Coronavirus - Macro Investment Aspects Only

[langley59]

viewtopic.php?p=338650#p338650
Referencing a post I made on the Beerpig's Snug No Politics Coronavirus Thread it seems clear that the Great Reset at the beginning of next year will fundamentally change the global economy. Putting aside the geopolitical aspects of this (which for the record I am totally opposed to) I worry what the impact will be on investment portfolios like mine (the usual HYP shares, income investment trusts & ETFs, etc) which I have spent decades building and now rely on to fund my retirement. Which investments will prosper and which will be destroyed? Will the trend towards 'work from home' stocks continue to propel big tech and other cloud service providers much higher and will today's laggards like retail and oil continue to get hammered? Green revolution investments ought to prosper but which investments specifically? Moreover will the transformation from 'shareholder capitalism to stakeholder responsibility' imply a poor future for traditional investments in shares generally?

In my opinion this is one of, if not the most, significant event facing us as investors, but no-one seems to be talking about it. Perhaps I should have started a new topic but I have put it in this coronavirus macro investment topic for now given the clear connection between the two.

See further information on the World Economic Forum website:
https://www.weforum.org/great-reset/about

[odysseus2000]

langley59
Referencing a post I made on the Beerpig's Snug No Politics Coronavirus Thread it seems clear that the Great Reset at the beginning of next year will fundamentally change the global economy. Putting aside the geopolitical aspects of this (which for the record I am totally opposed to) I worry what the impact will be on investment portfolios like mine (the usual HYP shares, income investment trusts & ETFs, etc) which I have spent decades building and now rely on to fund my retirement. Which investments will prosper and which will be destroyed? Will the trend towards 'work from home' stocks continue to propel big tech and other cloud service providers much higher and will today's laggards like retail and oil continue to get hammered? Green revolution investments ought to prosper but which investments specifically? Moreover will the transformation from 'shareholder capitalism to stakeholder responsibility' imply a poor future for traditional investments in shares generally?

In my opinion this is one of, if not the most, significant event facing us as investors, but no-one seems to be talking about it. Perhaps I should have started a new topic but I have put it in this coronavirus macro investment topic for now given the clear connection between the two.

I have no idea what will happen and so I am speculating based on what I see now and that may not apply in the future.

In terms of HYP it likely comes down to competition. Will the existing business that have been able to provide good dividends continue to do so or will they be hurt by new secular trends.

As things now are there is a clear shift from hydrocarbon power to renewable power and that will either kill business that rely on such fuel or supporting such fuel usage or cause them to radically change. This is a company by company thing within the overall macro picture. Given the life expectancy of renewables and the money already spent on them I do not see anything but increasing renewable power as no one now wants to invest in hydrocarbon facilities.

In terms of retailing it looks very likely to me that this has now permanently moved on-line. A couple of days ago I went to buy some motor bearings from a local distribution centre. They have had a trade counter for decades, but now it is closed and I had to get everything on-line.

In terms of offices this too looks to have decisively moved on-line. I do not see why management will want to keep expensive offices going when they have found that their staff are as productive without such overheads and many are happy to avoid commuting. Stocks like Apple should do very well as they transition to a hardware and service business supporting this.

As things now are all of these things suggest to me that on-line stuff like Amazon, eBay, PayPal, Royal Mail etc should prosper going forwards along with the existing bricks and mortar business that develop strong on-line presences, such as Argos and John Lewis look to be doing.

In transport this looks very likely that internal combustion engines are going to decline fast and that will hurt the oil companies although they are diversifying into supply charging etc.

The big uncertainty is how will Artificial Intelligence develop. If we assume any kind of growth rate compounding then the capability of AI will become better than humans, it is just a case of what growth rate and for now it is large.

If AI does take off then the amount of leisure time will increase significantly and some business will do well from this.

Additionally if the green tech displaces hydro-carbons the decrease in pollution should increase life expectancy.

