This time it's different

[CRLLS]

I wonder whether the periodic overhauls of organizations' systems (budgeting, organization, management, communication) has ceased since covid? That was a pretty big business - new VP comes in with an idea for a new financial system, committee meetings for a year or more with the software vendor, mass trainings, etc. There will either be a pent-up itch to overhaul something major, or a sigh of relief that each division can escape producing a new mission statement!

The impacted sectors here would be management, training, and software consultant companies.

Most definitely with large companies reorgs will continue, possibly with increased activity. Covid put light on so many issues that need to be improved. That is if they can find enough employees who are not already overloaded. Oh wait, that doesn't matter. their employees will just be tasked harder.

In some cases, smaller businesses will simply change their operating MO. For example, DIL just got hired by a company 2 states away. Before Covid, they would never consider employees working from home. Now, since Covid forced everyone to be working in remote locations, and things like Zoom have shown how well it works for them, their search for new employees has expanded beyond their usual commuting distance. This has opened up a higher qualified group of applicants and as a result, employees. It has worked so well that they are selling their bricks and mortar building and not looking back.

 

[NW-Bound]

Here are few things about some effects of Covid that I have pondered if they will be long-lasting.

1) Dining out

The cost of a meal sit-down restaurant has gone up quite a bit, at 25% or more compared to pre-Covid. This is just based on my anecdotal experience. I wonder if people are still worried about infection, or they have learned to cook at home and do not feel they need to go out to eat as much. The restaurants have to raise prices to stay afloat, due to fewer diners. On the other hand, sales at fast-food restaurants seem to recover, but this is casual and convenience food, not fine dining.

2) Cocooning effect

After the 9/11 attack, travel was down and people stayed at home more and spent money on hobbies. With Covid, people spend more money on home upgrade. Sales at Home Depot and Lowe's are still going strong, despite some travel re-opening.

3) Early retirement

We have all read about people taking early retirement, or not taking low-pay jobs. Perhaps the cut of personal spending during the lockdown taught them that many prior expenses are not really essential. Perhaps they have learned to be happy by spending less, and discover that they can now work less.

 

[thefist]

Good thread so far. I’m a bit surprised, and delighted that the “This time is different” comment hasn’t been scorned and ridiculed yet.

Change may not happen fast, but it happens.
Billions of payments are now peer to peer with apps vs cash and check.
Credit card payments via mobile phone or watches.
Ridesharing replacing taxi and personal cars in high density cities.
Autonomous driving on the horizon.
Renewable energy.
Robotics and JIT manufacturing have been around for decades, and have been deflationary. Now they go after some of the entry level jobs like cashiers.

Will companies pay more attention to work/life balance now to retain talent?

 

[thefist]

Another thought I’ve had recently as I keep hearing of the labor shortage…

Do we really have a labor shortage, or is there a surplus of retail stores? In my area (central NC) I think the latter. I do tend to shop off peak, but when only 3 of 10 checkouts are staffed, and lines are no more than 3 deep, do we really need all these grocery stores?

 

[Markola]

^^^^^ During Covid, I essentially switched to 100% online/drive groceries. It saves SO much time and drudgery that I’m never going back. I know many people have them delivered but for some reason, I prefer drive up, as it gets me out of the house. Except for the occasional Whole Foods type experience for special meals, I wouldn’t care if my groceries came straight from a warehouse, as long as I could drive to it easily. Of course, if more people were like me, warehouses might soon be our only choice.

 

[chassis]

I cringe when I hear those words but I wonder if the pandemic and its repercussions might actually make some things different.

Are there areas of life or business that people here think will change significantly over the long term that may lead to investment opportunities? I'll throw a couple of things out there.

1. I think remote work whether from home or people living far from their workplace is here to stay. My company and it's current CEO has long been opposed to most forms of remote work. But between sky rocketing house prices and other factors we are hemmoraging people and simply can't get people to come work for us. I understand similar things are happening all over the world. We now have several people working permanently all over the world and just about everyone can work from home. Not sure how to invest in this.

2. Lean manufacturing, just in time delivery. The current logistics issues, shipping delays, chip shortages, etc. have revealed the drawback of efficiencies that have been developed over decades. I think companies will back off from some of the "leanness" and build back in more buffer. Again, I'm not sure I have any specific investment ideas but I suspect that warehouses will become slightly more important again and manufacturing companies will incur more costs to keep more buffer.

3. People rethinking their lives. So many people are quitting their jobs and rethinking their lives right now. I know at least 20 people personally who have made major changes in their lives because of the pandemic. Again, no specific investment ideas but if the people I know are indicative, real estate in smaller towns might benefit.

4. Health care. Health care workers are extremely stressed and burned out. I think this will be a major headwind for hospitals, insurance companies, and so forth as they have to treat employees better and pay them more to survive.

Anyone have any other impacts that might be investable?

