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This time it's different
Old 10-25-2021, 12:13 AM   #1
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This time it's different

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?
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Old 10-25-2021, 04:45 AM   #2
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Don't have suggestions, but an interesting thread topic.
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Old 10-25-2021, 05:04 AM   #3
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I think we have found out just exactly how essential, non essential workers really are. Or maybe another way to phrase it, is what we thought were essential workers, really weren't. Also think progressive businesses will revisit their respective business models and recalibrate as needed to maintain and improve competitiveness.
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Old 10-25-2021, 05:36 AM   #4
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I think we have found out just exactly how essential, non essential workers really are. Or maybe another way to phrase it, is what we thought were essential workers, really weren't. Also think progressive businesses will revisit their respective business models and recalibrate as needed to maintain and improve competitiveness.
...and maybe that truck drivers, warehouse workers, supermarket employees are "essential workers." Many of us took for granted that we could go to the supermarket and find our needs, without giving a lot of thought as to how the stuff got there.
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Old 10-25-2021, 05:52 AM   #5
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I wonder if the "free market" concept for new treatments and drugs will be more controlled by government bureaucracy especially when it comes to immune response therapies. I am not sure if this would be an improvement, but it would be a change.
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Old 10-25-2021, 06:02 AM   #6
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Assuming covid does become a non-thing, I'm not so sure Remote work is here to stay. Yes, for the 1-3 year horizon, but after that, these things tend to swing on a pendulum.

Companies go global and remote to recruit and keep talent, diversity, and avoid some regulatory stuff like visas, but they also really really like looking at rows of cubicles filled with busy people. It made big news when Yahoo did it 10 years ago (everybody, back, now!). Less news when my Mega corp did it, but it got me a severance package, since I turned down the relo.

One thing not on the list is the culture of "powering through" - showing up sick and working anyway. And that might change in some markets/fields, and not others. There are places now still today that want people working even if they are sick. And that's more an issue for the essential crowd, as the WFH'ers already work at home when sick.

I know we've all been there, that time that dude was obviously sick but had to be at that meeting, and you sat there with them for 3 hours and 3 days later...hey I've been that dude! (got sick at the first meeting off the first guy, then showed up to give a presentation later in the week that I could not miss, even though I could barely speak at that point...)

As far as manufacturing, I think (hope) there will be more of a shift to US production, but that will be a whole cultural shift with higher prices. You don't get $17 jeans if you make them here.
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Old 10-25-2021, 08:06 AM   #7
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Been working from home since March 2020. Was told not to get too comfortable at home because this Covid thing won't last long. Company has departments (like mine) where working from home is possible. Other departments (manufacturing) have been at work all through Covid. All I'm hearing from the BODs is how much money we are savings in the form of electric bills, office supplies, coffee, toilet paper, etc..... all the while maintaining production and keeping the customer happy. I get up when I want, wear what I want, eat when I want, and no longer have to put up with a 90 min round trip commute daily. My gasoline consumption has been reduced by 2/3rds, auto maintenance cost is practically non-existent, work clothing costs are zilch, and out-to-lunch meetings are no longer! I guess those are some of the industries I am hurting by working from home. But.....I have had numerous projects around my house completed while working from home helping those industries thrive. I hope this lasts forever but I truly doubt it. I'm actually surprised it has lasted this long.


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Old 10-25-2021, 08:32 AM   #8
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I'll comment on lean manufacturing since that's one of the things I did years ago. I was amazed at how much effort was put into squeezing out microscopic parts of the supply chain. Justified by "the math" of how much money it would save. But what was glossed over was the assumptions built into the math. How much did stock-outs really cost? How likely were disruptions? It's my thinking that now that the Covid driven data is in the models, the algorithms will plump-up the supply chain as a natural side effect of how these things are set up. The "wisdom" of this is questionable, though, because although recent history is a reasonable predictor of the future, something that's cyclical with a faster reacting model is going to mean you're always wrong!
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Old 10-25-2021, 09:29 AM   #9
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and out-to-lunch meetings are no longer!
Someone call me?
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Old 10-25-2021, 09:29 AM   #10
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Inflation. After 2008, I usually heard on TV that businesses were afraid of losing business by raising prices. That is no longer true, and they are racing to put out higher prices every day.
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Old 10-25-2021, 10:17 AM   #11
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....

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. ...
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Don't have suggestions, but an interesting thread topic.
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I'll comment on lean manufacturing since that's one of the things I did years ago. I was amazed at how much effort was put into squeezing out microscopic parts of the supply chain. Justified by "the math" of how much money it would save. But what was glossed over was the assumptions built into the math. How much did stock-outs really cost? How likely were disruptions? It's my thinking that now that the Covid driven data is in the models, the algorithms will plump-up the supply chain as a natural side effect of how these things are set up. The "wisdom" of this is questionable, though, because although recent history is a reasonable predictor of the future, something that's cyclical with a faster reacting model is going to mean you're always wrong!
@ sengsational - I won't disagree, but I'll relate what I saw at MegaCorp that applies to many of these various cost-cutting measures.

