After what has turned out to be one of the most disruptive years in the last decade or two, most companies are slowing down in anticipation of a well-deserved rest. JWR will be doing the same. This is the last blog for this year, so let us take stock of where we are right now and who have been the winners and losers as the dust settles on 2020 in the rearview mirror.
The biggest losers must be the people who have felt the most direct impact of Covid-19; namely those who have lost loved ones and those who have lost their jobs and livelihoods. And of course the latter’s families.
This year has taught us once again that every action has a reaction, often uncalculated. You go into hard lockdown to protect people from a virus, but you still lose lives because of the collapse of the economy. In our 9th March blog we wrote that we believed in the ingenuity of humanity and that we would recover from the virus must faster than the media was predicting at that time. We said, “We believe this disaster is no different and the coronavirus will not kill all the productive people in the world. We believe the ‘doomsday experts’ are overanalysing the issue and underestimating medical researchers’ proven ability to develop a vaccine.”
As of today, SA shares are positive for the year and US shares are doing very well. The rand has recovered against most currencies and there is a positive momentum to our economy.
Looking towards 2021, we shall see a rotation from a Trump presidency to a Biden presidency and everything that goes with that. We shall see a virus lockdown scenario change into a vaccine roll-out scenario and everything that will entail. We shall see the ANC’s true colours in their fight against corruption and the prosecution of Ace, Zuma and all the others. We may even see a continued recovery in South African shares and our currency.
What we do worry about, however, are the insane valuations placed on some new listings in the US market such as Airbnb and Doordash. We may see some of these companies and their wild-eyed shareholders come crashing down like WeWork did. This will dent investor confidence and a domino effect may ensue.
We also worry about the high debt levels of governments, especially in South Africa, and how this will be addressed. Unemployment; the resulting increase in the levels of crime; and government’s battle with the unions about the decrease in the public sector wage bill, will keep local investments on their toes.
Except for the names of the players, the plot will remain the same in 2021. We shall still see good things happening, as well as bad things. We shall still be surprised by stuff we have not expected; and disappointed by things we have counted on. But, as always, we will remain positive.
Merry Christmas and a Happy New Year!