We are in a major revolution in many aspects of human life and technology and the lessons from the history of revolutions are that the business that are in step with this will prosper, those out of step are doomed.

I view a lot of this as being super positive as it provides much improved quality of life for many. It will probably make investment more challenging and potentially threaten many of the things we have taken for granted as being needed such as money controlled by governments. Cyber currencies may have very significant effects as sources of value given that e.g. bitcoin has a limit on the number of bit coins, unlike national currencies.

Investment going forwards will not be easy, but it never has been, especially in industrial revolutions.

Regards,

[Itsallaguess]

I do not see why management will want to keep expensive offices going when they have found that their staff are as productive without such overheads and many are happy to avoid commuting.

As someone who's been working from home since the initial lock-down, I can think of a few reasons, some of which may not yet have hit home to many of those companies currently 'enjoying' their empty office-space...

1. Employee mental health - I imagine many employees would get huge personal benefit from spending at least some of their working week in an office environment. Home working clearly suits some people 100% of course, but for many more, they might now fully appreciate that it's absolutely not as good as they might have previously imagined it to be... How long any 'office-based' periods might have to be may drive the new size of any particular office-space requirements, of course, but that's different from thinking that no office-space will be required at all...

2. Employee physical health - We're in the relative early days of large sections of society working from home, and up to now we may have got away with large numbers coping with uncomfortable kitchen chairs, and poor posture from leaning over a laptop and monitor on a small set of nested tables, but companies have a duty of care to their employees that will become more and more apparent the longer any working-from-home requirement goes on for. I'm stunned that I've not yet spotted any 'Bad back from working from home? Call xxxxxxxx to claim from your company' adverts, but they will come, and this will be an important issue over the medium and longer term...I'm still waiting for my home-based DSE assessment, and it ain't going to be pretty...

3. Staff development - Especially important to younger employees. It's much, much more difficult to deliver good development processes with employees who never get to see their team, and that's just 'work-based' processes, before we even get onto what might be equally-as-important work-related 'inter-personal' skills.... One of the overriding feelings I've had during my time working from home has been simply to think 'How would I have positively developed this week if I were under the age of 20 on my team', and the answers are almost uniquely negative in a way that would not have been in an office-based environment...

4. Staff retention - Linked with the point above, but at the other end of the spectrum - How does a company retain staff that have lost many of their team and office-based 'hooks' into the company? The 'hooks' become much fewer, and much weaker, I think, for older staff who are now 100% home-based. Couple this issue, where retaining experienced staff is more difficult, with the point above where at the same time younger staff are finding it much more difficult to develop, and I think it's likely that longer term structural issues will begin to emerge in many organisations due to any move to 100% home-working, if something isn't put in place to positively counter both very important issues, and that 'something' is very likely to require at least *some* face-to-face working requirements in a building of some sort...

I'm sure there's a few more, but I just wanted to say that I think it's too early to jump to conclusions in this area at the moment. Where many companies might have been able to prove to themselves that they *can* operate from a largely home-based organisation, let's not forget that for many of us working from home, that requirement is largely driven by a risk-based assessment or a medical need at the moment, which is not the same as asking what that working landscape might look like if that medical need could be removed or largely mitigated at some point in the future. There's a difference between a company asking themselves 'Can we largely cope if we work like that over the short term?', and them asking 'Is the business viable if we work like that from now on?'....

Whilst you seem to be thinking that collectively we've now 'proved' that we don't need offices for huge parts of the working population, I would argue as someone that's been working from home over that period that the time from initial lock-down has actually now been long enough to 'prove' to many companies and employees that, actually, for many reasons that we weren't previously aware of, we really do...

Cheers,

Itsallaguess

[odysseus2000]

Whilst you seem to be thinking that collectively we've now 'proved' that we don't need offices for huge parts of the working population, I would argue as someone that's been working from home over that period that the time from initial lock-down has actually now been long enough to 'prove' to many companies and employees that, actually, for many reasons that we weren't previously aware of, we really do...

