Keep Positive… It Will Pass…
I am not going to mention the “C” word in this month’s blog. Firstly, I am not an expert and secondly, read firstly.
During one of the very early Apollo Space missions, one of the astronauts (William Anders) commented that after seeing the earth for the first time from above:
“We came all this way to explore the moon, and the most important thing is that we discovered the Earth.”
Driving home tonight looking up at the full moon, I wondered what the moon makes of us down here, these past few weeks?
As a Father, husband, business owner and employer, it would be idiotic to say these are not testing times. It also needs some rationale. It will pass. We live in a free-market economy – markets go down as well as up.
For all our economic experts, opinions, articles, tweets, Instagram shots, blogs – no one saw this coming. As of December 13th, for the first time in a generation, Britain had a government that was to serve a full 5 years – we had “stability.” The positivity flowing into the markets due to the “Boris Bounce” was enormous. In hindsight, our confidence was misplaced.
We still live in borrowed times. The national deficit of the UK is now heading towards $2trillion. USA is $24trillion. The EU is effectively bankrupt. You cannot keep printing money – at some point, the ink does run out and the market has to re-set. Since 2015, we have had 3 general elections, Trump, Brexit, major sporting events – each time there has been a delay and pause in the market. Social media is just rampant – it controls our brains. As bad as this is – how much has social media played a part in this freefall? We need to control it.
It took almost 4 years for the FTSE 100 to move from 5,200 to over 7,500 and a week to fall back! We are battered, bruised, stunned and fearful – now though is not the time to run away.
This is a war – our enemy is not a country, an army or an ideal but a virus; it kills, and we have no vaccine yet. Hopefully, as the weather improves, it will recede.
Like any war some positives will come out of it – forced office closures mean we will be spending more time with our families. As a workaholic – enjoy it. Our working practices will change – perhaps we will not need as much office space moving forward, our technology is being improved because it has to, not because we want it to. With fewer planes, pollution is less – our air will be cleaner. I hope that people really start being kind to each other. The worst thing that could happen is that we go mad and society simply disintegrates. There is too much homelessness in this world. San Francisco – the epicentre of fin tech is a disgrace. We need to look after those worse off.
To get through the short term, we will have to work harder for less. All landlords should where possible give all tenants 3-month rent-free periods – extend the leases by 3 months at the end or amortise the cost. Maybe reduce rents by an amount both parties are happy with? Do it now before you are forced to do it. It will create goodwill.
As for the market, an observation on 2 shares – Derwent London and SEGRO. Both are quality property companies. SEGRO specialise in industrial property and Derwent London specialise in Central London. Supply is low and demand high in their field. Both company’s shares have taken a battering. However, they are quality, so perhaps an opportunity.
Stay positive, keep punching, don’t let negativity surround you.
This is what it is. It will pass.