We don’t believe in psychics, but we do believe in financial forecasts. We don’t believe in gazing into a crystal ball, but what we do believe in are highly inaccurate financial models that don’t–and statistically can’t–predict the future.
The business world is a huge colossal engine of human emotion.
But before we even attempt to predict the future, let’s take a quick look at past events. Shall we?
The COVID-19 pandemic forced countries to close their borders, their shops, their businesses and even their homes to the outside world. As we grew increasingly isolated physically, we grew increasingly connected digitally.
Did the COVID-19 pandemic wreck havoc and disrupt the world into a state of chaos or did it streamline and expedite a digitalisation trend that was first born in Silicon Valley in the 1970s?
Crisis and opportunity are two sides of the same coin. In times of chaos, opportunities open up in unexpected places.
My better half has a daily habit that she adheres to like clockwork. At midday, she opens the windows for ten minutes to let in some fresh air and sunlight. Once the room has been aired out, she shuts the windows–complaining of the terrible heat.
You can think about investment opportunities in the exact same way. You have ten minutes to make a decision. Regardless of whether you’re a moth, a mosquito or a beautiful butterfly–you have ten precious minutes to fly through that temporarily open window and find a new home. You don’t get to hesitate and you definitely don’t get to putter around wondering if it’s the right window that you’re flying through. There is simply no time to check out all the houses before you make your decision. You just fly in and pray that the lady of the house won’t spray you to death.
It’s the same when it comes to investing. Sort of. Maybe. Well, it really depends on the scenario.
While many pundits are saying that investments were quote-on-quote ‘down’ in the first half of 2020, I beg to differ. Many businesses that were struggling to take off pre-pandemic due to the outdated status quo found themselves slowly starting to grow in an era and time-period that was almost entirely digital.
VC firms and startups in fintech, digital health, education technology and logistics will logically continue to see an increase in demand even as parts of the world move into a post-pandemic world.
The feasibility of a work-from-home digital economy has finally been validated. It is possible. Not only is it possible, it is a reality that humanity was pushed to manifest across the globe to maintain whatever semblance of sanity we had left.
I see incredible opportunities for traditional industries–especially those that were highly resistant to change in the pre-pandemic world. Continued digitalisation efforts across business sectors that have historically been resistant to such changes will continue to proliferate.
In either case, this is not the first time that brick-and-mortar businesses across the world have been hit with a strong thud. With each thud, the strongest survive and those who resist, fight, complain and whine about the inevitable transformations that are taking place–find that the solid ground they once stood on is starting to disintegrate like a biscuit that’s steeped in a cup of hot tea.
Just cause you can see it, feel it and hold it–doesn’t mean it was ever going to last forever. The intangible nature of the digital economy was one of the main deterrents that people had towards investing in it.
But as our lives become increasingly digital, so will our economies. As to what actually lays ahead, only time will tell.