Cheers,

Itsallaguess

Good points.

There are many examples of people adapting to new ways of doing things. When computers arrived, many had to print things out, saying that they could not read of the screen, but now hardly anyone says this, most have adapted to screen reading.

in terms of health, the avoidance of the stress, pollution, virus that one is exposed to while commuting along with expensive commuting, season tickets, parking, depreciation of vehicle etc all adding to stress may off set many of the issues you mention. i also heard these kinds of arguments with public houses, how people had to socialise etc, but most pubs have gone.

Mental health is potentially better at home being around people you have chosen, rather than just work colleagues.

Training can be dealt with by having specific training events.

Staff retention is often about how people feel & if everyone is operating on-line there is little difference to employee conditions.

No doubt some will never adapt to online working, but the longer the c19 trouble remains the more people will become accustomed to online working and the more difficult it will be to go back to older ways.

Adding into this are the increasing use of synthetics to do the more boring call centre stuff & the potential that before too long more jobs will be handled with synthetics. I was looking at the screwfix store when I got some stuff. It had a lot of people going & fetching stuff. That could now be done with a machine. At my grocery store I have used the "u-scan" since c19 got going both for goods & fuel, no operators, just a single person who fixes the odd trouble. This move to operator free working is only in its very early infancy.

Regards,

[odysseus2000]

Some new ideas on the spread mechanisms of c19:

https://elemental.medium.com/the-most-l ... 430384e5a5

It is interesting how the original advice that masks don't help has now been entirely reversed along with the sanitise everything that has also been reversed.

If this advice catches on, the makers of hepa filters and such are likely in for a bonanza.

Regards,

[TUK020]

I do not see why management will want to keep expensive offices going when they have found that their staff are as productive without such overheads and many are happy to avoid commuting.

As someone who's been working from home since the initial lock-down, I can think of a few reasons, some of which may not yet have hit home to many of those companies currently 'enjoying' their empty office-space...

1. Employee mental health - I imagine many employees would get huge personal benefit from spending at least some of their working week in an office environment. Home working clearly suits some people 100% of course, but for many more, they might now fully appreciate that it's absolutely not as good as they might have previously imagined it to be... How long any 'office-based' periods might have to be may drive the new size of any particular office-space requirements, of course, but that's different from thinking that no office-space will be required at all...

2. Employee physical health - We're in the relative early days of large sections of society working from home, and up to now we may have got away with large numbers coping with uncomfortable kitchen chairs, and poor posture from leaning over a laptop and monitor on a small set of nested tables, but companies have a duty of care to their employees that will become more and more apparent the longer any working-from-home requirement goes on for. I'm stunned that I've not yet spotted any 'Bad back from working from home? Call xxxxxxxx to claim from your company' adverts, but they will come, and this will be an important issue over the medium and longer term...I'm still waiting for my home-based DSE assessment, and it ain't going to be pretty...

3. Staff development - Especially important to younger employees. It's much, much more difficult to deliver good development processes with employees who never get to see their team, and that's just 'work-based' processes, before we even get onto what might be equally-as-important work-related 'inter-personal' skills.... One of the overriding feelings I've had during my time working from home has been simply to think 'How would I have positively developed this week if I were under the age of 20 on my team', and the answers are almost uniquely negative in a way that would not have been in an office-based environment...

4. Staff retention - Linked with the point above, but at the other end of the spectrum - How does a company retain staff that have lost many of their team and office-based 'hooks' into the company? The 'hooks' become much fewer, and much weaker, I think, for older staff who are now 100% home-based. Couple this issue, where retaining experienced staff is more difficult, with the point above where at the same time younger staff are finding it much more difficult to develop, and I think it's likely that longer term structural issues will begin to emerge in many organisations due to any move to 100% home-working, if something isn't put in place to positively counter both very important issues, and that 'something' is very likely to require at least *some* face-to-face working requirements in a building of some sort...

