As Boris Johnson today announced the official unlocking of lock-down, I thought I’d reflect on what I’ve been doing over the last 3 months - which on reflection a random selection of snap / gut decisions, which I guess was very much a case of survival instincts kicking in.
In summary: I got scared so I decided to do something about it ...
Stockpiling
The first thing I did when the Coronavirus struck is probably the most telling of my character. Whereas Catherine - my wife - was focused on stockpiling life essentials (in particular tinned tomatoes and loo paper - which I didn’t quite understand at the time, but later was v.thankful of), I decided to stockpile gold. 3 months to this day in early March, as I watched the stock market tank I decided to buy gold. I don’t know why I did it - I’ve never bought gold before and I know nothing about commodity trading - but I did it. One afternoon I hopped on a train and took Bunny - my 3 year old daughter - on an afternoon Daddy trip to a gold bullion dealer in St James’ to buy a bar of gold.
I guess my intuition told me that the one thing, other than cockroaches, that would be Corona-proof was gold - so I went long on the stuff.
My investment in physical gold turned out to be v.timely, as weeks later as the world went into lockdown it became 100% impossible to buy physical gold - as supply / mines shut down, and supply chains locked. This had a v.bizarre effect on the price of gold - where although there was in theory huge demand for gold, and very little supply, prices didn’t rocket upwards as much as you would have thought it might - in a world of limited supply and high demand.
I have close to zero knowledge of the commodities world, but it was definitely an odd time for gold prices - like so many other asset prices. The one thing I did learn was that extreme negative stock market conditions doesn’t = extreme positive gold prices (which was my assumption) - part of the reason for this is what I learnt was the effect of margin calls on gold - as equity investors were forced to sell their gold holdings to pay for their market losses.
Lesson learnt: loo paper’s more valuable in the short term; gold’s more valuable in the long term.
Stock picking
I started with Gold. That was my safe bet. I then turned to equities - which turned out to be more of a rollercoaster. As FTSE stocks tanked from highs of near 7500 to then hitting sub 5000’s the question was when + what. When to invest + what to invest in. It turns out that I should have actually been thinking of the inverse: the point being that I shouldn’t have focused so much on when the bottom of the market was, but more about what the winners of the market rise would be. Yes, I managed to pick the right time to invest in the stock market (as it went into the 4000’s), but given that I had businesses to run - due diligence and focus on which stocks I should buy went by the wayside. The stocks that I ended up buying and riding through the subsequent months are a ragtag of mostly ethically dubious and debt-laden basket-cases. I don’t know why / how I ended up with these stocks, but I did - and still randomly hold them.
Playing the markets during an epic market crash was pretty nail-biting and in reflection revealed a lot about me - which I kinda enjoyed in a meta-way. The long/short of it is that I discovered at a) my intuition is good - i.e. my gut tends to be right b) thinking about stuff too long is bad for me i.e. when I think about stuff it leads to bad decisions c) I like winning and hate losing d) I’m a risk taker but the downside of risk i.e. I hate losing.
All of these factors combined - especially in a world where you minutely view your winning / losing via stock market apps - meant that I managed to twitch myself to a outperform the markets by an impressive -10% (more of this stock-picking genius analysis in later posts, as on reflection I’m now v.aware of why I would have been outperformed by a stock picking goat).
The good news is that I still am up by a long chalk, but the point is I’d have a lot more up if I’d gone with my initial gut instincts rather than overthink it - which I did - and ultimately make worse active decisions than my initial gut decisions. Case in point: early on I sold BooHoo to buy Superdry. Ouch!
Lesson learnt: trust your gut.
Navigating
The reason for doing the first two things was a survival thing. I’d received a bunch of cash for selling my shareholding in Rubber Republic (one of the first company’s I’d founded out of university) a month earlier in February, and thought it would be sensible to put it to work.
Of course as the publicly traded markets were crashing, so too were the privately owned companies I’m involved with. Interestingly the two main companies I’m invested in - Delib and AMCO - acted and reacted to the crisis very similarly to the wider market i.e. Delib a SaaS business selling software to government was largely unaffected and actually thrived, whereas AMCO a more traditional service business - providing security services - was hugely affected.
I therefore decided to 100% focus on helping AMCO navigate its way through the crisis - a task which was hugely helped by the government’s furlough scheme that essentially bought the company time to work out what to do without the need to make snap decisions involving tearing the company apart and laying off large numbers of people.
Pivoting
With c.75% of the AMCO team furloughed and traditional revenues turned to zero over night, I looked at how to pivot the company in the short term to make some immediate $$$ to replace lost revenues and also with an eye on how we could innovate the company to survive in the longer term. Thanks to a random encounter in Maidenhead a day before official lock-down with a Chinese camera technology company called Dahua, I discovered a new use of thermal security cameras - for use in detecting abnormal human temperatures, one of the key Coronavirus symptoms. I also discovered that businesses in Asia, who were c.2 months ahead of the UK in their Covid response, had been buying these as a way to get back to business-as-usual.
Two weeks after this initial encounter with Dahua’s thermal camera technology AMCO launched our ‘Covid Thermal Screening Solution’
Lesson learnt: don’t bury your head, do sh*t.
From Surviving to Thriving
Launching our Covid Thermal product was always going to be a short term fix for AMCO to make some short term $$$. Surveying the changing market and market conditions actually points to the need for AMCO to make some more radical changes to thrive in the longer term. One key obvious new track is to double-down further on CCTV / smart camera technology - and in particular AI + security cameras. This is something we’ve neglected in the past, but with the successes of our Covid Thermal Screening Solution, we’ve really learnt a lot and built internal knowledge and capacity to do more in this space.
Balancing
The biggest pressure of the whole lock-down period wasn’t any of the above work shenanigans - but was dealing with balancing looking after my daughter - Bunny. Both Catherine and I continued to work full time during lock-down, but at the same time had to manage looking after a very energetic and curious three year-old. By all accounts Catherine bore the brunt of Bunny’s demands a lot more than me, however I felt a constant pressure to make sure the time we spent together was as positive / enjoyable as possible.
Having tried to enact some creative home-schooling on day 1 with ‘Daddy’s bug box’ - which fell flat - I default to doing sh*t around the house - which Bunny loved. So, killing two-birds with one stone I managed to get a whole bunch of house DIY done with my dutiful assistant - including re-painting the front door, cleaning my car (multiple times) and taming a wild rose bush 😉
Lesson learnt: I’m not very good at teaching, but I am pretty good at doing stuff ;-)