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JackChat – March 2020

Jack Chat March 2020

Without sounding trite or naive; we certainly are living in interesting times. I had an executive coach once who told me, “Jack, all events are neutral; the only thing positive or negative about the event is the story you choose to tell yourself about this event. So, make your stories count and work for you.”

I am fascinated by the virus, the lockdown, the quarantine. I see this as a once in a lifetime opportunity for individual, professional, societal and a familial reset. I am not minimizing the virus, the growing number of cases, those folks out of work, the high probability of a recession (depression?) on the horizon. Rather, I am musing in my Jackchat.  I confess I am a full-time optimist, I hold the context of abundance rather than scarcity, and I have a growth mindset. It’s all about the journey.

Speaking of the journey, it took the crisis of a pandemic for us all to share the same journey. Whether you are rich or poor, right or left, single or want to be, young or old, have the virus or as of yet do not, everyone is affected by this pandemic. This will certainly be expensive for some; and, costly for others.

For those bitching about Work-From-Home (WFH), what about those Home-For-Work (HFW)? Sure, Working From Home is sub-optimal; but how can you feel sorry for yourself? What about those who have been sent Home From Work? Laid off. Not being paid. 7m+ restaurant workers are out of jobs, for who knows how long. That doesn’t count the downstream industries affected – cleaning, linens, supplies, delivery, even social media. Every “Amazon-proof retail deal” is literally shut down due to the virus. What about those workers and their business owners?

Crises cause tunnel vision. The opportunity here is to have our heads on a swivel and let peripheral vision in. Opportunity will knock; will we be ‘worry-deaf’ and not hear?

I have 4 children – 3 live in NYC, 1 in LA. 3 have significant others. Saturday was my wife’s birthday. We had our very first family zoom call. We are a “Brady Bunch” and I finally got to see all the kids, with their ‘others’ in boxes at once. It was so fun, I arranged a zoom for my sibs, their families, and my 90-year-old dad in Palm Springs. My wife’s Canasta group scheduled a cocktail party zoom for couples. Opportunities taken to have fun in new, unique and, dare I say, socially responsible ways.

Many years ago, at a CREFC conference, then President Kent Born interviewed (as keynote) Alan Greenspan. Greenspan said, “liquidity is there; until it is not.” I am not a doctor, nor am I an economist; I cannot speak to the public health or the economy forecast. What I do know:

  • I don’t have enough liquidity.
  • Not only did I make too many bets in startups and illiquid ownership in businesses and hard and soft assets; but I used leverage to do so.
  • Everyone has lost wealth, is or will be in a cash squeeze, and will have to work hard to economically replace what was lost. The first step is a strong balance sheet and liquidity.
  • 2008 became a crisis because the institutions that make up the US financial system could NOT finance their balance sheets. The challenge of 2020 is whether businesses large and small can finance their balance sheets. Households as well. After all, this economy is driven 68% by the consumer. No consumption followed by no money to consume leaves a very large economic machine without fuel to restart.
  • EVERYONE has lost. Everyone. No doubt. What is now uncertain is who will be one of the go forward winners? The existing toxin of risk is in our portfolio; the opportunity is in our future.
  • To me, this feels more like 1998 than 9/11 or 2008. My hope/guess/confirmation bias is that this will be 100-150 days. It took the Chinese 3 months; we are two months behind. The Chinese, a military state, could literally force 700m folks to stay indoors; we however could not even keep millennials out of bars and college students off the beaches of Florida for spring break. This will cost us time and money to fix.
  • There will be a big mess to clean up and a ton to recover from.
  • There will be much to be grateful for and to appreciate anew.

There is an opportunity for a fresh outlook and a new way for each and every one of us to exist in our world, individually and collectively. Let us rise to the challenge. The Pandemic Recovery Challenge. The NEW PRC.

Be safe and virus free.

Respectfully, and eternally optimistic.