In today’s Exponential Investor…
- Heart-breaking taxis
- Sinking beneath the water line
- From crisis comes opportunity
Last week, on Friday, I jumped on a train to head into London for work.
That’s right, during lockdown I left the house to do something with other people (that aren’t my wife or son, or cat or dog). It was… how to describe it… normal.
Well, sort of normal.
The train was pretty much empty. I was one of three people in the carriage. I also had to wear my mask the whole time. Except when I was eating or drinking. That was handy because I pretty much ate and drank the whole way down.
It’s okay, there wasn’t anyone within five metres of me, let alone two, so no spreading of the Covid in my carriage.
Then at the station in Central London, it was a ghost town. There were more police and “Community Bobbies” than actual commuters. I mean, surely they had somewhere else or better to be? All it looked like to me was a big old waste and misallocation of resources.
Anyway, that was somewhat to be expected.
As I rounded the corner towards the taxi rank, that’s when things hit me.
Another one bites the dust
I’ve never seen the taxi rank so full of cabs before. It was brimming with cabs, all waiting for passengers, but not a passenger in sight. There would have been 20 cabs, the drivers just waiting, chatting with each other, probably lucky to get one or two fares for the day.
It was sad. They’ve not done anything wrong. They’ve got arguably the safest form of transport there is in London at the moment, and yet their livelihoods are crucified with these abhorrent and draconian lockdowns.
They are of course not alone. The hospitality industry has been decimated, travel and leisure businesses are going bust left right and centre. To then cap it all off, last week a report began circulating that Arcadia Group, owner of the massive high street retailer Topshop, could be about to go bust.
Admittedly, physical bricks and mortar retail like Topshop has been in trouble for a while, but we’re now talking about another 13,000 people that could be looking at the unemployment line.
It is continuing to build and build and build as an economic obliteration of the British people.
This is not the fault of coronavirus; it is the sole responsibility of your elected leaders and the sitting government.
When vaccines arrive, when the lockdowns and tier system (which is just another less authoritarian way of saying lockdown) ends, what will be left of the British economy?
Sure, pockets will thrive. But for many the damage will be done, and leave a legacy. Where it hits the most is small and medium business owners. After all of this, who would want to run the risk of it all happening again?
What incentive is there for people to aspire to become self-made, to take the courage to start a business and put their blood, sweat and tears into it, only to have it crushed by flippant government policy?
There will be another pandemic in the future. A bit like market crashes, we know they always come around again – exactly when? Well, that we don’t ever know. But it’s fair to say that in your lifetime, we will again be under threat from a virus that spreads amongst populations.
Now there is precedent – the expectation is the same actions will come next time. In preparing for that, which we all should, then what incentive is there to run a small business?
Or perhaps, what this does is accelerate the shift to “microworking”. That means remotely working on several jobs to add up to what many one consider one full-time paid employment.
The “rise of the freelancer” is something that people have spoken about before, and maybe that is the future for a generation of younger, tech savvy and “white collar” workers. Or maybe there is a fundamental shift more from blue to white collar workers.
Maybe “white is the new blue”.
The best of a bad situation
Either way what is an absolutely certainty from this pandemic is that industry will consolidate. As companies like Arcadia sink below the water line, there will be others like Asos and Boohoo that pick up that slack.
If you can no longer shop at Topshop for your “fast fashion” then you’ll simply move to the next retailer that can provide you with the service and the products you want and need.
This consolidation will likely end up as a boost for those who can weather this storm. With the conditions the way they are now, it may provide a real buying opportunity in the industries where consolidation is taking place.
That’s why I’ve continuously gone on about the beaten-down Covid-stocks, because if you’re able to find the companies that will get through, there’s immense opportunity for them to grow and expand aggressively as we get past all this and as other segments of their industry falter.
It may sound and even be ruthless, but that’s how industry works. In good times and bad, companies fail and their competitors will pick at the piece to benefit from it. Hopefully as they expand they also ensure they create opportunity for all those people who are left out to dry in the cold by some of these corporate failures.
It’s a brutal world out there right now – keeping an eye on where and how the opportunities will flow from it, is crucial to making the best out of a bad situation.
Editor, Exponential Investor