The sun has arrived and so has warmer weather. This coupled with our world opening a little has raised our household spirits. It is interesting to me how COVID-19 has brought about a new way of doing things. It has impacted every facet of both our personal and work lives. Prior to this I would work from home a few days a month, in particular when I wanted to work on something uninterrupted. However, I always preferred the office setting. Now we are working from home full-time which has led us to rethink how and when work can be done. Finding a work/life balance can be complex. Prior to COVID-19 we ate out quite a bit and now we are almost exclusively cooking at home. I have even started baking again; something our children are enjoying but Kieron and I's waistline not so much. Yes I am one of those people who have started to bake bread, it was something I had always wanted to try but never seemed to have the time - below is my first attempt.
Our family has also changed the way we shop. We only go to the grocery store once a week (in the early morning) and everything else is ordered online and delivered to our home. We are definitely dressing more casual with working at home and spending quite a bit more time outside than we had previously. We don't have any plans to travel in the next 12 months or venture far from home. I wonder which of these new changes will be permanent, and what new habits will we quickly shed as the economy opens up?
I don't think this global pandemic will erase our natural instinct to explore, discover and create. We are still finding ways to continue to do this at home and digitally by visiting museums, art galleries or cities online. Even sporting events are trying to adapt. Formula 1 car racing even moved their grand prix series online! Canadian photographer Edward Burtynsky and gaming executive Vikas Gupta have been pushing the boundaries of art through the use of augmented reality, virtual reality and photogrammetry. They have joined the RBC Disruptors podcast to talk about how we can use augmented reality to see and experience the world like never before: How is "Photography 3.0" Helping Us Experience the World in a Post COVID Society?
Market and Economic Update
The changes due to COVID-19 have had implications to businesses and our economy. Will this lead to modification of behaviour or will we see major transformations on how we live, spend and work? At a minimum this crisis is appearing to speed up the digital transformation that had already been underway. Facebook announced this week that it would now allow many employees to work permanently from home. What does this mean for cities, real estate, and businesses?
Not only are we spending less but we are spending differently. We (obviously) bank with RBC and on our online banking application they have a service called NOMI Insights that tracks your expenses. Last month our discretionary spending was down 40%, likely due to not eating out. RBC Economics has examined consumer spending of both personal and small businesses in Canada and are seeing some signs of stabilization. To read more see our COVID Consumer Spending Tracker. Monitoring spending and consumer sentiment is important to be able to understand what parts of the economy could flourish in this environment and what parts of the economy might be cause for concern. McKinsey & Company has analyzed how we are feeling about spending and where we are allocating our spending dollars. For more details see Consumer sentiment evolves as the next "normal" approaches.
John Stackhouse does a great job summarizing the potential trends (and investment opportunities) that could result from this shift in 8 Ways COVID Will Transform the Economy and Disrupt Every Business.
From a stock selection perspective we have seen some winners and losers during the COVID-19 pandemic. The travel sector has been hurt and some of these companies (like the ones in the cruise industry) may struggle to recover. The technology sector has been able to weather the pandemic fairly well with some companies flourishing. Our top ranked Internet analyst, Mark Mahaney, in this podcast, is Checking in on Internent trends with Mark Mahaney. We have been spending considerable time thinking about the companies we own or want to own - are they been able to adapt their business models or even better are they positioned to take advantage of this new environment.
Last week, officials at the World Health Organization warned that COVID-19 may never go away. The virus may continue to exist in our communities for years while the global population builds natural immunity to it over time. I think many of us are having a hard time thinking about adapting our behaviour for years instead of months. Earlier this week, a US company provided encouraging results from a Phase 1 vaccine trial. This vaccine showed potential for the immune system to produce antibodies that could protect people in a safe way. This news spurred an impressive rally in the market as the odds of a best case scenario increased. However, we need to consider that this was a very small sample of only 45 individuals and there was a considerable lack of disclosure and data for analysis from the company. There are 10 human trials and more than 100 pre-clinical trials underway globally. We are still in the early days but this market movement shows that we are all hoping for a quick resolution.
In the spirit of learning new ways to do things, last week I added a poll about wearing masks to our blog and promised to share the results. However, being new to this something went wrong and the poll did not remain on our site so the only result I can share is my own - which is I will be wearing a mask when I cannot social distance, however, the debate still continues in our house. I will continue to work on upskilling in this area and will attempt a poll in a future blog.
I have been posting a picture each week of a member of Hayes Vickers Private Wealth in their home office. When we started to work from home the hope was we would be back in the office before we ran out of team members. We are still at home, with no immediate plans to return to the office and I have run out of team members to post pictures of. Below is a picture of Karen, the lone member of our team who is holding down the fort in the office.
Enjoy the warmer weather and have a great weekend.