I'm sure there's a few more, but I just wanted to say that I think it's too early to jump to conclusions in this area at the moment. Where many companies might have been able to prove to themselves that they *can* operate from a largely home-based organisation, let's not forget that for many of us working from home, that requirement is largely driven by a risk-based assessment or a medical need at the moment, which is not the same as asking what that working landscape might look like if that medical need could be removed or largely mitigated at some point in the future. There's a difference between a company asking themselves 'Can we largely cope if we work like that over the short term?', and them asking 'Is the business viable if we work like that from now on?'....

Whilst you seem to be thinking that collectively we've now 'proved' that we don't need offices for huge parts of the working population, I would argue as someone that's been working from home over that period that the time from initial lock-down has actually now been long enough to 'prove' to many companies and employees that, actually, for many reasons that we weren't previously aware of, we really do...

Cheers,

Itsallaguess

IAAG,
well thought out and articulated post.
I run a small company (<20 people) and we transitioned to home working at the beginning of March (we didn't wait for govmt lockdown). Productivity has held up remarkably well.
I worry a lot about staff mental health effects and team spirit. Young graduates living on their own in a small flat have had a particularly tough time.
I try to have a one to one video call with each member of staff every week (surprisingly difficult to make time for), if only to talk about the weather. It helps me to detect budding problems before they get too big. Buying folks new chairs/webcams, even a coffee machine in one case, is a very small price to pay to keep the troops feeling loved and cared for.
Sometimes I feel that it has turned my job into that of a social worker, but I guess if that's what the times demand....

[gnawsome]

I do not see why management will want to keep expensive offices going when they have found that their staff are as productive without such overheads and many are happy to avoid commuting.

As someone who's been working from home since the initial lock-down, I can think of a few reasons, some of which may not yet have hit home to many of those companies currently 'enjoying' their empty office-space...
Itsallaguess

I'm not very confident in my attempt to raise another prospective vision of the future but
if employees want their costs and time devoted to working reduced...
and the employers want the employing costs reduced
perhaps the idea may have a mirror image where the employee lives at their place of work -- great savings for all concerned and excellent productivity. Fill up that empty office space and make more homes available to the market too
Is it called... slavery?

[PeterGray]

It is interesting how the original advice that masks don't help has now been entirely reversed along with the sanitise everything that has also been reversed.

Regards,

I don't remember "original advice" that masks don't help. There have always been sceptics, and it's true that the govt encouraged people not to use them when they were unable to guarantee supply and wanted them to go to hospitals. But I've never seen any serious suggestion that masks don't help.

[Itsallaguess]

Perhaps the idea may have a mirror image where the employee lives at their place of work..

Is it called... slavery?

You can call it what you like - where do I sign?!?!



Cheers,

Itsallaguess

[redsturgeon]

It is interesting how the original advice that masks don't help has now been entirely reversed along with the sanitise everything that has also been reversed.

Regards,

I don't remember "original advice" that masks don't help. There have always been sceptics, and it's true that the govt encouraged people not to use them when they were unable to guarantee supply and wanted them to go to hospitals. But I've never seen any serious suggestion that masks don't help.

The government discouraged the use of masks by saying that there was little evidence that they were useful for general public usage, citing improper use and tendency for people to reduce social distancing measures if wearing them. There was also the big story that they might prevent you spreading the virus but did little or nothing to stop to you catching it.

The reasons they did this may have been to prevent more shortages but the message they gave out was not "please don't use masks because they are in short supply" rather it was, "masks don't help that much".

This was later changed to "face coverings help but don't use medical supplies because the NHS and carers need them.

John

[gnawsome]

You can call it what you like - where do I sign?!?!


Cheers,
Itsallaguess

Do you mind my asking, would you be signing as an employee or as an employer?

