Good afternoon,
The WMR told you so. In a close to home example of the economic damage caused by the lockdown, the boutique clothing store where my daughter has worked for the past year or so has decided not to reopen. That’s a perfect example of a small business that chooses not to continue. Sure my 17 y/o lost her part time job, but more importantly, the owners of the boutique lost their livelihood after 15 years. And they won’t be alone. I fear that many more small businesses will have the same fate. Their life work gone through no fault of their own. That’s sad. Many restaurants will have the same unfortunate fate.
“But Mike, we HAD to lock down, otherwise the virus would have killed hundreds of thousands more people.”
Hmmm. Is that really true?
“But Mike, you’re making an ‘economy v. lives’ argument. Lives are far more valuable than your economy.”
Of course they are, but my contention is that voluntarily ruining the economy will be far more damaging and ultimately cause more death and damaged lives than the virus did. As I examined evidence to support this view, I found this article from the LA Times, which is not known for conservatism by any means, https://www.latimes.com/world-nation/story/2020-05-11/more-than-a-billion-people-escaped-poverty-in-the-last-20-years-the-coronavirus-could-erase-those-gains
The coronavirus itself wouldn’t have put a billion people back in poverty, but a jumbled economic policy to fight it might have. And not just in the US, but internationally as well. I’m not saying that anyone has to agree with this point of view, I’m just saying that I don’t think our leaders considered it appropriately. They made colossal decisions based on questionable data and refused to reconsider those decisions even as the data evolved. And having the government try to mitigate it by subsidizing people for a few hundred, or even few thousand dollars, is only a band aid.
“Ok Mike, get off your soapbox.”
Right. We control what we can and deal with everything else as best as possible.
So all that being said, hopefully this self induced recession will be a short one. It’ll be deep, we still don’t know how deep. That will become clearer in the next few months. But like I’ve mentioned for more than a month now, green shoots of activity continue to sprout, big businesses stayed open and some small businesses are reopening and people are getting back to work and that’s all good. Absent another shutdown or other government interference, the rest of this year and certainly into 2021 can’t possibly be as bad as Q2 of 2020.
In related news, national gym chain 24 Hour Fitness has filed for bankruptcy. https://www.bloombergquint.com/onweb/24-hour-fitness-files-bankruptcy-amid-onslaught-of-gym-closures
The CEO states in the article ”that if it were not for COVID19, we would not need to file.” That’s too bad, but unfortunately I think we’re going to see a lot more news like this in the next few months. And then you’ll get the domino effect for the landlords that have/had leases with firms like 24 Hour Fitness or any of the other thousands of restaurants and shops that won’t reopen. Eventually, the spaces will be filled by another business, but that will take years. That will certainly impact retail real estate, at least for a while. And then you’ll see some weakness in the commercial real estate market, office space specifically. We’ve all proven that we can work from home so why do we still need big office spaces? Conference calls, Zoom calls, FaceTime, eSignatures, etc. have negated much of the need for office space. And if we do want to meet in person, we can do so while social distancing at a coffee shop or restaurant. And yes, the WMR still does house calls, with or without a mask, at the client’s discretion. I have not yet been back to a restaurant, but friends who have say that they seem about normal, although less crowded.
Speaking of gyms, is this really necessary? A gym owner in Massachusetts wants to reopen and in an effort to enforce his continued closure, the local town cut off his power and water.
https://www.charlotteobserver.com/news/coronavirus/article243630952.html
The guy is trying to make a living and service his clients, who are fully aware of his status and agree to it, and the town is shutting him down. This shouldn’t happen in America. IMO. The guy is a criminal because he’s trying to open his business? That’s shameful.
Back to a previous WMR theme, no one seems to be talking about how NOT to get sick in the first place. We are told that if we wash our hands, wear a mask and stay home, we’ll be safe. Of course that’s not exactly realistic so let’s talk about how to stay healthy in the first case. It’s fairly simple, but not always easy. Eat healthy foods, do moderate exercise, don’t smoke, drink alcohol sparingly and get your supplements, especially vitamin C and vitamin D. Oh yeah, and wash your hands as necessary. Do those things and your immune system will be strong and will fight off most infectious attacks. Like any good athlete, your immune system needs practice. Good practice makes a player better at game time. If you don’t let your immune system practice fighting off day to day invasions, it won’t be prepared when a bigger one comes along. I’m not saying don’t be practical, I’m not saying to be unaware or unconcerned about possible threats and I’m not saying that if you’re at higher risk, then you shouldn’t be more careful. I am saying that hiding in your house with a bottle of hand sanitizer and waiting for all bad things to pass won’t make you better or stronger. This is a brief article about how your diet can improve your immune system.
https://www.henryford.com/blog/2020/05/boosting-your-immune-system-with-food
Why aren’t more people talking about this? A little preventative maintenance can go a long way. As mentioned in previous WMRs, there are various resources available for free, podcasts, books, white papers, etc. on the topic. Ask me individually for some suggestions and I’m happy to help.
Similarly, you can improve the strength of your investments so that when the markets sneeze, your portfolio won’t get sick. We can analyze the current strength of your holdings, how they might react to volatility and how that reaction could affect your longer term retirement plans. As above, there are various resources available that can assist with that analysis, podcasts, books, calculators, etc. Ask me individually for some suggestions and I’m happy to help.
Let’s finish this week with something that might be helpful. It is well known that I’m a podcast enthusiast, (I’m also a Porsche enthusiast, which we can delve into another time) and fortunately, or unfortunately, there are millions of podcasts to choose from. There are several podcasters which I really like and listen to regularly and there are some that I couldn’t make it through a single episode. Here is one that I’ve known about for a while and found a couple of very good episodes. His name is Jordan Harbinger and here is his site, https://www.jordanharbinger.com/
This is a recent episode with a security expert who once worked for Oprah and Jeff Bezos. Without spoiling the entire episode, there is a great discussion about listening to your intuition. If you find yourself in a situation where you get that “something is not quite right” feeling for some reason, you need to listen to it. Don’t minimize it and don’t rationalize it away. Get yourself out of that situation and/or away from that person as quickly as possible. If someone or some thing gives you the creeps, there’s a reason for it and you need to pay attention. I’ve passed this along to my kids. Good life advice.
https://www.jordanharbinger.com/329-gavin-de-becker-the-gift-of-fear-part-one/
LF26 – “Don’t neglect life by worrying about death.” – Bruce Lee
Have a great week and stay healthy.
The opinions expressed are those of Michael Acho and not necessarily those of Lincoln Financial Advisors Corp. CRN-3133312-061920
Michael J. Acho, MBA, CFP®
Private Wealth Advisor
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