Buy when there’s blood in the streets even if the blood is your own

Currently there is an absolute explosion in online purchases with lockdowns happening around the globe

There is no doubt how business is being done with the world being changed permanently. Supply chain disruptions are already taking place at a massive scale, with borders being closed down. 

In the short term, there is some massive erosion in terms of value. We can see this with the value erosion in markets around the world with very limited examples of businesses and value thriving. 

However, Baron Rothschild, an 18th-century British nobleman and member of the Rothschild banking family (one of the most successful family business to date), is credited with saying: “The time to buy is when there’s blood in the streets.”

While most businesses are taking massive hits during this period, some business models will do excitedly well during this time of change. Also for cashed up businesses and investors there has never been a better moment to buy, anything from real estate and art to technology companies. 

One thing is absolutely for certain, the way we do business will absolutely change and it will most likely be for the best.

Below are my thoughts on how business is expected to change and how one can take advantage of those changes. 

Expected changes in the short to medium term:

Working from home

Given the current context and risk, businesses will be pushed to make changes that will get people to work from home. Optimisation of working hours and more meetings will go on the cloud. Currently there is a huge drive for meetings to happen virtually. Companies such as Zoom (online meetings app and desktop) have seen value skyrocket.

Thus, technologies that help in the process of optimising virtual meetings will do very well. This will also include companies locally, such as Dialog, doing well, as internet consumption will set to increase in the short term as well.

There will be a learning curve here, as businesses will need to learn how to manage staff members remotely. However, necessity breeds change and this will happen. Which would mean eventually a re-drawing of how business is done. 

Winners: Technology companies, digitally driven banks, fin-tech, data and service providers.

Losers: Real estate companies (commercial), transport services. 

Online shopping to become the new normal

Online shopping will surge, especially in the area of FMCGs. Currently there is an absolute explosion in online purchases with lockdowns happening around the globe. This is a significant shift from consumers’ bot buying products only for discounts. 

Currently companies such as Amazon are hiring massive number of employees to keep up with the demand. 

However, to grow in this sphere during this period one needs three main components. Supply side, technology and logistics. Companies with a very strong supply side support such as supermarket chains will do excitedly well as long as they have a good technology for front end and back-end to handle the demand. 

Winners: Ecommerce players, technology-driven retailers, last mile delivery companies 

Losers: Brick and motor that will depend on footfall

Self-sufficiently in terms of supply side

Post-corona there will be most likely is a push by governments to be more self-sufficient in terms of products that are consumed locally. As we see the closing of borders and serious supply side issues being raised, countries will want to be more self-sufficient in the future. 

Winners: SMEs and farmers

Losers: Importers and traders 

In summarising it can be noted that this is an incredible Black Swan event that is currently having massive negative consequences, in terms of the human as well as economic cost. 

This said, as this affects the globe, no one could escape from that reality or the new world order that will be created as a consequence of it. There is little choice but to look to the future so that we can invest and prepare for it.

(The writer is a Co-Founder and Director of Takas.lk, board member of the Lankan Angel Network and former Board Member of People’s Bank. He can be reached at [email protected] for comment.)