[funduffer]

I have no idea what will happen and so I am speculating based on what I see now and that may not apply in the future.

In terms of HYP it likely comes down to competition. Will the existing business that have been able to provide good dividends continue to do so or will they be hurt by new secular trends.

As things now are there is a clear shift from hydrocarbon power to renewable power and that will either kill business that rely on such fuel or supporting such fuel usage or cause them to radically change. This is a company by company thing within the overall macro picture. Given the life expectancy of renewables and the money already spent on them I do not see anything but increasing renewable power as no one now wants to invest in hydrocarbon facilities.

In terms of retailing it looks very likely to me that this has now permanently moved on-line. A couple of days ago I went to buy some motor bearings from a local distribution centre. They have had a trade counter for decades, but now it is closed and I had to get everything on-line.

In terms of offices this too looks to have decisively moved on-line. I do not see why management will want to keep expensive offices going when they have found that their staff are as productive without such overheads and many are happy to avoid commuting. Stocks like Apple should do very well as they transition to a hardware and service business supporting this.

As things now are all of these things suggest to me that on-line stuff like Amazon, eBay, PayPal, Royal Mail etc should prosper going forwards along with the existing bricks and mortar business that develop strong on-line presences, such as Argos and John Lewis look to be doing.

In transport this looks very likely that internal combustion engines are going to decline fast and that will hurt the oil companies although they are diversifying into supply charging etc.

The big uncertainty is how will Artificial Intelligence develop. If we assume any kind of growth rate compounding then the capability of AI will become better than humans, it is just a case of what growth rate and for now it is large.

If AI does take off then the amount of leisure time will increase significantly and some business will do well from this.

Additionally if the green tech displaces hydro-carbons the decrease in pollution should increase life expectancy.

We are in a major revolution in many aspects of human life and technology and the lessons from the history of revolutions are that the business that are in step with this will prosper, those out of step are doomed.

I view a lot of this as being super positive as it provides much improved quality of life for many. It will probably make investment more challenging and potentially threaten many of the things we have taken for granted as being needed such as money controlled by governments. Cyber currencies may have very significant effects as sources of value given that e.g. bitcoin has a limit on the number of bit coins, unlike national currencies.

Investment going forwards will not be easy, but it never has been, especially in industrial revolutions.

Regards,

Interesting thoughts which I tend to agree with.

In terms of where to invest, and picking winners, it is clearly going to be difficult, as at times of great change, winners can emerge from nowhere, and old companies can collapse quite quickly.

So in an era of declining dinosaurs and rising robots, maybe a world tracker fund is the best bet? The market will quickly sort out the winners from the losers.
FD

[langley59]

I agree that you take a big risk buying individual companies as who knows what may happen so global trackers and investment trusts are getting a bigger share of my long term income producing portfolio. I may speculate on individual companies but that's all its going to be from now on, no HYP type shares again for me.

However no-one seems to have picked up on my point about the transformation from 'shareholder capitalism to stakeholder responsibility' statement on the World Economic Forum website in relation to the 2021 Great Reset. What could this do to shares as an asset class I wonder?

[odysseus2000]

langley59
However no-one seems to have picked up on my point about the transformation from 'shareholder capitalism to stakeholder responsibility' statement on the World Economic Forum website in relation to the 2021 Great Reset. What could this do to shares as an asset class I wonder?

This reads like the words of a theoretical study of equity owners by someone who does not make their living from trading/investing.

People mostly buy and sell equites to make money. They are trading vehicles that go up and down. Very few people own companies and are stake holders in that sense, and are focused on long term holding and long term performance.

Even people who own business will sell them if they see a better opportunity for the liberated cash, either because they see more growth elsewhere or believe bad times are coming for their existing business.

Regards,

[langley59]

Sorry but I think you are missing the point, this is all about a new global economic model.

[odysseus2000]

Sorry but I think you are missing the point, this is all about a new global economic model.

