Is it V-shape, U-shape, W-shape, L-shape… Greek letter perhaps?
It’s a concept, rather than a letter. It’s not linear, it will be quantum. And what I mean by that is nobody in the economy is ever affected on average. The economy doesn’t recover on average either. What I see is a splitting. One group of people who are massive beneficiaries of the fact that we have done a decades worth of work towards digitization in a matter of months if not weeks. And massive gains from that are going to fall to a certain part of the economy and group of companies and individuals which will be monumental. And there will also be people and businesses on the other end of the spectrum that are not going to recover ever. Different segments of the economy are doing different things in response to different drivers. There are whole sectors which won’t exist in the same way that they used to. You can have incredible investment opportunity in the recovery and disastrous loss all at the same time. the world will certainly look different.
Global Supply chains have changed. People’s businesses are shifting and re-tooling. How can we possibly restore the ability to recover? Well, humans are adaptable and this world will shift into a new equilibrium. If you look back in history, let’s use this example after the World War II, when we suddenly needed a lot of aircraft, we assigned everyone who was available, which at that time were women. They were put on the assemblies to create aircraft. Look at the progress of where women are now.
When the tech bubble burst, to some people that was over, and yet the tech industry was just beginning. The concept of innovation and technology was just starting to accelerate. I think this is a similar step-change environment. The world will create what it needs. More than capable, and we should all be inspired by that. There will be an extraordinary entrepreneurial energy. Also people’s minds have shifted. Lots of time at home to think, lots of gratefulness to survive, will rejoice people’s spirit.
But there will be a lot of damage that we will need to deal with from this crisis and we need to stay alert. This is a fragile world now. More locally produced products and food. Prices will likely go up, taxes and regulations may possibly go up. These are inflationary secular trends. And so the investment world will be changing as well.
Get in touch with me so I can help you navigate as this will impact you personally and your family.
Elena LPris
Expat Advisory - deVere