Revisiting Post from May - Covid and Economic Growth
Published on October 20, 2020
5 month ago we wrote about the effect of Covid19, Economic Recovery and Governments Crisis Management which is reposted below. Data is emerging over the 1H of 2020 and as per 5 months ago, we continue to the be investing in defensive sectors and businesses at good valuations in Thailand, Vietnam and Indonesia.
Published in May: We at CCP have constructed these rough directional formulas in the ongoing C19 pandemic period (say up to the next 12 - 18 months ) to help us guide where we spend our time. 1. (Economic Activity/Recovery) is proportional to (Consumer Confidence) 2. (Consumer Confidence) is proportional to (C19 Infection Rate) X (Ability/Quality of Government Crisis Management) X (Visibility of a Vaccine) What does it say about a "Government Crisis Management Ability" when we prioritise the opening of nightclubs (when whole purpose of these institutions is not to social distance?) and not schools? Perplexing decisions and the poor ability to communicate, significantly reduce the "Quality of Government Crisis Management" Score in our mind. Poor "Quality of Government Crisis Management" means higher probability for successive waves of lock downs, which hammers consumer confidence and business revenue gathering ability. At the moment the countries within our scope of analysis, with Reducing Infection Rates and Stable Government Crisis Management Scores are: 1. Thailand 2. Vietnam