By Andrew Sewer and Max Zahn | Yahoo
The coronavirus has turned life upside down, and when it’s over—which seems far off and even worse, indeterminate—our lives will be changed permanently. That’s always the case after an economic crisis like the Great Recession of 2008-2009 or the stock market crash of 1987. It’s even more true following major turning points in history like 9/11, World War II/the atomic bomb and the Great Depression.
The cause and effect is axiomatic and Newtonian. The bigger the cause, the greater the effect.
Clearly this is a biggie.
My point is the pandemic and its aftermath will be super-consequential for how we live the rest of our lives. It’s not too soon to think about that, in fact it’s responsible to do so—even though the virus has yet to peak—if only to take our minds off the never ending river of difficult news.
In its essence a post-pandemic world, (or really one where we acknowledge and accept that pandemics can and will occur—more on that from Dr. Mehmet Oz below) is about mitigating a new type of risk. There will be implications across the board; for business, government, culture, sports and the arts, as well as behavior like shaking hands.
Let’s start with some first order effects for commerce, and move on from there.
First many businesses that are booming during the pandemic will continue to thrive, maybe not explosively, but should grow above trend for some time. People are already busy figuring out the new, new things.
“I think the next generation of amazing companies will be invested as we come out of this,” Mark Cuban, billionaire entrepreneur and owner of the Dallas Mavericks wrote us in an email. “Someone will have a unique and compelling vision of what the world on the other side can look like that will make us all wonder ‘why didn’t I think of that?’”
Let’s run quickly through the obvious to get your juices flowing: Teleconferencing and remote working tools; (Zoom—the No. 1 downloaded app for iOS—Skype, Teams, Slack, Hangouts, WebEx, etc.) Medical supplies and medicine, (masks, gloves, gowns, ventilators, rubbing alcohol, and then, huge, vaccines.) Cleaning supplies, (I know Clorox has outperformed the market by 30 percentage points year-to-date and still has a P/E of 27, but you have to figure CLX and its ilk will do well over the next five to 10 years.)
Streaming services like Netflix of course and the other FANGS as I wrote about last week are generally well-positioned. Same for meal kits, grocery and food delivery, and digital cooking and weight loss ideas. Ditto for exercise-from-home programs like Mirror and Peloton etc. (NB: The great TP hoard of 2020 will end at some point.)
By the way, while some may continue working from home, most will run screaming from the house—15 pounds heavier—back to work when that all-clear bell sounds. As many of us are figuring out, WFH can be significantly more stressful than the office. “People see staying home has lots of advantages, but people want to see other people,” says Kathleen Day, an author and lecturer at the Johns Hopkins Carey Business School. “Who knew grocery shopping could be a social activity?”
On the flip side of the companies that will make out, are those that will suffer. Mark Penn of the Harris Poll says many Americans won’t fly even six months after the virus is mostly gone. “People see airports and particularly planes and they really fear that,” Penn told me. “Airlines are going to have their job cut out for them.” More so with cruise ships of course, as well as hotels and resorts and all the millions of jobs associated with them.
(Domestic vacation locales, accessible by car, will be big.)
Then there’s the restaurants. While the big chains; Subway, McDonald’s, Starbucks and KFC have the wherewithal to survive, many independent restaurants could be decimated. In all cases, it’s likely prices will go up to cover new unemployment protections that companies will put in place voluntarily or that are mandated by the government. That could prove to be inflationary.
[See also: An Update From the Yahoo Finance Live Team]
What about entertainment? “Do I think people will return to movies? Sure. Do I think people will return to theme parks? Sure,” says Rich Greenfield, equity entertainment industry analyst at LightShed Partners. “Do they open up to vastly different volumes of people, given fears around or once ingrained on social distancing in people’s heads. How quickly does it disappear?”
Greenfield says that linear TV is up (ABC’s “World News Tonight” had 12 million views last week, its biggest numbers in 20 years, as much as Monday Night Football) but streaming is exploding. “This is like putting lighter fluid on things, acceleration in terms of trend,” he says. The new reality is putting even more pressure on Hollywood’s theatrical window, which was already under assault, he says.
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