First, A Brief Note on Normalcy Bias

We are living through “non-normal” times…as a result, I found the following tweet storm (Link) very interesting.

It talks about normalcy bias, the "tendency to assume an abnormality as normal even though the abnormality is clearly a sign of impending disaster”.

This causes people to underestimate both the possibility of an emergency and its grave effects.

You may wonder why many around you are still playing down the Covid-19 situation (or did so for a while)...that is normalcy bias at play. 

A Massive Reprogramming is Coming

Covid-19 has created a massive shock to the system. As a result, we may be in a time of massive “reprogramming”, particularly if the current circumstances last long. It’s interesting to think about how the world may change as we come out of this…

Here are three predictions:

1. Changes to Global Supply Chains

I believe there will be massive changes to supply chains. 

One specifically, is around medical supplies and equipment. 

Although unverified, I read that China accounts for: 

• 95% of US imports of ibuprofen 

• 91% of hydrocortisone

• 70% of acetaminophen 

• 40%-45% of penicillin 

• 80% of the US supply of antibiotics

Right now, it seems the US has virtually no capacity in the United States to make even basic drugs…

Also we’re already starting to see companies like Tesla, GE, 3M, Honeywell starting to divert their manufacturing capabilities for N95 Masks, Ventilators and PPE.

Will such manufacturing come to the US? 

Will this now be considered a matter of national security?

2. The Move to Remote Work

Although this trend was already in place, it will now accelerate…

A couple of early beneficiaries of this movement: 

• Zoom Video Communications Inc (ZM) - the stock has been on a tear, has doubled since December 2019, and is currently near all time highs. 

• Teladoc Health Inc (TDOC) - I mentioned this stock in November. It is benefitting from the accelerated move to telemedicine all over the country. The stock has been my first publicly mentioned double!

Today most companies, who have knowledge workers, rely on on-site salaried staff. 10 years from now, will that be the same? I imagine we will have more companies looking to hire remote workers. Not only that, I believe companies will have more remote workers than the ones onsite. And it remains to be seen whether these will be salaried or hired on a project basis…

Does this bode well for freelance networks like Upwork or Fiver? Let’s see.

As an aside…Upwork is a peculiar case...this should be a massive company (massive market/has a leadership position/large network effects/backed by top-tier VCs) yet it is barely worth $700 million today. Why is that the case? Perhaps this is an opportunity? Or perhaps it’s a company that failed to live up to its promise...I suppose we will find out.

3. Contactless Payments Should Accelerate

No one will want to touch paper money or coins anymore, let alone use pin pads...yuck. This likely bodes well for Visa and Mastercard.