they’re getting it now.
Social distancing – 5 Stars – Avoiding larger gatherings
7ML – Been to any conference lately? How about church services? Wedding receptions? Concerts?
Most of us yearn for those events, but we’re in a waiting mode. I’m guessing that even when powerful vaccines have been approved and distributed – or if; I understand that it’s never been done for a virus), most will still be reluctant to rejoin the mosh pit.
On a positive note, obvious to most us in business, Zoom works surprisingly well for smaller and surprisingly large applications (like the virtual conferences, which I don’t find too virtual, just much more efficient).
Personal Relationships – 3 Stars – Speed-dating is out; monogamy and family are back in.
7ML – Strong relationships have been reinforced. Weaker ones are more vulnerable. It’s certainly tougher to forge new ones, so we’ll likely hang on to the old ones.
Personal Responsibility – 3 Stars – Individuals either play by the rules or they’re out.
7ML – I see peer pressure on many levels – in my office, at my daughter’s retail store, social media, etc. On balance it seems good, but I have a problem with businesses being aggressively “outed” as they each try to cope with this pandemic (i.e., stay in business).
While most of us are much more self-aware to disease transmission, and I’m guessing this trend will be with us for many years, I expect levels of concern by individuals will diverge even further over time – an interesting dilemma for businesses and other spaces catering to the public.
Truth & Transparency – 1 Star – “Fake news” becomes criminal for health-related matters.
7ML – So what’s “fake?” I can’t remember a time when there was so much controversy over where the truth lies. The efficacy of masks? The timing for a vaccine? It’s a hair-ball and will likely stay one.
Anonymity – 5 Stars – Don’t think so…
7ML – This is a direct result of the digital age and anyone using a computer or cell phone. Personally, I miss the old days when “no harm, no foul” was possible.
But we’re all now subject to a digital audit trail (particularly if you work in a regulated industry), and you’d better conduct your affairs accordingly.
Summary – What’s coming
Last march I also identified over 50 business themes I thought might actually flourish during and after COVID. Over the next several months, we’ll take a look at the numbers behind each and report what we’re finding.
Stay safe!
