Coronavirus - Macro Investment Aspects Only

[odysseus2000]

dealtn
How does home working, and a reduction in commuting lead to increased demand for (you favourite) cars?

Home working means more money not immediately taken for commuting etc, so many families with have a surplus.

Meanwhile the politicians are ratcheting up the polluted air advertising and raising the fees to drive into cities, all of which can be tackled in a "Think Globally, act locally" manner by more solar panels/tiles on roofs and an electric car.

My observation of prosperity is that it causes enough people to seek the best, that higher prices are tolerated as in Apple products and with Tesla although the initial purchase price might be more that an ICE (although prices are dropping), the running costs, especially with a solar roofs, are much less. Makes for a good argument for the car lover that exits in most relationships to sell to the other car-don't care person.

I don't think one should ever under play the emotions people have to do good and to be seen doing good. For the moment an electric car is high up on the list of do good things and it is also financially attractive, a win win situation.

Regards,

[TUK020]

dealtn
How does home working, and a reduction in commuting lead to increased demand for (you favourite) cars?

Home working means more money not immediately taken for commuting etc, so many families with have a surplus.

Meanwhile the politicians are ratcheting up the polluted air advertising and raising the fees to drive into cities, all of which can be tackled in a "Think Globally, act locally" manner by more solar panels/tiles on roofs and an electric car.

My observation of prosperity is that it causes enough people to seek the best, that higher prices are tolerated as in Apple products and with Tesla although the initial purchase price might be more that an ICE (although prices are dropping), the running costs, especially with a solar roofs, are much less. Makes for a good argument for the car lover that exits in most relationships to sell to the other car-don't care person.

I don't think one should ever under play the emotions people have to do good and to be seen doing good. For the moment an electric car is high up on the list of do good things and it is also financially attractive, a win win situation.

Regards,

This thread is now 44 pages long.
Before you position yourself as uniquely qualified to read the tea leaves and predict how things are going to unfold, I suggest you re-read the first two posts in the thread.

[TUK020]

This thread is now 44 pages long.
Before you position yourself as uniquely qualified to read the tea leaves and predict how things are going to unfold, I suggest you re-read the first two posts in the thread.

On further reflection, I take that back, and apologize for the snotty comment.
You have consistently punted Tesla, and this has done very well since the beginning of Feb.

[langley59]

Home working means more money not immediately taken for commuting etc, so many families with have a surplus.

until the people working from home are replaced with people working from a cheaper offshore location, then the opposite may be true...

[odysseus2000]

Home working means more money not immediately taken for commuting etc, so many families with have a surplus.

until the people working from home are replaced with people working from a cheaper offshore location, then the opposite may be true...

This is an interesting field.

The problem with foreign call centres is that whenever I have to deal with them it is always a struggle to communicate by phone, but when the interaction occurs via chat it is so much better. But how many people dealing with financial matters will type information into a chat window, not knowing who might be reading it?

As things are now going it looks to me that we will soon see a shift away from humans doing any of this as they will be replaced with synthetics. Unless I am missing something, the human call centre as we have known it is doomed and will be replaced by AI synthetics.

How much home working can AI do? As I see things now, the more complicated and skilled the job is, the more AI will be far better than humans. E.g. an AI legal system can operate at a million times human speed, the AI bots putting in their case, other bots checking the submission as AI barrister fights AI barrister and other Judge bots deciding on who wins, all in the blink of an eye. Ditto for accounting type work, contracts,...

Where AI may struggle is on things which have a strong emotional content, such as in deciding what shares to buy, what to sell, deciding on consumer goods, colours, etc. Will AI be able to act as a GP? In my home town it is now very difficult to see a GP, most consultations are over Zoom, and AI may well be as good as Dr.

I doubt this can be stopped. E.g. the cost of an AI Dr. that can work 24-7 and with better performance than a human almost guarantees that the politicians will sanction synthetic Dr's.

For now robotics is lagging AI so that jobs that require manual skill will be human for a few years more, but in the by and by I expect robotics to catch up, this hasn't hit home to many but if robots begin to drive cars better than humans many will wake up to the changes and likely become Luddites and try and stop the progress, but the history of progress is that Luddites fail.

In a few years it is possible that many jobs humans do now will be gone and humans will have shifted to doing emotional type work, working with animals etc...

