'Sell in May and Go Away,' the ancient stock market lore could well be sage advice and possibly heeded by many this year. The latest Biden Capital gains tax proposals could be the catalyst for such action before becoming a reality in law.
Global markets continue to seemingly defy gravity, precisely because US economic metrics forecast more robust economic growth in the second half of 2021.
As the availability and choice of vaccines bring an end to lockdowns closer, consumer debt has dropped as savings have risen, and even more fiscal and monetary stimulus is probable in the USA and elsewhere.
The present market euphoria may not be entirely misplaced, but how much of this post-Covid world is already factored into already demanding valuations?
A contrarian view to the one above could explain why Covid, an unexpected and unwelcome curve in our lives, especially for small business enterprises and the hospitality sector, could, in fact, be the harbinger of better times.
To illustrate, if you’re driving, you need to slow down before reaching a sharp curve, or else you may meet an untimely end. But if you want to maintain momentum, the time to start accelerating is when you’re at the apex of the turn. The moment of 'turn' in the road represents the opportunity. If you feel confident about business post-vaccine, now is the time to start carefully stepping on the accelerator.
In many ways, Covid dramatically advanced the future that technology companies have been constructing for decades. Habits, conventions, and routines that could have taken many years to encourage and change were reformulated in weeks or months.
Enduring companies are built around long-term trends and behaviors, and no one can say for sure what the future holds.
Our advice remains deliberate and measured, but don’t be afraid to dream and be optimistic about where the world is going. This enables us to focus on long-term aspirations while navigating the next few years
Hard decisions were made during the pandemic that many came to realize how nimble and efficient a company can become by zero-based budgeting, disciplined recruiting, and more cost-effective ways to reach customers by resetting marketing spend.
During the pandemic, operating results from many industries that departed from pre-Covid board-approved plans surprised on the upside. The new emergency scenario plans reflected the high degree of uncertainty everyone faced over a year ago.
There was vast inconsistency in the ways countries and communities dealt with lockdowns, quarantines, testing, and vaccinations. Industries, economies, and financial markets have shown correspondingly wide variances. As the pandemic begins to pass, uncertainty will naturally continue to linger. Nonetheless, the best practice of planning that helped navigate the pandemic will better prepare to take advantage of the opportunities ahead.
Understanding when to change gear in fluctuating conditions will be important moving forward.
There will be just as many surprises coming out of the pandemic as there have been going in. Focusing on input metrics reflects how core business is performing. Continuing to innovate on behalf of customers and consumers systematically builds advantages for better business operations.
Stimulus spending and monetary policy have massively helped create buoyancy in public and private markets, so fundraising is now possible at relatively desirable rates. Enduring companies focus on the things that matter and build value for their customers, communities, employees, and shareholders.
The mentor of Warren Buffet, economist Benjamin Graham said, “in the short run, the market is a voting machine, but in the long run, it is a weighing machine.”
Remote work has proven to have many benefits. However, for some, the line between work and personal life has dissolved, and it’s taking a toll on mental health. Employees are burning out and feeling isolated after a year at home. Parents are frustrated that their children are missing in-person education. We’re seeing a difference between how business metrics are performing and how many people in those companies are feeling.
Strong leadership that puts people first will continue to be critical.
Change also brings opportunity, and constraint breeds creativity. We have seen it in the pandemic as companies have adapted business operations, launched new products and founded new businesses to meet evolving needs. Technology is flattening the world and bringing us together in new ways. Remote work has already begun expanding geographic hiring opportunities, combating bias and broadening entrepreneurship.
We see many green shoots as we enter a post-vaccine world but also a world now, post-Trump, turbocharged to address climate change and the Green Environment with all its immense possibilities and opportunities.