I'm no futurist, and don't have a crystal ball. But I am still willing to put in writing some things that I think will happen with this crazy world.
- In my last post, I predicted that the stock market would be lower by Dec 31, 2020. I still believe that.
- Some travel industry businesses (hotels, casinos, and airlines) will be given billions of dollars in loans to stay in business at least until the end of the year. Banks and car companies will also be lent billions through the government buying their bonds. $10 Trillion added to the Fed's balance sheet. The risk of these businesses going bankrupt this year is low.
- This does not cover the cruise industry, which does not pay taxes to any country. At least one of those will be in some crisis close to bankruptcy.
- Countries will be slow to open their borders, therefore international travel will be very difficult in 2020. Vacation in your own country.
- Flare-ups will continue to happen in the US, China, and Europe. Authorities will be forced to “lockdown” regions of the world but only on a limited scale. No more country-wide lockdowns.
- Many companies will realize that work-from-home is cheaper for them. There will be a push for a 50-50 work from home, work from the office workforce. Not sure how this is measured, but I am willing to bet that work-from-home is a permanent option.
- As a result, there will be too much office and commercial real estate. Companies will shrink from several floors of a downtown tower to half as many. It will take years for office real estate to recover.
- As a result, downtown is in trouble. So many restaurants and bars exist to serve office workers. Coffee shops and little lunch places. Either prices of those places have to go up, or there will be fewer of those. What to do when nobody needs to go downtown anymore?
- But hey, less commuting means less traffic and less pollution. Less need to purchase a new car, less need to purchase new clothes. Less incentive to take the bus. Lots of ripple effects here.
- Ad-supported businesses like TV networks are in trouble. Ad agencies are in trouble. Companies are going to pull back on ad spend while they try to figure things out.
There's so much going on. It's hard to peer into the future and see where things are headed. It seems like every day, there are multiple significant pieces of news that change everything.
I didn't even get a chance to predict AirBnb and WeWork shrinking to fraction of their former size.
But I'm willing to put the above in writing. I'll check back on Dec 31, 2020, to see how close I was on these. Seems like a lot of them are sure things.
Now what can I do to profit off this? Ha ha, well that's another thing entirely. Not sure I can do much. I'll just keep doing what I am doing.