Baked beans and shotgun cartridges

The fear is real, the hysteria more so. Covid-19 has stepped up to join H1N1 as a 21st century global pandemic. It leaves those other paltry epidemics in its wake, though remains firmly in the shadow of the hundred-year-long HIV/AIDS pandemic. The impact of the whole affair on peoples’ lives seems as if it will be felt for many weeks, if not longer.

C U l8r

Do you remember when shorthand textspeak was all the rage? During the times when typing an ’S’ required four presses of a button, a new language evolved. The advent of phones with full QWERTY keypads saw the language mostly go extinct, though we still get texts from our aunt using terms such as ‘gr8’, ‘l8r’ and ‘thx’. 

Coronavirus measures have spawned a new kid on the textspeak block: ‘wfh’. Perhaps it’s already in common use amongst professionals who have the option to work from home? Being in a career that lacks that option, it certainly seems novel. Perhaps we’re just showing our dated-ness, much as our aunt continues to do.

Along with ‘wfh’, words such as ’quarantine’ are enjoying a surge in use, as is the term ‘self-isolation’. As long as ‘self-immolation’ doesn’t join them, things will be alright. Others have written eloquently on the longer-term impact of realising that most jobs can always be done from home, pandemic or not. For many wfh-ing isn’t an option; there’ll likely be a significant financial hit to a large number of households. Those sitting on Emergency Funds can bask in the warmth radiating from their cash reserves. 

Number of mentions of the word ‘quarantine’ on social media from 10th February to 15th March. Source: Brand24

For many NHS workers there may be a bizarre reverse-‘wfh’ effect. Some of our colleagues have already spoken of the blow-up mattress in their office and plans to stay away from their children. If events in the UK reach a similar scale to those in Italy then it’s a real probability that a high number of clinicians will be infected. In such a case, staying away from home to avoid infecting the nearest and dearest may be people’s chosen option.

Baked beans and shotgun cartridges

The markets remain tempestuous. An approximate 28% dip in the FTSE-250 in the past few months is fairly impressive. Perhaps a better investment decision would have been to buy shares in companies that make sanitary products, though unfortunately Johnson & Johnson (-5%), Procter & Gamble (-10%) and KMB (-16%) are all down. As an aside, there’s just shy of three weeks until the new tax year; time to fill whatever ISA allowance remains before it resets on April 6th.

The message from much of the FI and investing community is… exactly the same as it’s always been. Don’t panic, don’t sell. Play the long game. It draws parallels to the ‘boring prophet’ from Monty Python’s The Life of Brian. Whilst other prophets predict cataclysmic events, the boring prophet preaches the mundane

Rightly so; history suggests that things will cycle on through as they’ve always done. (Although, have you heard that past performance is not a predictor of future results?) For many, ourselves included, this represents the first test of our investing mettle, of our mental fortitude. Advice is often given and seldom taken. We would be wise to heed that of those who’ve been through it all before. 

The value of the FTSE 250 (blue line) and gold futures (green line) since the first reported case of the Covid-19 coronavirus (black arrow). Source: Yahoo finance

Gold continues to hold its value, for the time being at least. After our last post, in which we outline the arguments for and against owning gold, Lars Kroijer has weighed in with his own views on gold as an investment in an armageddon-type scenario. We highly doubt that 2020 will herald a post-apocalyptic era. If it does, then there’ll be no jobs, no salaries and the GBP may no longer be the common currency. In fact, we’ll have reached a sort of financial independence nearly 20 years ahead of schedule.

Kroijer quips about not forgetting the can opener in the event of having hoarded baked beans. Based on the evidence from the local supermarkets, the tin opener will primarily be needed for canned tomatoes. As the mass purchase of toilet paper has replaced the weather as Britain’s favourite topic of conversation, we inevitably found ourselves in lunchtime chit-chat regarding the recent bulk-buying fanaticism. “Bog roll!”, exclaimed one of our colleagues, a wry smile touching the corner of his mouth, “No I’m buying shotgun cartridges, to keep thieving bastards out of my pantry”. 

There may be a hurricane

We’re not going to go full Michael Fish and suggest that the weeks ahead won’t be stormy, be it literally or metaphorically. The already creaking NHS is being subjected to a new pressure, one that’ll surely expose its already chronically understaffed hospitals and downtrodden employees to a new realm of psychological and physical strain. It’s a system that already relies on the goodwill of many and it will do so now more heavily than ever. There is, however, evidence in the form of the waning caseload of Chinese coronavirus patients to suggest that the storm will pass eventually. There’ll be a blip for sure, but the markets will inexorably grow as ever. Yes, some will discover new gluten intolerance, rendering their carefully sheltered pasta stores worthless. Some may end up working from home on a more permanent basis. And some will have cleaner hands and rear-ends than ever before.

TTFN,

Mr. MedFI

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