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Finding ways to mitigate the economic impact of Covid-19 is less sexy, but it is likely to be the place where investors can make the biggest difference to other

by ISL 7y ago

Finding ways to mitigate the economic impact of Covid-19 is less sexy, but it is likely to be the place where investors can make the biggest difference to other humans. Zero/low-interest loans will stem the inevitable downward spiral that comes with loss of free cash flow from otherwise great businesses. This is the time to ensure the stable capitalization of good businesses (and investors are likely to get paid back in spades in karma, if not cash, for doing so).

Theodores 7y ago
Well said. The lockdown presents an opportunity. Imagine you run a small customer facing business where the premises could do with refurbishment. Under normal circumstances you cannot close the doors for however long it takes to redecorate the place, maybe putting in modern lighting and air conditioning. Too much revenue would be lost plus there would be the matter of goodwill with customers discovering rival shops. Most of these businesses are cash driven, there isn't a lot in the bank. So, right now the business has to shut up shop, game over thanks to consequences of the virus. Now, if you did have the capital to spend on the premises, you could shut the doors to the customers and hire the usual team to help out on the refurbishment. They might not have the paperwork for the HVAC work or for doing electrical work but they could put everything in place for when times change and the electrician or HVAC engineer could be called out. Painting the walls or assembling shop fittings can be done by almost anyone, albeit not as quickly or proficiently as the professionals. When the hysteria is over and 'herd immunity' is reached then the refurbished business can reopen. With more up to date premises and a fresh look this should result in better sales. Sometimes 'charity starts at home' and helping one's preferred local business to make something of the opportunity rather than close is worth a go. If you are a customer then even just talking to your favourite shop about opportunities is useful, 'customer feedback'. It could be your hairdresser, a cafe or a shop that could do with the suggestion. Perhaps they don't notice the grubby walls as they work there day in and day out, whereas, you as a customer, might notice such things but never say anything as you like the staff. Time to speak up before they close.
- chii 7y ago
  This is what the australian gov't intends to do - allow businesses to tax deduct, fully up-front, any capital expenditure during this period (up to some limit i recall). There's also loans available too apparently (tho how that's structured is something i haven't found out yet).
sytelus 7y ago
This is actually bigger impact by far and away than any others. I think people in a position of power and influence need to lobby governors and congressman to pass a relief act that is squarly aimed at minimum wage workers. This law can mandate: 1. Mandatory rent forgiveness for qualifying folks. The goal is to transfer burden from poor to rich rent collectors. 2. Increased number of food coupons for buying food and essentials from grocery stores. 3. Free testing and treatment for COVID-19 for all. So far all govenrment measures are targetted to keep stock market and real estate up. Both only benefits upper middle class or rich folks. It's a shame.

by ISL 7y ago

Theodores 7y ago

Well said. The lockdown presents an opportunity. Imagine you run a small customer facing business where the premises could do with refurbishment. Under normal circumstances you cannot close the doors for however long it takes to redecorate the place, maybe putting in modern lighting and air conditioning. Too much revenue would be lost plus there would be the matter of goodwill with customers discovering rival shops. Most of these businesses are cash driven, there isn't a lot in the bank. So, right now the business has to shut up shop, game over thanks to consequences of the virus. Now, if you did have the capital to spend on the premises, you could shut the doors to the customers and hire the usual team to help out on the refurbishment. They might not have the paperwork for the HVAC work or for doing electrical work but they could put everything in place for when times change and the electrician or HVAC engineer could be called out. Painting the walls or assembling shop fittings can be done by almost anyone, albeit not as quickly or proficiently as the professionals. When the hysteria is over and 'herd immunity' is reached then the refurbished business can reopen. With more up to date premises and a fresh look this should result in better sales. Sometimes 'charity starts at home' and helping one's preferred local business to make something of the opportunity rather than close is worth a go. If you are a customer then even just talking to your favourite shop about opportunities is useful, 'customer feedback'. It could be your hairdresser, a cafe or a shop that could do with the suggestion. Perhaps they don't notice the grubby walls as they work there day in and day out, whereas, you as a customer, might notice such things but never say anything as you like the staff. Time to speak up before they close.

chii 7y ago
This is what the australian gov't intends to do - allow businesses to tax deduct, fully up-front, any capital expenditure during this period (up to some limit i recall). There's also loans available too apparently (tho how that's structured is something i haven't found out yet).

sytelus 7y ago

This is actually bigger impact by far and away than any others. I think people in a position of power and influence need to lobby governors and congressman to pass a relief act that is squarly aimed at minimum wage workers. This law can mandate: 1. Mandatory rent forgiveness for qualifying folks. The goal is to transfer burden from poor to rich rent collectors. 2. Increased number of food coupons for buying food and essentials from grocery stores. 3. Free testing and treatment for COVID-19 for all. So far all govenrment measures are targetted to keep stock market and real estate up. Both only benefits upper middle class or rich folks. It's a shame.