Looking beyond the next four weeks

I looked yesterday at the short term and the exponentially increasing impact of COVID 19. The central message: Do not get sick

We are locked down. Processes in place. Emergency plans to be drilled. Nothing to do, but weather the storm bearing down on us

So let us work through what this may mean longer term. Even if it might appear, right now, that it is the End of Days.

This from the Chief Investment Officer of a major Swiss Bank, emailed out to clients yesterday:

Finding opportunities amid policy stimulus.

It has taken just days for central banks to implement their entire playbook used during the global financial crisis, with the latest move the Federal Reserve’s announcement of unlimited quantitative easing. Fiscal policymakers are ramping up their response too, with programs announced so far worth around 15% of GDP in the UK, Germany, and France, and 10% of GDP in the US. We believe these measures, and policymakers’ willingness to do more, will help us avoid a global financial crisis-style credit crunch. They also provide reason to stay invested. With such large stimulus, the rebound, when it comes, could be sharp. We advocate staying invested, diversifying, and rebalancing either outright, or through the use of options strategies for investors who can (by writing puts to buy on dips, and buying calls to retain upside exposure). For those who are cautious about entering the market, averaging in could be a suitable strategy too. Meanwhile, with rates set to stay ultra-low for longer, this also looks to be a good time to find strategies which boost portfolio yields, including high-dividend paying stocks, as well as emerging market sovereign bonds and US high yield credit.

Takeaway: Policymakers have started to take action, and we believe they will prove successful in driving a recovery in markets once there are more signs of virus containment.

Life will never be the same after this. The economic whirlwind will sweep away existing organisations whilst creating opportunities in other areas.

Here are my thoughts as to the impact of this Seismic event

  • Family comes first Elderly relatives in care homes? No, times 100. Move back to the family unit. The idea of a Citadel that family revolves around, but at the first sign of a threat…can retreat within…or in the case of COVID 19 …young, fit and healthy members…leave to forage outside!

  • Family supply chain Food, water, power…as far as possible go off the grid. Establish local food supplies on a long term contractual basis. Maximise Solar, Wind, Thermal resources on your property. Get your divining rod out!

  • Health With the NHS being overwhelmed due to COVID 19, innovative digital tools will be developed which help the customer off load the NHS as much as possible and by so doing… help themselves

  • Work Freelance, Self Employed, Gig worker… will increase. Job security is proven again to be a myth. Tech will allow multiple clients to be served and reduce chance of total revenue loss. Perm PAYE workers will “side hustle” such they can go freelance.

  • Leisure Fancy a cruise on a 3000 person disease incubator? Want to fly thousands of miles from your Citadel? I think we will be cycling the lanes of our local area for years to come.

  • Government Will have an impact, but over time the establishment Donkeys have proven remarkably resilient in staying in charge of the Lions. Data will expose them to scrutiny, but I suspect it will all be blamed on a golden haired two year old in a mans body and the next new shiny Donkey will be rolled out…with a name no-one can spell.

About the IDD
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