In principle if economic production is maintained, the human species will enter an entirely new age that we can hardly imagine, but in the by and by the warnings of Turing that machines would take over may come to pass.

We are seeing imho the beginnings of the great changes coming and it is impossible to predict what will come for more than a few years into the future. But as things now stand it looks very likely to me that the days of most of the working population going to an office are coming to an end. What might follow may be trouble, but the end to offices and commuting for many looks to me like a blessing.

Regards,

[langley59]

Yesterday this company announced the launch of a new test which distinguishes between COVID-19 and other viruses:

https://www.investegate.co.uk/novacyt-s ... 00062644X/

As well as being an investment opportunity (no recommendation made and no position held) it also appears to validate what some sceptics have been saying in that you can test positive if you have had a cold, flu or flu vaccine recently, ie. false positives.

[odysseus2000]

Working from home has saved Americans a lot of dosh:

https://thehill.com/policy/transportati ... g-pandemic

but it has crippled the New York transport authority which is seeing ridership of 25% of pre-covid levels.

Regards,

[SalvorHardin]

Working from home has saved Americans a lot of dosh:

https://thehill.com/policy/transportati ... g-pandemic

but it has crippled the New York transport authority which is seeing ridership of 25% of pre-covid levels.

IMHO New York City's problems are being replicated in London, albeit to a lesser extent. London hasn't experienced anything like the breakdown in law and order that New York has seen, but it's horribly exposed to many of the same factors which are hammering New York.

Much of New York City's economy has moved to the suburbs in New York State, Connecticut and New Jersey. I reckon that the same thing has happened to London; lots of economic activity which was concentrated in the centres of major cities is being dispersed amongst the smaller towns and cities around the UK.

Most days I check a webcam site which shows various locations in Central London. These are deserted compared to pre-lockdown. When I used to work in the West End some twenty years ago Oxford Street was packed at this time in the morning. I've just looked at the webcam covering Oxford Circus (junction of Oxford Street and Regent Street) and saw less than ten people and a couple of buses and taxis. Not what you'd expect to see at 8:40am on a Friday morning.

In contrast there's a lot of activity in towns. A few days ago I rode through Taunton (the nearest town to my village); the town centre was almost as busy as before lockdown with the only difference being queues outside a few shops and some people wearing masks. The same holds for Wellington (7 miles from Taunton).

The webcam site is linked below, it cycles between cameras, 10 seconds for each, Oxford Circus is the second camera that appears (after Marble Arch).

https://www.webcamtaxi.com/en/england/london/london-traffic.html

New York based hedge fund manager and author James Altucher recently wrote a provocative article "New York City is dead forever. Here's why". His reasoning runs as follows:

High quality broadband makes home working much easier than businesses previously thought, whilst rising crime is driving people away. This generates a vicious cycle. Without the people the things that make life in a city better go into decline (restaurants, shops, entertainment). This produces a spiral of falling demand for things in New York, falling property prices and falling income for the city authorities. New York's universities will see a massive fall in the number of students, reducing demand and thus further propelling the downward spiral.

https://www.linkedin.com/pulse/nyc-dead-forever-heres-why-james-altucher

Conclusion: bad for cities, good for towns

[Watis]

The Guardian are reporting a push from Government to get us all back to the workplace:

https://www.theguardian.com/world/live/ ... ws-updates

and:

https://www.theguardian.com/politics/20 ... oronavirus

Good luck with that.

We have seen two paradigm shifts in the last 20 years, both of which spell doom for the High Street and city centres generally.

The first is the Internet revolution and, as a result of that, online shopping.

And the second is working from home, triggered of course by the lockdown.

This will result in the loss of thousands of jobs, as is being reported daily. Those affected will need to find alternative employment, hopefully in areas of growth, wherever they may be.

It was ever thus. Consider lamplighters, whose jobs disappeared when electric street lighting was introduced. No-one laments those jobs now.

Watis

[redsturgeon]

Anecdotally I would back the thinking that we may be seeing a reversal of the move to big cities like London and New York. My son who works in the city for a major bank has not been into his office in the city since lockdown. He used to commute from Clapham every day, drink at least three or four coffees from various coffee shops on his commute and at lunch. East lunch in one of the many places around the city and work out in a local gym.