1. Old news.

2. Old news.

3. Too nebulous to invest in.

4. Too broken and too big to invest in. Healthcare is a very large soggy wet bag. Enormous opportunity but the investments aren't clear in my view. Need to eliminate 75% of the cost in the system. By cost I mean price paid to provider networks. Yes 75% reduction.

 

[Out of Steam]

+1

Many of the current issues are being caused by the shortage of truck drivers...or more honestly by how the value of truck drivers was not properly valued by society.

A lot of business and personal decisions over the past 10 years, including the rise of Uber and Lyft, seem to have been based on the belief that vehicles that didn't require drivers would arrive quickly. Other such decisions were the decline in truck driver wages and using marginally profitable owner-operators on the theory that their conventional trucks would quickly be obsoleted.

Self-driving vehicles are proving to be far more difficult than these businesses thought, and may be further away now than they appeared back then.

 

[disneysteve]

Change may not happen fast, but it happens.

Agreed, but I also think the pandemic greatly accelerated the pace of change in many areas.


One thing that I think has finally hit critical mass is telehealth. Especially with younger patients who are already used to doing pretty much everything on their phones, telehealth fits that mindset and lifestyle much better than making an appointment and traveling to an office to sit in a waiting room until it's your turn and then turning around and driving home, all for a visit that might only take 10 minutes.


Online shopping was already a big thing pre-COVID but it really took off once COVID hit. I know so many people who started ordering their groceries online, something they had never done, and liked it so much that they don't intend to ever go back to shopping in person.


My wife has greatly reduced her in-person shopping at Target and Walmart. Now she just orders what she needs and either does curbside/in-store pickup or delivery. We just got a Walmart order delivered yesterday.

 

[disneysteve]

Do we really have a labor shortage, or is there a surplus of retail stores?

The labor shortage is not confined to retail stores. It's true in virtually every industry. Yes, we hear about retail and restaurant shortages a lot, but teachers, truck drivers, medical assistants and healthcare providers, lifeguards, child care workers, and nearly any other job you can think of are all dealing with shortages.

 

[daylatedollarshort]

My healthcare predictions - more teledocs, affordable at home type tests, probiotics and microbiome testing are going to be huge. Functional medicine will gain popularity. Healthcare is a ripe pickings sector for the tech companies to disrupt.

Almost all diseases are being linked to the microbiome now. The medical establishment doesn't pivot from the old model easy and tech companies are going to exploit this. A SIBO test that used to cost $300 at a lab needing a doctor's order and a week long wait to get results for one test at one point in time can now be done any time at home with a little $100ish device sold on Amazon and a smart phone.

 

[SecondAttempt]

Childcare. A lot of low paying jobs don't make sense if a couple or person has even one child in child care. They might take home a little more, maybe. Two children? Unless one or both are highly paid, it's a losing proposition.

This may come across as irreverent, maybe even sexist but I'm stating an unfortunate reality. For a professional woman paying for child care may be worth it because it allows her to continue to advance and become a high earner later. A losing proposition today might be winning in the longer term.
Men generally don't face this career roadblock (at least in the US where it is uncommon for men to stay home and raise the kids.)

Politically I am fairly moderate but I do take issue with child care subsidies. If you can't afford to have kids you shouldn't have them. But right now it might be a way to rev up the economy simply because those who need the subsidies have a high marginal propensity to spend.

There was a piece on NPR (ok, so now you know my political leanings) a couple of days ago about child care. The economics are such that child care workers will always be low paid because one worker can only watch a very low number of kids. This is why most developed countries approach childcare as a government responsibility just like schools. I can't say I agree with this view for the United States but I can see the economic logic of maximizing use of our human capital. If you can pay a relatively low wage to a day care worker to watch 6 kids and that frees up a doctor, nurse, scientist, business person, etc. to contribute their skills the tradeoff may be worth it.

 

[chassis]

My healthcare predictions - more teledocs, affordable at home type tests, probiotics and microbiome testing are going to be huge. Functional medicine will gain popularity. Healthcare is a ripe pickings sector for the tech companies to disrupt.

Almost all diseases are being linked to the microbiome now. The medical establishment doesn't pivot from the old model easy and tech companies are going to exploit this. A SIBO test that used to cost $300 at a lab needing a doctor's order and a week long wait to get results for one test at one point in time can now be done any time at home with a little $100ish device sold on Amazon and a smart phone.

Yes, agree. At-home tests, self-ordered walk in tests, increase in the use of data, automation, and general tech-induced disruption will happen in healthcare. Online free diagnoses and treatment plans for garden variety disorders. Similar to free or nearly free legal services for simple and commoditized transactions and contracts, which used to cost several hundred dollars for nearly zero effort on behalf of a lawyer.

