The COVID Diaries: investor 2

The following interview is with an Australian-based fixed-income investor. It was conducted on 20 March 2020.

Are you working from home? If so, how challenging has the change been and, if not, how likely do you think it is that you will be WFH in the coming weeks?

I am partially working from home. I say partially because our office is quite spacious and there aren’t very many of us who work here so we still think it’s okay to come in to work. Even so, I anticipate we will be doing more work from home.

I would say working from home is both a blessing and a curse. You don’t have to get up as early and as soon as you get up you can start working. For me, it removes up to an hour of travel time. It also allows for a more relaxed and open mindset generally, which can be good for creative thinking.

It’s bad in the sense that you don’t get the immediate feedback from peers that you get in an office setting. And even if you can get that feedback, it’s a bit more distant, because you’re not physically next to each other and it’s harder to read the nonverbal communication cues that we all consciously or subconsciously benefit from.

This period will be especially challenging for teams that have a tight-knit interpersonal dynamic, I think this is where the biggest change will happen. For teams that were already dispersed through different offices in Australia or globally, there will be less upheaval.

How close do you think the market will get to business as usual if we are in a period of social distancing for multiple months, including working from home and little or no face-to-face interaction?

I don’t think the market will be shit for years. I think we’re closer to the bottom than the top. I say this because we’ve seen a few signs of forced liquidation and capitulation, and we’ve seen the selling of very high-quality liquid assets. This tends to be symptomatic of mandatory deleveraging events – for example gold falling or US Treasuries selling off on a day when equities fall 12 per cent, which of course should not normally happen.

Growth looks rubbish for quite a while but if all the coordinated fiscal and central-bank action can’t generate inflation we really are in secular stagnation and a debt deflation trap.

The economic echoes of this period will last for many years and will force many companies to reappraise the way they do business.

“I’m a very gregarious person and I take a lot from physical interaction, so this is one of my skills and strengths that is noticeably dialled back. Do I feel like I’m slightly less effective in a business context as a result? Possibly.”

What other changes are you making in your personal and professional life?

I’m certainly washing my hands more and I carry hand sanitiser. I’m not shaking hands. I’m a very gregarious person and I take a lot from physical interaction, so this is one of my skills and strengths that is noticeably dialled back. Do I feel like I’m slightly less effective in a business context as a result? Possibly.

I am also working on ways to improve my organisational skills. I’m not running into people on the street like I otherwise might, so the physical prompt to remember to do certain things isn’t there anymore. I think everyone will need to become more organised, or be organised in a different way, because for now those interpersonal cues are lost. This could be electronically. Here in the office we’re also using a whiteboard.

What are you most worried about in this period, personally or professionally – and how worried are you in general?

I’m more worried professionally than personally. I think the world is belatedly catching on to the seriousness of the situation and the speed at which the geometric infection rate can overwhelm a healthcare system. It has taken some time but the lessons of Italy, South Korea and China are being learned by the countries that still have time.

The economic impact is more of a concern. Plenty of businesses are at serious risk of going under or already have. They can be very big businesses like airlines or anyone involved in the entertainment industry, or small businesses like the guy with whom we share office space who has a wedding and events business.

Why am I so concerned? It sets the economy back quite some way and the fallout will be most acutely borne by smaller businesses or businesses that hire locally, because they have fewer liquidity levers to pull.

If I were to catch COVID-19, I wouldn’t be particularly worried. Maybe I am being blasé. What I am alert to, and occasionally alarmed about, is the impact it will have on my in-laws in Queensland and my own mum in the UK. They are all in their 70s and 80s, and have various age-induced health issues. This is definitely a worry. It is a threat to anyone over 65, that’s for sure.

What irritates me the most is people carrying on as if it is business as usual. Far too many people are too casual. We are heading towards a global shutdown and, let’s face it, we’re practically there. We need a shutdown to get ahead of the virus and without it we are playing catch up. It’s a tough ask but this is what leadership is for. It is moments like this when effectiveness counts.

For the average Joe, the global financial crisis was an event that took place on a screen that they only found out about later when suddenly their financial levers didn’t work anymore. It was a bit abstract for a lot of people and it was very easy to blame the greedy investment bankers.

It is very different this time around. The effect on markets is just as eye catching but the practical day-to-day effects are universal. The virus doesn’t know if you’re an investment banker, a child or an adult. And it’s very tangible, physical and practical – so it is immediately obvious to people.

What is the latest article you have read in relation to COVID-19 and can you provide a link?

This is particularly interesting, as it has a bunch of peer-reviewed academic research on COVID-19:

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