During lockdown he moved in with us, 75 miles from London and worked every day remotely, interacting with colleagues all over the world via telephone and computer, just as he had done while sitting in his office. We had set up a gym at home with all the weights and equipment he and his brother needed to continue their strength and conditioning programmes (he is a semi pro rugby player and his brother has just taken up his sports scholarship in the US). We have a professional standard coffee machine at home that he used many times everyday. He saved a lot of money during the lockdown and is now planning to quit his rented flat in Clapham at the end of his lease in October and move permanently to his home town, as have several of his friends who also work in London.

Our daughter worked in hospitality in London, she is about to be made redundant along with about 50% of her coworkers, the hotel she works at is looking at well below 50% occupancy for the rest of the year and well into 2021. She now has three jobs locally that pay her more than she used to earn in London and she is also saving over £1000 per month in travel and housing costs by living with us.

I was listening to a small business owner in the City of London talking about how we needed to get the workers back to their offices so that he can return to making money from them. I felt he was guilty of putting the cart before the horse and forgetting that his business is only there to serve the office workers not vice versa and he should perhaps start thinking about moving his business to where his customers are.

Things have changed permanently.

John

[dealtn]

We have seen two paradigm shifts in the last 20 years, both of which spell doom for the High Street and city centres generally.

The first is the Internet revolution and, as a result of that, online shopping.

And the second is working from home, triggered of course by the lockdown.

This will result in the loss of thousands of jobs, as is being reported daily. Those affected will need to find alternative employment, hopefully in areas of growth, wherever they may be.

So as a result of 1) and 2) suggests a large number of people staying indoors for longer. I don't think this is "normal" behaviour for a species such as ours which is essentially a social one.

So what will all these people be doing (and hopefully spending money on) to satisfy their natural desire to be mixing socially. It's all well and good finding the areas that spending will be down on, but I would rather find the areas with rising £s spent. I still think it likely that bars, restaurants, cinemas, gyms ... will have their day once the short term safety concerns diminish.

Any others?

[odysseus2000]

dealtn
So what will all these people be doing (and hopefully spending money on) to satisfy their natural desire to be mixing socially. It's all well and good finding the areas that spending will be down on, but I would rather find the areas with rising £s spent. I still think it likely that bars, restaurants, cinemas, gyms ... will have their day once the short term safety concerns diminish.

I used to hear similar things said about Pubs, but most of the ones in my local town have closed.

They offered very little that could not be got from the supermarkets and via the internet without any of the downsides such as getting home after drinking, high prices for microwaved food, conflict with spouse over time apart from them and children.

Moreover, the TV monopoly of presenting dumbed down rubbish has been swept aside by the Internet offering what ever you want and a way to learn about anything that interests you.

One can also easily buy gym equipment and have it at home. Obviously not as extensive as a gym, but no worries about catching anything from previous users.

I am not sure there is a path back for many of these business.

Regards,

[dealtn]

dealtn
So what will all these people be doing (and hopefully spending money on) to satisfy their natural desire to be mixing socially. It's all well and good finding the areas that spending will be down on, but I would rather find the areas with rising £s spent. I still think it likely that bars, restaurants, cinemas, gyms ... will have their day once the short term safety concerns diminish.

I used to hear similar things said about Pubs, but most of the ones in my local town have closed.

They offered very little that could not be got from the supermarkets and via the internet without any of the downsides such as getting home after drinking, high prices for microwaved food, conflict with spouse over time apart from them and children.

Moreover, the TV monopoly of presenting dumbed down rubbish has been swept aside by the Internet offering what ever you want and a way to learn about anything that interests you.

One can also easily buy gym equipment and have it at home. Obviously not as extensive as a gym, but no worries about catching anything from previous users.

I am not sure there is a path back for many of these business.

Regards,

I think you are missing the point.

Humans are social animals. You are describing behaviours that are "home-based" and not social. I am asking what socialising activities, perhaps including spending £s, will humans be doing. They will be the opportunities for making money.

Home drinking isn't the same as pub drinking.

TV is home based viewing, so is internet viewing. etc.

[dealtn]

Councils are milking this pandemic for as much as they can.

https://www.bbc.co.uk/news/uk-politics-53934725

Not sure how that claim that Government is the least affected by the pandemic is looking, or the subsequent one that Councils are milking the pandemic.

If this article is even close to being right that's a lot of change for local government.

