As we bid adieu to the year 2021, it is time to reflect on the year gone by, as well as try to make forecasts on the future. It is a well-known fact that as the lion walks some distance in the jungle, it looks back to examine the path it chose, and how it covered that distance. This retrospective glance helps to build back better. These days, we are so absorbed in the pandemic waves, that we tend to forget the importance of our fortitude and self-mastery.
The pandemic has made many business leaders, economists, and observers clueless. Who would have estimated that stock markets will skyrocketed to new highs, whilst the very foundation of the economy is in deep mess? Nevertheless, this age of bewilderment is starting to give way to an age of transformation. What we are seeing now is the transition from brown to green, that is green transformation. Many governments and companies are stepping up their investment and their efforts to get to net zero by 2050. This automatically translates into huge investment in green energy and green investment. The car industry is testimony to this green revolution. As per latest data, sales of electric cars in Europe have jumped from 198,000 in 2018 to an expected 1.17m, this year.
Digitisation and automation are the second transformation which is happening around the world. In the corporate world, digitisation has taken a quantum leap, both strategically and operationally. Belief, like gathering in an office to get the job done, is slowly fading out. Many organisations are finding that remote working is better in the long term for productivity, sustainability, and employee well-being. The downside of digital diffusion into organisations is that employees whose mindset are hardened against digital transformation may be left behind. Digital and green transformation herald untold potential for growth and economic prosperity, if not harness correctly, may lead to disaster.
Evergrande, Paytm and Bitcoin stock prices movement this year, gave an indication on the infidelity of the markets. Investors who attempted to chase momentum and predict binary events got whipsawed. Investing today is more complex than ever. With stocks rising and falling on very little news while doing the opposite of what seems logical. As a market participant, it’s paramount to identify companies which spin off new age business that cater to the consumer’s latent needs. A decisive differentiator for companies is the ability to use technology, in order to tide over difficult periods and strengthen their cash flow. Long term investors should look for conveyance points, that is, key sectors that come together to create outsized growth potential. The incremental shift of consumer spending behaviour is to be closely watched. Headwinds like inflation, supply chain disruptions and worker’s shortage may hamper the growth trajectory in the short-term but when the global economy roars back to life, opportunities will emerge.
We live in a period of tremendous volatility, uncertainty, and high velocity of change. We are engulfed in a Covid fatigue. Whoever you meet on the streets, though not very often, has a gruesome and tragic story about his survival. As social animals, we tend to ruminate too much on the past and projecting too much on the future. As cognitive and creative human beings, you and I, are rewarded for the richness, impact, and experience of magic that our craft delivers to others. ‘’To choose doubt as a philosophy of life is akin to climbing mountains that led to the wrong summit’’.
As the bumpy festive mood sparkles at the dawn of 2022, I wish you and your family a ‘’Merry Christmas and Happy New Year 2022’’.
