2020 now belongs to history and it will be remembered for many decades to come. I am sure 2020 has many lessons for business, governments and citizens. I wanted to share some of my leanings in this post and look forward to your feedback.
You can’t be resilient and efficient at the same time
As the virus started spreading in China, most western countries saw it as a development that will not impact them in a major way, while the Asian countries panicked and prepared. eventually when the virus hit the developed countries their systems were put to test and they failed.They were short of hospital beds, equipment, supplies and personal. They also discovered their over dependence on other countries for critical necessities . Many businesses and individuals in western countries, specially in US also found themselves short of reserves and had to depend on bailouts.
One of the key leanings many governments and companies should takeaway from this pandemic is the importance of resilience and self reliance
You know who your friends are during a crisis
Many countries, businesses and individuals found out who their real friends are and who are not. There were significant realignments among countries and businesses in the year 2020. e.g. The Indo-Pecific (Quad) , The Abraham accord etc
Remote working is a thing
Many companies reacted faster than the governments and allowed (many directed) their employees to work from home. This helped in slowing the spread of the virus. However this proved be a fire drill for many companies who had never adopted remote work as a policy and to their amazement their workers proved to be more productive then before. Sure there are challenges in hiring new employees and on-boarding them, organizing company events etc but companies adopted fast and those that did thrived.
Mega Cities are overrated
Remote work has helped us realize that a $7 coffee at a Starbucks near Palo Alto is not necessary to network effectively. The physical proximity to many talented professionals was one of the attractions of mega cities, but when we have tools that allow us to meet, communicate, network and collaborate online, the high cost of living, endless commutes, high taxes and crime infested cities seems too high a price to pay for the occasional coffee we can have with other professionals. The future might be little islands of sanity linked by fiber-optic cables. Where professionals can coleus based on their preference for weather, location, cost of living, political affiliation and taxes etc but still have the ability to communicate and collaborate with a wast pool of talent spread across the world
Indexing is the best option for individual investors
Between Jan 2020 to Dec 2020 I have personally witnessed many smart and experienced investors I know change their principals, style and religion (pun intended) multiple times.
Many sold all their holding during the March 2020 downward spiral of the markets, many were waiting on the sidelines as they saw falling knives and while others (including me) were nibbling when they should have been gobbling up loads of stocks into their portfolios. Thru it all those who were invested in index funds and stayed the course once again were smiling by the end of 2020.
The best book I have read in years and the one I strongly recommend you pick it up if you haven’t already is “The Simple Path to Wealth by J L Collins. You will thank be in a decade after reading it.