Many of these have a downside that may only pop up 'once in a blue moon'. So a conservative engineering type might think it's good to have that insurance/security against those occasional events. Just like a good engineer designs in a safety margin to a product.

But the business reality is, if all your competitors are doing these cost cutting measures, and you aren't, your products become non-competitive. You may be bankrupt before that inevitable problem occurs some years later, and you can say "I told you so, aren't you glad we kept that safety stock?".

It's the same reason that I think we are doomed to boom-bust cycles. A business can't afford to not ride the cycle up, and that often means grow, grow, grow - ignoring efficiencies, so you don't leave money on the table. Then when the market for that product collapses, every business is stuck with over-capacity. You can't even get 10 cents on the dollar for your capital equipment (no one needs it at any price, they have too much too). At that point, efficiency becomes king, so you use the equipment more efficiently, and it's a long, long time before you need to buy more. So your suppliers are likewise affected by the boom-bust.

I have no answer, all I can do is sit back and observe.

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Old 10-25-2021, 11:54 AM   #12
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Second Attempt, all good considerations for changes that will impact lives and businesses going forward. Unfortunately, many of the key businesses that have/ will capitalize on these key trends have already skyrocketed, such as ZOOM, Docusign, various Cloud computing companies, etc.

As one example of a relatively new workplace trend, you might want to look into WeWork, which finally recently went public at a much more reasonable valuation than its prior attempt 2 years ago. The trend to downsize office space and get flexible work places is probably going to continue and they may be well positioned to capitalize on that trend. I haven't researched the stock, only keep reading about the history and travails of this fascinating company.
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Old 10-25-2021, 12:02 PM   #13
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Don't know if will stay, but quitting w*rk is the sign of the times. Not enough people to fill j*bs. I'm just glad I've long since FIRE'd or I'd probably be one of the suckers heroes staying behind doing double or triple duty.
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Old 10-25-2021, 12:57 PM   #14
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Originally Posted by SecondAttempt View Post
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?
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Originally Posted by sengsational View Post
I'll comment on lean manufacturing since that's one of the things I did years ago. I was amazed at how much effort was put into squeezing out microscopic parts of the supply chain. Justified by "the math" of how much money it would save. But what was glossed over was the assumptions built into the math. How much did stock-outs really cost? How likely were disruptions? It's my thinking that now that the Covid driven data is in the models, the algorithms will plump-up the supply chain as a natural side effect of how these things are set up. The "wisdom" of this is questionable, though, because although recent history is a reasonable predictor of the future, something that's cyclical with a faster reacting model is going to mean you're always wrong!
Interesting thread - I look forward to reading all the responses.

For sure the supply chain models ("just-in-time" inventory) went too far. Processes that take days or weeks to restart after prolonged shutdowns have been especially painful to the manufacturing bottom line.
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Old 10-25-2021, 03:08 PM   #15
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Second Attempt, all good considerations for changes that will impact lives and businesses going forward. Unfortunately, many of the key businesses that have/ will capitalize on these key trends have already skyrocketed, such as ZOOM, Docusign, various Cloud computing companies, etc.
Same thing with tele-medicine companies like Teladoc, although I think there is still a lot of potential in this sector.
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Old 10-25-2021, 03:12 PM   #16
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Don't know if will stay, but quitting w*rk is the sign of the times. Not enough people to fill j*bs. I'm just glad I've long since FIRE'd or I'd probably be one of the suckers heroes staying behind doing double or triple duty.
Bold by me.

Yep. Glad I am long gone (5+ years), or I would be one of those heroes suckers
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Old 10-26-2021, 12:04 AM   #17
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Yes, memories are short but a side effect of the supply disruptions going on right now are extremely costly to companies. It reminds me of a situation I learned about long ago, and I even forget the reason, but in a 2 year period in the early 90s, US airline lost more money than they had made in the history of aviation. I suspect that the algorithms will say one thing but in the boardrooms there will be questions about why the company lost more in supply chain costs in the last year than were save by optimization in the last 20. I absolutely agree things will drift back to where we were in 2019. But the consultancies that are hired to figure out what happened and why and recoomend changes might do well.
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Old 10-26-2021, 12:06 AM   #18
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Don't know if will stay, but quitting w*rk is the sign of the times. Not enough people to fill j*bs. I'm just glad I've long since FIRE'd or I'd probably be one of the suckers heroes staying behind doing double or triple duty.
We are so short staffed right now that I feel like I am a sucker because I CAN retire now. But I've picked a date and plan to stick with it for reasons listed in another thread.
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Old 10-26-2021, 01:17 AM   #19
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...and maybe that truck drivers, warehouse workers, supermarket employees are "essential workers." Many of us took for granted that we could go to the supermarket and find our needs, without giving a lot of thought as to how the stuff got there.
+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.
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Old 10-26-2021, 01:22 AM   #20
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Unfortunately, many of the key businesses that have/ will capitalize on these key trends have already skyrocketed, such as ZOOM, Docusign, various Cloud computing companies, etc.
Some of these will crash once things start returning to normal. My company has used Zoom for a few years. It's a great platform no doubt. But people like me who signed up for a pro account last year will drop it as soon as we can.
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