Firstly, I hope you are all well and keeping safe.
There is much pain and suffering in the world today, exacerbated by Covid-19. Whilst it continues to plague the world, there is sunshine behind the clouds — we just have to persevere for the clouds to pass as they always do!
I am writing this blog today to share some of that sunshine with you all.
More and more of the World is opening back up, especially the US and Europe at this stage given the higher percentage of their population getting vaccinated and achieving ‘herd immunity’ to Covid-19.
The Tokyo Olympics is happening, and human endeavour and achievement is in full display —plus it provides compelling viewing on TV and a reprieve from the usual mundane programming!
Equity markets globally have produced some stellar results and the view still remains positive for a couple more years to come. Over 91% of companies in the US have beat analysts’ expectations on the returns for this quarter so far. Off course, as I have been telling all of you during our progress meetings, we are expecting a pull-back at some stage and perhaps even multiple of them over the coming years. However, GDP growth is expected to continue as the supply chain disruptions ease and the pent-up demand for goods and services creates opportunities for growth over the ensuing two or three years. This also provides a positive backdrop for equity markets at least for the next couple of years.
The demand in Australia, and I suspect mirrored in other countries, for luxury goods is so high that second-hand luxury cars are selling for more than new ones. I have had two clients now who have been offered a higher price for their luxury European car than what they paid two years ago from the dealer who sold them the car in the first place! This is because the wait for a new car, due to lack of supply of parts and computer chips required for production, is between 6 to 8 months now in Australia. Once this reverts to norm, we will see strong demand for a couple of years still, due to the supply gaps.
And yes, I can hear the dissension that comes through resoundingly in my conscience that the third world is in dire straits whilst my comments above have been focussed on the wealthy nations and, in fact, the wealthy who are benefiting from capital appreciation. Unfortunately, the poorer nations have been suffering with not much government aid like we have in Australia and certainly no medical safety net or access that is so widely required. However, some of the mega wealthy benefactors as well as some of the first world countries, including Australia, have promised and supplied some of these countries with funding for, as well as the supply of, vaccines. AstraZeneca is also supplying the vaccines at cost to the developing world.
Covid-19 has certainly brought what has been a divided world together in its fight against this common enemy in the sharing of knowledge to produce effective vaccines against this disease. This sharing of knowledge and new technology may result in cures for other diseases in time, I hope.
The attention on this disease and the impact on third world countries has also highlighted the ever-increasing need for those with the knowledge and means, mainly the developed nations and its wealthy residents, to have a more cohesive approach and resolve towards helping their fellow human. This, in time when the border restrictions lift, will increase support to the third world with regards to charity and will drive movement of human capital towards those in need. We were already seeing more and more of our younger doctors, engineers, medical professionals, etc., spending time abroad in offering their time and resources to help the needy even before this pandemic. I think this will continue to increase post Covid-19.
Finally, there are positives of being isolated on an island and not having the liberty to travel. Most of us have spent a lot more time with family and friends and enhanced our social networks. Our pets have had us closer than ever before and received tremendous attention. Most of us, hopefully, have also managed to increase our savings during this time due to lack of travel and expense on holidays. I know my family has managed to travel to parts of Australia we never would have, had we not been limited in our travel options, and we have been the richer for this experience!
I leave this banter with a couple of quotes that, I hope, will give you the sunshine you should have in your lives-always!
“In the hour of adversity, be not without hope; for crystal rain falls from black clouds.” – Nizam
“While we may not be able to control all that happens to us, we can control what happens inside us.” – Benjamin Franklin
Stay safe and stay well!