We say farewell to Feb and entered into Mar this week. Two months into 2021 and many exciting things have already happened. 06 Jan Capitol riots, Myanmar military coup and Biden’s first 30+ days of presidency had passed.
While there is more optimism built into the pandemic front, chaos seems to reign everywhere as countries scramble to acquire vaccine supplies and roll out their vaccination programs. The pace is accelerating day by day and America is on track to have enough for the whole population by the end of May. S’pore should be rolling it out more aggressively this month too.
The orange one had been silenced by most social media since leaving office while his most fervent supporters are getting investigated or arrested as the 06 Jan riot post mortem discussion widens. Some die-hard fans in GOP are still trying to latch on to his diminishing coat tail in hopes of trying to stay in office.
For the wider GOP gang like Mitch and Mitt, it looks like they are trying to buy time. The calculated guess is that the tsunami of lawsuits that will hit him like a ton of bricks in the coming months will automatically disqualify him to run in 2024. His Pandora box of tax returns had just been opened. The trail from the 06 Jan riots is likely to lead to him as the investigations widen when they do a 9/11 like hearing on this assault to Democracy.
The main survival trick for the orange one will be to stay relevant and shout as loud as possible to maintain GOP support even as many are leaving the party. What remains is the hardcore conspiracy-driven voters. He will scream that everyone is out to get him to prevent him from running again, even as more evidence is discovered of how corrupt he is, which implicates him. I would not be really surprised if he ends up in jail. He is already holding the record of being the only American president that had been impeached twice.
The GOP needs him to fade away first before the conservative right can take back control again. The gamble is that it might be too late by then as the membership could have shrunk too much already. They are already unrecognizable now versus the ideals they stand for just 10 years ago. Perhaps there is still hope as history shows. The Democrats were a pretty racist group in the 1960s who were for racial segregation then. Today, they are a very different team.
In the stock markets, the rotation to old-economy stock had started as the view that the pandemic is ending is taking hold. The timeline for full herd immunity is shortening as more vaccines come into production and supplies have been ramped up. There is hope that we might return to normal by summer now. The Fed is also holding steady for now. Bond yield has shot up dramatically in the last one month with US 30 years jumping more than 50 bps from 1.80% to 2.30%. This is a big move in such a short time and it had caused a drop in the stock markets as tech stocks are sold.
Fund managers are rushing to rebalance their portfolio by cashing out of their highly valued tech portfolio into more traditional cyclical businesses. The assumption is that things will go back to normal post-2019 very soon. I think this thinking is premature and wrong.
The virus has permanently changed everything we had done previously. The New Normal is here to stay. Technology like Zoom and QR codes now question the old way of doing things. We can be more efficient and productive without going to the office. Business travel is simply a waste of time, no? After a year of getting used to the new way of doing things, I do not think it is possible to go back to the Old Normal anymore.
Businesses that refuse or are too slow to recognize that will be left behind. The ones that embrace it will flourish. That is why I believe that there will be a K recovery instead. There will be a lot of companies that are walking zombies who are praying for more pandemic subsidies to tide through the year who will eventually collapse anyway. We just need to differentiate between these two groups and invest accordingly.
Personally, I have been buying on dips whenever there is a market correction to get the stocks I like and to adjust my portfolio. I see Zoom still doing well as they have a first-mover advantage and my current Skillsfuture course uses it extensively. I have been also doing research on dropshipping and always see the same name popping up. Shopify, a Canadian firm, is at the centre of this “create your own online store without holding inventory” phenomenon and this new way of doing business will continue to grow in the New Economy. Stocks that embrace renewable energy like FuelCell, Bloom and PLUG for battery technology is interesting too.
I joined the new exclusive app Clubhouse a few weeks ago, thanks to a friend. I have been trying to figure out this new fire-side chat room activity and why it was taking off. It finally hit me today when I was notified of a chat where the singer Will.I.Am was participating in. It was about marrying music and science to make things more interesting and fun for everyone to participate in. I was at the gym and decided to stay in the full 60 minutes call as I found it very interesting. Maybe this is what it is all about. To be able to have a personal and intimate listen-in to a conversation (max 5k limit) of someone you admire. More food for thought in the coming weeks.
Leave a Reply