Managing Through the Great Pause
by Tom Kelly -
March 31, 2020
Rocky Balboa said, “You, me, or nobody is gonna hit as hard as life. But it ain’t about how hard ya hit. It’s about how hard you can get hit and keep moving forward. How much you can take and keep moving forward. That’s how winning is done.”
The last few weeks have been some of the busiest of our careers as we believe that in these times of chaos is when we can set the foundation for the next decade of growth. Although we will always see the value of meeting face to face, the advantage of phone/zoom/skype calls is that you can reach out to a lot of people in a day. We have been taking that opportunity to talk to traders in China, Chief Investment officers, chief economists in both Canada and the US, Doctors, Epidemiologists, US political analysts and all of our investment managers from those in Canada to those managing infrastructure in the far reaches of Australia.
Within your investments, changes have been made to rotate towards companies that will thrive in the new world that we will live and work in. Video conferencing and data warehousing are two examples of these businesses. There are also lots of opportunities within companies that are built to survive a recession but have been punished just like the rest of the market. Banks and home builders are some of the forerunners in this category. We will continue to look for opportunities in a responsible and prudent manner as we recognize that we are still in the fog of war. We would like to see a deceleration of the numbers of new cases of COVID 19, a stabilization of oil prices and a continuation of fluid credit markets before we will become more comfortable. In the meantime, we will stay calm and will look to take advantage of the opportunities as they arise.
On a personal level, we know that your main priorities are keeping your families safe and dealing with the disruptions to your daily life that we couldn’t imagine a few weeks ago. Dealing with unexpected school, daycare and university closures, travel suspensions as well as eldercare is stressful for everyone.
Amidst this stress, we stand on our balconies, driveways and porches banging pots, whistling and yelling to solute our health care workers during their shift change at 7pm each night. It is getting louder by the day, proving that the human spirit will again rise above the adversity!
What to do while social distancing?
Here are some useful ideas that our team has come across in the last few weeks. All of these you can do while practicing social distancing.
- Set up Babylon – The first is a virtual health service (Babylon) through Telus Health which is a free service to residents of BC. Virtual care allows BC residents to access primary care physicians for a number of health reasons through the convenience of their smart phone.
- Prepare a War Time Budget – review your bank account and credit card bills to review what fits in the “need” category and what fits in the “want” category. Look for items like subscription services that you are no longer using or discretionary items that could be cut back without a material impact to your base lifestyle.
- Tax planning – The deadline for personal tax filing has been moved to June 1st, 2020 but this does not mean you have to wait. If you are getting money back, file now to get the cash in hand. Also, if you have had taxable capital gains in the last 3 years, consider triggering capital losses to offset these gains.
- Consider the 25% RRIF minimum reduction – if you do not need your full RRIF minimum payment to cover current expenses, the government is allowing you to take 25% less this year. This may reduce your taxes owing and will maintain account values into a recovery.
- Prepare to home school – a few on line tools to get you started.
a. KiwiCompany – KiwiCopany has put together a great resource hub for activities. Organized by age and comes with parent toolkits and updated daily. Click Here
b. Audible – Audible is offering free children’s books. Click Here
d. Google Street View – Get an up close view of the world. With Google Street View, you can visit famous sites and monuments. For example Rome’s Colosseum, the Kohala Coast in Hawaii, or the inside of Palace of Versailles in France. Google Maps’ Virtual Treks take you climbing to Everest Base Camp in Nepal to diving in the Galapagos Islands of Peru to searching for polar bears in Churchill, Manitoba.
e. Duolingo – Learn a new language. Duolingo allows you to spend just a few minutes a day learning a foreign language, in a fun game style. It’s free and there’s even an app for kids. You could also have a go at a new hobby.
f. Visit a Virtual Zoo or Aquarium. Visit Ripley’s Aquarium of Canada in Toronto to keep an eye on the sharks. The San Diego Zoo is livestreaming a number of animals on its website, including koalas, pandas, giraffes and polar bears. You can also bring exotic animals like snow leopards into your living room with a selection of live video streams from Australian Zoos.
Please don’t hesitate to reach out at any time and stay safe!