[SalvorHardin]

So as a result of 1) and 2) suggests a large number of people staying indoors for longer. I don't think this is "normal" behaviour for a species such as ours which is essentially a social one.

So what will all these people be doing (and hopefully spending money on) to satisfy their natural desire to be mixing socially. It's all well and good finding the areas that spending will be down on, but I would rather find the areas with rising £s spent. I still think it likely that bars, restaurants, cinemas, gyms ... will have their day once the short term safety concerns diminish.

The spending and social mixing will shift location. More will be spent closer to people's homes, where they are working.

Much of the hospitality industry in cities exists primarily to serve commuters who work in these cities. Without the same level of commuting there can't be the same level of demand for these services in the cities. Instead the demand will shift closer to where the former commuters live, since that's where they are going to be spending most of their time at work. Who wants to travel an hour by train to the city to go to the gym that they used to use when they worked there?

Let's say that safety concerns vanish overnight because the coronavirus has died out or there is a 100% safe and effective cure. Will people revert to their old working habits over time? I would argue not. Employers have seen that in many cases jobs can be done as effectively from home, or almost as effectively, maybe with an occasional trip to the office. Many employees greatly prefer working mostly from home, if only to avoid the commute.

Those who prefer to work in the office may find that employers are reluctant to pay them what they used to get, since if they work from home there is no need to cover the cost of the commute (and associated costs).

Employers save money on offices (leases expire, rents decline due to oversupply of offices and shops), minus the extra costs of communication and staff supervision. They will also save on salaries, because there isn't the need to pay a premium to cover their employees' commuting costs. Meanwhile employees save on work-related costs.

This is where the suburbs, towns and smaller cities are benefiting. People who used to work in the big cities will be spending more time (and money) close where they live and much less time (and money) in the cities. Demand for goods, services and properties in these locations outside the cities will rise thanks to those people who live locally and are no longer tied to the big cities by their work.

Working from an office in a town generally doesn't involve anything like the commute of working in the City of London, in time, costs and aggravation.

A bit of blue sky thinking. It's quite possible that there will be a boom in virtual reality communications, for people who still need or like to be in the office. That allows person to person interaction without the need to travel physically. Sort of Zoom on steroids, maybe using holography.

Or something like in the Bruce Willis film "Surrogates" where rather than leave the home the vast majority of people stay at home but effectively move around outside using robotic duplicates of themselves which they control through a totally immersive system that lets you experience everything that the robot does (without the risks). This level of technology is a lot closer now than when the film was made in 2009.

https://en.wikipedia.org/wiki/Surrogates

Trailer for those who are interested
https://www.youtube.com/watch?v=KC5TrKNIDHQ

[PeterGray]

So what will all these people be doing (and hopefully spending money on) to satisfy their natural desire to be mixing socially. It's all well and good finding the areas that spending will be down on, but I would rather find the areas with rising £s spent. I still think it likely that bars, restaurants, cinemas, gyms ... will have their day once the short term safety concerns diminish.

Any others?

You're quite right. Once the need for social distancing is gone people will be getting out to socialise as before. But they may well be doing it in different ways, and different places. Perhaps more likely to be spending money around where they live than their office? Perhaps more in evenings for meals? Maybe nipping out for coffee locally in the day?

So I'd agree that we won't see a complete loss, or culling, of those sectors. But there may be shifts in the types of leisure spending, and almost certainly in the geographical locations. Many of those jobs and trades will still be there, but many smaller businesses that turn out to be in the wrong places may well go to the wall.

[redsturgeon]

dealtn
So what will all these people be doing (and hopefully spending money on) to satisfy their natural desire to be mixing socially. It's all well and good finding the areas that spending will be down on, but I would rather find the areas with rising £s spent. I still think it likely that bars, restaurants, cinemas, gyms ... will have their day once the short term safety concerns diminish.

I used to hear similar things said about Pubs, but most of the ones in my local town have closed.

They offered very little that could not be got from the supermarkets and via the internet without any of the downsides such as getting home after drinking, high prices for microwaved food, conflict with spouse over time apart from them and children.

Moreover, the TV monopoly of presenting dumbed down rubbish has been swept aside by the Internet offering what ever you want and a way to learn about anything that interests you.

One can also easily buy gym equipment and have it at home. Obviously not as extensive as a gym, but no worries about catching anything from previous users.

