Vaccine Time

By now we are all celebrating the news that a vaccine for Covid has proven to be 90% effective. The reaction on the markets was almost immediate with all the companies that lagged during the year bouncing back and all the technology companies slumping. This rotation reversed to some extent when people realized that it will take a while before the availability and impact of the vaccine on our daily lives materialize.

The second memorable event last week was when the President announced that alcohol sales will return to normal and that all international travelers are welcome again. But the good news did not stop there. A warrant of arrest was issued for Ace Magashule.

Unfortunately, the reality of the economic impact of the hard lockdown is starting to filter through, with an additional 2,2 million people unemployed. The rand jumped back to above R15,50 to the dollar and the oil price rose to above $40 per barrel. We are seeing the number of Covid cases increasing in certain areas of South Africa, which might impact the upcoming festive season, but hopefully our government will not overreact again.

An almost unanimous sentiment worldwide is that 2020 is a lost year and should just be written off so that we can move on to 2021. I do not share this sentiment. I believe we should pause to understand how governments and humanity deal with events that impact us all in order to better prepare for the next one, not only on a personal level, but also on the way we manage our investments.

It has become clear that the importance of  technology companies is far greater than that of, for example, property companies in our lives at the moment. Perhaps we will see the dominance of the US economy faltering over the next decade and China taking its place; or the US$ being replaced by a digital currency as the preferred way to conduct trade. These changes will have a massive impact on our lives and especially our investments and we have to be proactive as far as these paradigm-shifting events are concerned.

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