| Sam Volkering | 28 April 2020 |
We all know death, it's what you then do that counts
Last time we saw this move was 40 years ago
The S&P 500 pulled below its 1,000-day moving average. Does this fall mean we're in a bear market? Well… if we examine the market from another perspective, it tells us that we're past the lows. But what comes next?
| | Dear Subscriber,
Last Thursday was St. George's Day as I'm sure you're well aware.
Now I'm not a student of history, but I do find some of the legend and mythology somewhat fascinating.
As he is the patron saint of England, I've heard about St. George before. And my little and brief understanding about him was that he was a man of virtue and courage.
The story being that a small town of Silene was being terrorised by a dragon (got to love legends). And that sacrifices were made of livestock to appease the dragon.
But Mr. Dragon got greedy and demanded more. Hence it was humans that were to be sacrificed next. Long story short, this didn't fly with St. George (who was just George at this point) and he slay the dragon, saved the daughter of the king (who was to be sacrificed) and was a hero.
Also his reward he distributed to the people – what a good bloke.
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Courage and valour in the face of adversity
Somehow, over time George became a saint. He was then admired by several kings, became a patron saint of England (even though he wasn't English and never visited England) and voila, St. George's Day is a national day of celebrating and recognising English culture.
Go figure.
Anyway, how St. George got to become a saint and how St. George's Day came about is kind of irrelevant. The point is that it represents the valour and courage of the country and the ability to stare down adversity.
That's the moral to the story and why St. George likely resonated with the kings and queens of days gone by.
In Australia our somewhat equivalent of St. George's Day is Anzac Day.
Not the same dragon slaying story but at its heart one about courage, valour, staring down real adversity in the face of death and importantly, mateship – doing what's right for the bloke standing next to you as you go to war.
The origins of Anzac Day were to commemorate the Australian and New Zealand Army Corps landing at Gallipoli during the First World War.
According to the Australian War Memorial website,
| Although the Gallipoli campaign failed in its military objectives, the actions of Australian and New Zealand forces during the campaign left a powerful legacy. What became known as the "Anzac legend" became an important part of the identity of both nations, shaping the ways in which they viewed both their past and their future.
| | This was an instrumental part of the formation of national identity amongst Australians.
The fact these two days (Anzac Day and St. George's Day) fall within a couple of days of each other is not lost on me. For me personally, this time each year also marks the commemoration of the death of my mum (11 years ago this weekend just gone. I was just 25 when she died).
As an Australian with an English wife and son, this last week has given me pause to think about the world we live in today and what the world we'll live in tomorrow looks like.
And when I look at my son, who is just 14 months old, I think about what his grandmother would think about his future. I wonder what she would say about all this coronavirus kerfuffle happening today if she was still around.
I think about what the blokes that landed at Anzac Cove on 25 April 1915 would think about all this business.
I think about what St. George would have said had he gone into Silene to find the only sacrifice to the dragon had been a nine-pack of Andrex bog roll…
Are we really facing adversity?
I don't dismiss that coronavirus, Covid-19, SARS-CoV-2, whatever you want to call it, is a nasty virus. And it's killing a lot of people. Any time someone dies close to you, it's sad, it's terrible, and when it impacts you directly, it's like your world comes crashing down.
I know exactly what it feels like. We all know death, in many forms. And as shocking as it is, it's what you then do that counts. It's decisions you make that define how it really impacts you short and long term.
But you also eventually realise that from crisis, on a personal micro level or from a bigger, non-personal, macro level, life doesn't stand still. The world doesn't shut off and shut down.
Not for you, not for me, not for anyone.
That's why I think now is one of the most important times to make the right moves and the right decisions that you might ever face.
There are life decisions to make, which you will make. And there are financial decisions to make, which I hope to help with. And that's why for the next couple of days I'm going to hopefully help steer you in the right direction.
You see, while it all may still look grim, and to a certain extent it is, there are still pockets of industry that are absolutely thriving right now.
Even in government-imposed house arrest there are opportunities to lay rock-hard foundations for your financial future.
Online education, remote video conferencing, data centres, application development, software and gaming – all pretty resilient when the country is under house arrest. These are all industries flying right now.
But these are the kinds of industries you wanted to have in your portfolios before a crisis hit.
Of course you weren't to know what was coming until it hit. And there was no way in January you'd even have expected the government to shut down the country. So don't worry too much if you've missed these pockets of opportunity.
There are more, and tomorrow I'll show you a few.
But now it's also important to know some of the real numbers that impact you.
You see, the adversity we face is not the same as that which St. George faced: almost certain death. It's not even close to that of the Anzac troops at Anzac Cove also facing almost facing death.
You and I aren't almost certainly facing death. It might seem like we are though.
However…
Data from the Office for National Statistics (ONS) presents some eye-opening stats.
According to its numbers to 16 April 2020: - Zero people had died from coronavirus under the age of 15
- Total deaths of the working-age population (16 to 64 inclusive) is 1,704.
At the end of 2019, 41.38 million people in the UK were of working-age population between 16 and 64.
Thus, to 16 April 2020, 0.0041% of the working-age population had died from coronavirus.
Now I wouldn't call that facing certain death. No one would. And the numbers on that will have changed a little bit over the last week. But not radically.
What would mum say?
The fact is that very quickly there will be a plan, a roadmap and an outcome to end the forced house arrest. The world will move on, life will not end, nor grind to a year-long halt.
Industry that has been decimated will return and spark to life. And that means you will have a chance to make a couple of decisions.
One is to continue to live according to the "adversity" that's rammed down our throats. The other is to make active decisions to get ahead of the masses and make some financial moves in the market as the bounce-back swings into full effect.
My mother was a teacher. She was practical, pragmatic and utterly creative. But she didn't piss about either. She'd be pretty forthright with her assessment of things.
And she'd have said to me about now to not worry about all this (not that I really am). She'd say be smart and think about Max's future. Now isn't the time to crumble under the pressure of this perfect "adversity'" Now is the time to do the right thing for your family.
That makes my decision making easy.
And when you really look at this crisis, the opportunity it presents rather than the pessimism most people live in, means your decision making should be pretty easy too.
Regards,
Sam Volkering
Editor, Southbank Investment Research
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