As we think about 2021 the words from Charles Dickens 1859 Historical Novel, The Tale of Two Cities, remain relevant: “It was the best of times, it was the worst of times, it was the season of Light, it was the season of Darkness, we had everything before us, we had nothing before us--in short it was a period very like the present.

 

The staggering disruption and destruction caused by Covid-19 has cast a stain over our entire century. To date, in America, more than 17 million of our fellow citizens have contracted the disease and 300,000 people have died. The number of unemployed persons, at 10.7 million, remains 4.9 million higher than in February. The pandemic has devastated many small businesses.

 

Covid-19 changed the trajectory of the three big forces that have shaped the modern world:

1. Globalization has been curtailed

2. The Digital revolution has accelerated

3. The Geopolitical rivalry between China and the United States has intensified. 

 

We can expect our world to be more digital.  We have witnessed a dramatic shake-up in how people live, what they buy, how they purchase, and where they work. McKinsey in May 2020 wrote that online shopping made enormous progress--ten years growth in three months. The pace of online shopping, learning, and working from home accelerated. Bill Gates predicted that 50% of business travel and over 30% of days in the office would go away as a consequence of the pandemic.

 

While the foregoing summarizes the Pandemic’s extensive swath of destruction, the responsiveness of our society needs recognition. Many businesses that historically emphasized the physical shopping experience now prioritize their digital service. Digital storefronts are welcoming customers. In order to retain business, brick-and-mortar retailers have (1) expanded delivery services (2) instituted far reaching initiatives to minimize the downside of human contact.

 

The success of Nike is illustrative of the New Age. On Friday the company announced its flagship brand’s digital revenue increased 84% for the quarter ended November 30. For years Nike has beefed up its direct-to-consumer business. By contrast it cut back on its wholesale stores. 

 

The performance of Walt Disney highlights the mercurial nature of business. In 2020 Disney’s revenues from their theme parks and cruises plummeted. By contrast Disney plus has amassed more than 86 million subscribers since launching in November 2019. Disney’s fortunes have experienced a roller coaster ride. Earlier this year Disney suspended its dividend.  Since then its fortunes have rebounded. The company announced that its third quarter revenues exceeded expectations and it suffered significantly less losses than originally anticipated.

 

This year investors have committed record funds, some $11 trillion. According to Refinitiv, half has been invested in corporate bonds. Such expenditures have helped companies cope with cash flow and from revenue shortfall. To put this astounding number in perspective, in 1990 and 2000 total investments were only $709 billion and $3.1 billion respectively. The sheer amount of investible funds provides ample reason for optimism that irrespective of Covid challenges the system has ample liquidity.

 

America’s Initial Public Offering Market (IPO) reached the frenetic levels that we last experienced during the Dot-Com era. Instead of seeing red flags investors flocked to new issues. 

 

It would be enlightening to interview Charles Dickens on his perspective. Would he focus on the widespread hunger and economic woes besetting millions of our countrymen or would he marvel at the accomplishments of modern science that prevented another bubonic plague?

 

The outpouring of innovation has certainly dispelled our despair. We can be optimistic that there is light at the end of the tunnel. To overcome the pandemic’s negative repercussions, companies have introduced far reaching technological innovations. We have invested $ trillions in new technologies. Our resilience in the face of adversity deserves accolades.