Here I sit, putting finger to keyboard. The sun is shining, the birds are singing, the sky is blue. You would think that all was well in the world. Barely any traffic noise. The water is clear, the air is fresh, and maybe, we are just starting to creep out from the horrors of arguably the most disruptive – non war – event, that has occurred in this country, in the last 100 years. Tens of thousands of lives have been lost, hundreds of thousands of businesses have closed, some never to re-open, and our lives will be changed forever. Maybe only slightly, for many, but nothing will ever be quite the same again.

Sure, our Nescafé, PG Tips, Best Bitter, Pinot Noir, or whatever your preference, will taste the same. But will you still get it from the same place? Our major supermarkets will still exist, but they are increasingly losing custom to the “discounters”, and will those that in their new working from home environment, have gone back to using local stores (where they have been open) remain loyal, or revert to their “big shopping” habits? Will our local pub(s) be open as before, or will their punters carry on drinking cheap booze, at home? (a Director of a large “PubCo” of my acquaint, recently said that up to 50% of their pubs might not reopen). My point (thank heavens, I hear you say) is that none of us know what effects this pandemic will have on the world (and thus the share values of the businesses in it) as we know it. However, it may be worth putting things in perspective. As I write, there have been some 6 Million confirmed cases of Covid-19 worldwide, with 360,000 deaths. Sadly, around 38,000 people have so far lost their lives to it, in the UK. In the “Spanish Flu” pandemic of 1918/9 some 50 Million souls lost their lives, 228,000 of them in the UK. In the Battle of the Somme, some 125,000 British soldiers died: one battle alone. Not to detract from the horror of losing someone to Coronavirus, many cases of which, some will say, could have been avoided. Just to illustrate the relevant scales.

Maybe it is because our world has changed so much, in the last 100 years, that the effects of this disease are having such an effect, and may well have in the future. Our High Streets are already changed, some beyond recognition. Even more shopping has moved “online” during the lock-down, how much of that will never return to the old-fashioned way? How long will it be, before we are happy to be squeezed in together, in “pile ‘em high, sell ‘em cheap” aircraft, or on public transport, without being concerned about what we might catch? After the World Wars, and the last pandemic, people just “got back to normal”. Now we are being threatened with “new normals” whatever they may be, and we will just have to wait and find out how different they are.

From an investment perspective, most share values have taken quite a battering, and probably the greater part of those will bounce back, to some degree. People have been eating and drinking, and will continue to do so, so the producers have, in the main, fared reasonably well. They should continue to do so. My feeling is that a fair amount of larger company shares have been “over sold” and will recover, in time. Well managed UK Investment Trusts might well prove to be worth a punt, particularly if they have an element of “gearing” (they have borrowed, to invest) as this tends to make them fall more in falling markets, and vice versa. My usual warnings: don’t invest money you may need in the short term, always expect to invest for at least five years, and don’t “keep all your eggs in one basket”. So much has changed, since our last edition. Until we see how much has changed again, in the next couple of months, enjoy the sunshine!

David Foot