In the midst of the current crisis, we can get ahead of ourselves thinking about the long term.
Now is a time to largely focus on the here and now as we look to mitigate the worst case scenarios. My heart goes out to everybody who is suffering.
As an investor, I must keep an eye towards the longer term. A few tenets that I want to share with my readers that may provide comfort in the present or further clarity about the future:
1) This is a healthcare crisis that has caused a financial crisis in parts of the economy.
2) This healthcare crisis will end in the near-ish future. At that point people will get back to work and shopping largely as they used to.
3) Some industries / professions are being hit harder than others.
4) Companies that have managed their risks / exposures / mitigation tactics more effectively are doing better now than those that have not.
5) Many of the businesses struggling now were not financially sound or had weak business models. This downturn is a reality check. As the great Warren Buffet once said, only when the tide goes out do you discover who has been swimming naked.
6) Exposing weak business models makes room for better ones. Capital and attention can redirect to the places where they’re most productive. That will strengthen the foundation of the economy in the long term.
7) New ways of doing business could be much better for many of us in the long run- e.g. more remote working
8) Business leaders that can think clear-eyed about the future can start strategically preparing for what comes next, and will be best positioned to take advantage of the many opportunities.
I’m optimistic that, just as destructive wildfires also make room for new growth of healthy forests, our economy will sprout fresh new life.