I have first hand experience in the healthcare industry. It's broken. The lifers in the industry generally don't know it's broken. The few who know it's broken aren't doing much about it for a variety of reasons, one of the biggest ones being financial self interest in the current remuneration model.

The investability in all of these change I think is limited because the speed at which the industry operates is slower than a snail.

 

[2177V]

I cringe when I hear those words but I wonder if the pandemic and its repercussions might actually make some things different.

Are there areas of life or business that people here think will change significantly over the long term that may lead to investment opportunities? I'll throw a couple of things out there.

Anyone have any other impacts that might be investable?

My wife owned a business which was shut down during the pandemic and recently reopened. She has connections to other business owners so she raised her prices mainly because her competitors also raised their prices. Some business owners can’t find enough workers so they are forced to raise the worker’s wages which in turn raises the prices of their goods and services. What does this mean? It means inflation.

Since I had anticipated inflation will occur, I shifted my investment strategy to commodies, value investing instead of growth and real estate which are all inflation friendly. I am doing very well. The higher the inflation, the more my return I will have on my portfolio. I also invested about $1/4 M into VCMDX as a “hedge against inflation” and this fund is up 48% this year so I am happy with my change in investment strategy. VCMDX involve leveraging commodies using derivatives so this is for advanced investors only…who understand the high risks and high rewards.

 

[kingkarmann]

Couple of thoughts:

Chips. Chips are the new oil. The US will have to nationalize in some sense chip manufacturing as a national defense issue.

Robotics/Automation. Lots of jobs that are vacant now, where there were always workers, have now made automation a viable option. They've forced the hands of the corps and they will be the loser as these jobs are eliminated from the system.

I have a very negative view for low wage positions. A robot can flip burgers, stock shelves, etc. An autonomous fleet of vehicles will replace truck drivers.
All of these things would have happened much farther out in the future, but due to this labor shortage, they will be ramped up much quicker than it had.

AGREE?
Invest in anything that is working with A.I.
I retired last year. Auto manufacturing.
Monotonous and physically demanding. It used to pay above most other industries. No longer.
It’s hard to find perfect to do this work. I say more automation is coming to a factory near you.

 

[RobLJ]

DW always (except for the 2000/Dynegy collapse and the 2007 collapse when she was laid off) always made at least 10% more than me, but when we moved to Houston and started our careers in 1990, it was very, very, very tight from 1990-1995 until the youngest started kindegarten. Afterwards from '95 to 2000 and 2009-2015, it was very very lucrative. I had time flexibility, which was very useful and unusual, for which I am grateful.

That period when the yewts are pre-school is very difficult for parents, even more so now. We kept the 2 and 4 year old grandkids this week and DW just drove them back to Cali Central Valley yesterday. I think the 2 and 4 year old are a hoot, although DW takes the brunt; I did take the 2 year old's throw-up in my hand Wed night several times (I think he had a slight upper respiratory bug since the puke was very phlegmy).

This may come across as irreverent, maybe even sexist but I'm stating an unfortunate reality. For a professional woman paying for child care may be worth it because it allows her to continue to advance and become a high earner later. A losing proposition today might be winning in the longer term.

 

[ERhoosier]

Ha, yeah. And what happened to all of the consultants who exist to be paid handsomely to modify the software, e.g. SalesForce, to such an extent that is no longer supported by SalesForce itself, meaning that your organization is totally dependent, in monopolistic fashion, on the expensive consulting firm that made a standard package “custom” for you, and yet it never really works right, meaning that it isn’t fully adopted for the whole organization. I do not miss these games.

It's frightening to think about how much of this applies to electronic medical records in health care systems.

 

[deserat]

It's frightening to think about how much of this applies to electronic medical records in health care systems.

As someone who currently works in that area and also works with systems that integrate their data to the EHR, you are correct....

Paper will never go away....and/or it will be scanned in as a pdf; lots of issues with underlying networks, application instability, proprietary interfaces, etc, let alone proprietary data formats....been working in this for years and haven't seen much progress in some key areas that would bring about data portability or interoperability. Sad.

But I'm retiring soon, so it won't be my issue to solve

 

[MRG]

As someone who currently works in that area and also works with systems that integrate their data to the EHR, you are correct....



Paper will never go away....and/or it will be scanned in as a pdf; lots of issues with underlying networks, application instability, proprietary interfaces, etc, let alone proprietary data formats....been working in this for years and haven't seen much progress in some key areas that would bring about data portability or interoperability. Sad.



But I'm retiring soon, so it won't be my issue to solve

+1

Paper won't go away ever, it's initially a low cost interoperability solution.

Slightly different vertical but theres a reason none of the vendors want to interoperate.. If they do they all lose vendor lock in. I remember a particular vendor bragging about the revenue generated by consulting services by companies trying to flee their terrible systems and support.

I managed a project that showed our systems ability to interoperate with others in the same space. There was an unspoken understanding this stuff was only for demos at trade shows.