The world is increasingly divided. Into the hads and had nots. The nations that had widespread Covid-19 outbreaks and those that didn’t. As horrific as the current situation is in the UK, which of the two positions would you rather be in, in a few months’ time? Amongst the nations with Covid-19 largely behind them, or with the pandemic looming over the horizon indefinitely?
For those of you who lost someone, or had your health impacted, the answer is probably that you want to go back in time and fix our flawed pandemic policies.
And I don’t think anyone is going to argue with you.
But my question is a hypothetical, designed to expose something specific. A piece of good news amidst the deluge of bad. Britain is likely closer to escaping Covid-19 than most other nations. And this has implications in the world of investing – our turf, even in a pandemic.
For those of you who lost someone, or had your health impacted, the answer is probably that you want to go back in time and fix our flawed pandemic policies.
The Telegraph’s Ambrose Evans-Pritchard is on to a very similar idea:
The new conflict is between those pushing for eradication, and those arguing that the greater public good is to end coercive restrictions and open up the economy as soon as we reach tolerable levels of immunity.
It is a clash within countries and between them. Simon Powell and Michael Chiang from Jefferies say the world is splitting into two camps: ‘eliminators’ in East Asia, Australia, New Zealand; ‘suppressors’ in the Americas, Europe, and above all the UK, which will embrace freedom sooner.
How will the two groups fare? Well, I don’t know what the answer will be in a few years’ time. When we look back at all this, what will the narrative be?
No doubt the various chief scientists, head advisers and sage councillors of the various different nations will fail to agree on who got what right and wrong. They can’t even agree on the current measures, after all. Despite all having access to the same limited information.
Ironically, divergent outcomes from exactly the same measures imposed everywhere would go a long way to exposing just how clueless the epidemiologists really are in their policy advice. They might discover that the link between their policies and the resulting Covid-19 data is rather spurious. But that’s just another hypothetical.
Anyway, whatever the overall evaluation, I think we can guess who will escape the clutches of Covid-19 first. Especially when it comes to the economic consequences.
I’m betting on the nations that have “had” Covid leading the recovery
Leaving those in fear of their first large-scale outbreak… in fear. Isolated, at risk of another lockdown and yet to have the virus.
AEP continues in the Telegraph:
The zero tolerance states will in a sense be trapped by their own pristine status and absolutist rhetoric, though it is an enviable problem to have. Singapore will have to decide whether it really wants to hold the World Economic Forum in May, or stay closed as far out as 2022, at rising cost to its position as an open global entrepôt. Tough choice.
You don’t need to know what an entrepôt is to get the point… I think.
While many nations continue to battle with the risk of Covid-19 using restrictive measures and the occasional preventative lockdown, Britain will be emerging from the risk itself. It’ll be behind us. At least, comparatively. We’ll be able to open up and return to the new normal.
That’s a promising situation to be in. Especially for Boris Johnson with an election so far away.
Unless, of course, it exposes a crisis waiting on the other side…
Government debt, defaults, bankruptcies, evictions, unemployment and plenty more has been delayed, not resolved. Britain may emerge from a pandemic to find a financial crisis waiting for us.
So, what should the British investor do?
Well, if you agree that Britain will emerge from Covid-19 earlier than most, you should be looking at which investments to buy. It’s not just Britain, of course. You can invest in the stockmarkets of countries which have “had” Covid-19, and avoid those which are yet to have it.
Or, if you’re expecting the pandemic to have an economic hangover which is yet to dawn on us, you should be more pessimistic about the nations emerging early.
Which do we expect?
I’ll reveal my take tomorrow.
But if you’re impatient, our investment director Rob Marstrand is putting the finishing touches on his latest recommendation for UK Independent Wealth. It is a company which delivered one of the more humiliating ripostes to Remainers in 2018. A real “despite Brexit” classic.
I can’t give away subscribers-only information here. So click here if you’re interested.
Nick Hubble
Editor, Fortune & Freedom
