Though I Still Can See and Hear

The certainty of the moment is that we are all experiencing something unprecedented in public health, safety and the global economy.  That includes the great influenza pandemic of 100 years ago.

The biggest current uncertainty is when and how to relax the mitigation rules, intended to prevent spikes of infections, to be able to rush to revive the almost dormant economy.

Some among our population, gathering — even now, too closely — at state capitols and public beaches, seem either unaware of the risks of reopening too soon OR simply do not care about the likelihood of deaths among people they do not know.

Trump seems to be inciting those people for his own political reasons though, based on recent polls, most Americans are disinclined to follow.

What I ‘see and hear’ from my own, so far snug, roost in DC is that the scientists and doctors have hit it dead on: We can’t (shouldn’t) open the economy to recover until there is widespread testing available.

I also see an economy that has virtually been shut down. 22 million people unemployed; people holed up at home, spending mainly through Amazon and local food markets; virtually no travel; no restaurants, movie theaters, sports events and all the other things Americans thrive on.

Many millions of people, despite enormous financial support from the Treasury, are at risk of being unable to feed or house themselves, and it appears to be getting worse by the week.

The sounds everywhere are of confusion, uncertainty and even fantasy.

Among the most fantastical are the simplistic expectations that ‘when the wheel turns’ things will easily bounce back to normal very quickly.

This is where the value of simply seeing and hearing appears to evaporate.

The world is changing radically under our noses and trying to be a ‘seer’ becomes essential for survival in the new world that follows.

Many things may never be the same as they were.

In business, supply chains will look very different and office space is likely to shrink; parts of the education process may move permanently online; much travel previously deemed essential will become much less so; and telemedicine will replace some portion of previous in-person visits – even over the objections of a public that has been otherwise slow to embrace that concept.

I could go on and on—but use your own imagination. Whatever your list looks like, the consequence of the inevitable changes ahead is that a quick and easy V-shaped economic recovery is wildly optimistic.

Instead, we are looking at an extended period of economic lethargy like the 1930s as changes, and the people they impact, sort out how that new world works.

It is simply too soon to know anything for sure.

And, lastly from the point of view of managing investable assets, what Warren Buffett and Charlie Munger warn about, and foresee, is an extended period of economic and financial uncertainty – months certainly, years probably –during which liquidity and flexibility will be the cornerstones of a successful passage into the new world.

They publicly recommend NOT playing in the current game.

I agree completely!