“Don’t make predictions, especially about the future” is advice from Samuel Goldwyn. Investors have no choice, some assumptions about the future must be made. After all, making an investment today for benefits in the future is the definition of investing. So, recognizing the lack of reliability in the process, some intelligent predictions can be made. One that has been evident from past crises is that trends in place before get accelerated. Also, Darwinism rules, the strong get stronger and the weak dwindle away.
Here are a few trends that we believe will become even more prominent, in no particular order:
- On-line commerce, already important will become even more so.
- Retailers and space will contract even faster. This sector has long been over-stored.
- Manufacturing and supply chains will become more diversified with many facilities returned closer to their home countries.
- Globalization has peaked and disengagement will be the new trend. Nationalism rises.
- Critical industries will get public support during the crisis.
- More conservative finances, both personal and commercial will get a boost, at least for a while. This may well reduce certain types of “good times” purchases.
- Working remotely gets a big boost with many companies adopting more flexible approaches. Needed office space may shrink.
There are more, but you get the line of thinking. The Bull and his partners are constantly evaluating portfolios to best optimize on the foreseeable trends. This pandemic crisis will gradually go away, we want to benefit from investing in the best sectors and in the best companies for this future. Stay steady, my friends.
The Lonely Bull