I am not sure there is a path back for many of these business.

Regards,

I think you are missing the point.

Humans are social animals. You are describing behaviours that are "home-based" and not social. I am asking what socialising activities, perhaps

including spending £s, will humans be doing. They will be the opportunities for making money.

Home drinking isn't the same as pub drinking.

TV is home based viewing, so is internet viewing. etc.

Humans are definitely social beings but that level of sociability lies on a spectrum, both between and within cultures.

Contrast the privacy and relatively small social circles of people like the Japanese or the Scandinavians vs the more open cultures and extended family structures of other cultures. Consider the social butterflies who were always off to some party, nightclub or social event vs those, perhaps just a many in number, who are happy to live quiet lives with one or two close friends, family member and pets.

I think what will will see is possibly not a wholesale retreat to social isolation but rather a shift towards that end of the spectrum on a global basis and that will have profound effects on the wider society. Much of this shift is enabled by the communication revolution of the past decades and was already
being promoted as an answer to the overuse of resources for unnecessary travel and working practices. The pandemic has been a catalyst for this change.

How ridiculous of ministers to be encouraging businesses and workers to go back to their warrens of cubicles in far away city centres just so that we can fill the trains and buses and coffee shops and sell more industrially prepared sandwiches. How much better to have those who can and want to work from home enabled to continue.

Save the fuel and time and resources that were being wasted on commuting and start investing in more productive things, like improving local services and amenities for people to enjoy closer to home, things like a fast broadband across the country, pleasant town centres that people can stroll or cycle to during their lunch break to eat fresh food freshly prepared locally by local businesses. This is an opportunity not to be missed.

John

[vrdiver]

You're quite right. Once the need for social distancing is gone people will be getting out to socialise as before. But they may well be doing it in different ways, and different places. Perhaps more likely to be spending money around where they live than their office? Perhaps more in evenings for meals? Maybe nipping out for coffee locally in the day?

So I'd agree that we won't see a complete loss, or culling, of those sectors. But there may be shifts in the types of leisure spending, and almost certainly in the geographical locations. Many of those jobs and trades will still be there, but many smaller businesses that turn out to be in the wrong places may well go to the wall.

A lot of the restaurants and bars rely on expenses type spending. Weekly commuters who will have either a receipt-based expense allowance or a per diem to cover subsistence whilst away from home. If this group of workers are able to telework rather than be on client site etc. then the overall hospitality sector (hotels, restaurants, bars, coffee shops) is going to shrink, no matter where it ends up at a business-by-business level.

Having worked away from home 3 or 4 days a week for over 20 years, and worked with clients who flew in to meetings on a regular basis, I do wonder what level of recovery this kind of travel will see? It's all at the high end of travel expenses and associated costs, both monetary and time, and susceptible, imho, to a serious overhaul to catch up with currently available technology for distance working.

VRD

[dealtn]

This is where the suburbs, towns and smaller cities are benefiting. People who used to work in the big cities will be spending more time (and money) close where they live and much less time (and money) in the cities. Demand for goods, services and properties in these locations outside the cities will rise thanks to those people who live locally and are no longer tied to the big cities by their work.

Yes this is my kind of "macro" thinking but its hard to identify the "winners" here, being those companies relatively un-exposed to large City and commuting areas, and those over-exposed to towns and "local" areas where many (possibly ex) commuters live.

Leisure isn't a sector I am overly familiar with, but I would think Budget Gyms so GYM or maybe Ten Pin Bowling, which leads to TEG.

Struggling to turn a macro play into something investable.

[redsturgeon]

This is where the suburbs, towns and smaller cities are benefiting. People who used to work in the big cities will be spending more time (and money) close where they live and much less time (and money) in the cities. Demand for goods, services and properties in these locations outside the cities will rise thanks to those people who live locally and are no longer tied to the big cities by their work.

Yes this is my kind of "macro" thinking but its hard to identify the "winners" here, being those companies relatively un-exposed to large City and commuting areas, and those over-exposed to towns and "local" areas where many (possibly ex) commuters live.

Leisure isn't a sector I am overly familiar with, but I would think Budget Gyms so GYM or maybe Ten Pin Bowling, which leads to TEG.

Struggling to turn a macro play into something investable.

Perhaps it is easier to spot opportunities for divestment at the moment.

John