What is the evidence of a new global economic model?

Regards,

[langley59]

Sorry but I think you are missing the point, this is all about a new global economic model.

What is the evidence of a new global economic model?

Regards,

I refer you to the World Economic Forum website I referenced previously. They openly talk about the Great Reset to be launched early next year. This appears to me to be an acceleration of the Agenda 21/2030 plan which has been in existence since 1992 and signed up to by most governments. These things are hidden in plain sight but are probably the most significant events which will affect us all economically and socially, they are not a conspiracy theory they are real. In short global government, sustainable development, control of the population, economic equalisation between rich and poor countries. In my opinion the reaction to covid by governments (see Event 201 which simulated such a pandemic before it happened) fits neatly within this overall plan.

[odysseus2000]

Sorry but I think you are missing the point, this is all about a new global economic model.

What is the evidence of a new global economic model?

Regards,

I refer you to the World Economic Forum website I referenced previously. They openly talk about the Great Reset to be launched early next year. This appears to me to be an acceleration of the Agenda 21/2030 plan which has been in existence since 1992 and signed up to by most governments. These things are hidden in plain sight but are probably the most significant events which will affect us all economically and socially, they are not a conspiracy theory they are real. In short global government, sustainable development, control of the population, economic equalisation between rich and poor countries. In my opinion the reaction to covid by governments (see Event 201 which simulated such a pandemic before it happened) fits neatly within this overall plan.

This is one school of political thought, often called the globalist agenda where there is a belief that the politicians can manage humans in the way that a farmer manages his/her animals.

Whether this can be made to work is a big open question. Previous examples of the Soviet Union, the Cultural revolution in China did not go well. These centrally planned systems rely on the politicians being able to run economies across time zones and cultural lines, but in practice the results have been terrible.

One can argue that the EU is another example of a centrally planned system and that this time it will work as there is far better information available to the politicians who have better understanding of the needs of their citizens. In the UK the current administrations is having great troubles dealing with the pandemic whereas the belief of the centrally planned advisors is that government has the resources and knowledge to do better than individuals.

It is possible that the advent of super intelligent AI systems can make all of these ideas work, but it seems unlikely to me, based on all the historical evidence, that anything which we have now is capable of doing what the globalist believe is possible.

As far as I can tell this new global economic model is an academic theory which looks great on paper and can be justified, but which will not work in practice as people, unlike a farmers stock, will rebel and force change if they do not like what is being done. If the centrally planned economies seizes enough power they can suppress rebellion, but crushing free enterprise leads to a declining economy as the folk who have the gifts to generate wealth are stopped from operating and one ends up with places like East Germany before the wall came down.

Regards,

[odysseus2000]

Some thoughts on the investment opportunities available now.

Investment conditions
The investment background is poor with the increased restrictions, potential job losses and currently no increase in Covid relief from the chancellor and limited progress on a Covid vaccine.

Longs that have worked

However, there have been some strong investment opportunities:

Pandemic remote working tools: Zoom, Apple,...

Increased parcel traffic: Royal Mail, Fedex...

Anti-virus personel products: Soap etc, Pz Cussons...

Feel good personal wear: Nike ...

Potential short opportunities:

Banks. If more folk losing jobs and an end to Covid relief then bank loans, credit card debt, mortgages etc, are in danger of not being paid.

Legacy auto, less work, less commuting, new battery competitors

Airlines, cruise ships, hospitality (pubs, restaurants, hotels, holidays, airlines, coach, bus ...), although these are already in great trouble.

Potential news driven long opportunities:

Pharma, any business that can come up with some useful weapon against Covid 19. One could front run with plays like Gild, but if someone else gets something and they don't there will be potential losses and missed opportunity.

Do people have other suggestions?

Regards,

[dealtn]

Do people have other suggestions?

That you haven't just discovered this as the first person and that maybe it's already priced in?