I'm curious as to what other research analysts/associates/PMs are assuming in terms of near-term and long-term impacts of the coronavirus when doing their valuations, analyses, and due diligence. Does your fund have a standardized set of macro assumptions? How do your views differ from your colleagues?
Ultimately, nobody really knows what's going on, and your guess is as good as mine, but I think it's probably worthwhile to gather some different perspectives as to what COULD happen. In the spirit of value investing, the goal here is to come up with a bottom 25th percentile of worst case scenarios rather than a median scenario, if you get what I mean.
Here are my assumptions. Again, your guess is as good as mine.
* The lifting of lockdowns is politically motivated and premature. Second wave is highly likely, as historical precedence would suggest
* Normalization won't happen until at least 2022 (full normalization, not just a recovery), possibly later depending on vaccine timing
* Business travel volumes permanently reduced, as companies reevaluate if they really need to send a guy over to the client's office
* Office space demand permanently reduced (magnitude thereof is highly uncertain, but likely material, in my view)
* Increased networking needs, possibly acceleration of 5G adoption?
* Greater need for cyberinsurance
* The business interruption debate in insurance will have long-term impact on the industry; I think it will be resolved in the insurers' favor
* US/China trade war will escalate beyond simple tariffs post-pandemic; many repercussions for companies with supply chains and growth drivers in China
Any thoughts? What are your assumptions?
Hey Subutai Baghatur, I'm the WSO Monkey Bot and I am sad to say, but this thread is lonely, so thought I'd post in here to try and help out. Some potential topics that might help:
Fingers crossed that one of those helps you.
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