Remember back in the year 1999? The world was in a panic over what would happen when the calendar switched over to 2000. If you recall, the big issue was computers designed in the past kept track of dates using only two digits rather than four. The fear was that any program that had any relation to dates would malfunction as the calendars changed over. In the short term, this created a lot of havoc globally. Over the long term, it turned out to be one of the most significant advancements in technology to date. Prior to Y2K issues, computer software companies dealt with resistance from people refusing to upgrade their computers. The result was the programs they were designing had to be compatible with old technology, thus limiting their ability to create more advanced software. Because of the changes implemented due to Y2K, everybody now possessed modern computers. This provided technology companies the opportunity to advance faster than they could in the past. All the legacy issues of old computers were solved in one fell swoop.
Fast forward to 2020 and we are in the middle of a global pandemic. In the present, it is a horrible situation that feels like there in no end in sight. However, in the very near future, there will be a vaccine, and the world will move forward. As disastrous as the pandemic was/is, it forced us to make adjustments as to how we live life and do business. We were able to push through the wall of resistance that people have put up and now truly understand how technology can make our life easier. For example, we have had Zoom available for years but never realized how much it could simplify business. We understood some efficiencies can be gained by having staff members work from home, but we were always afraid to embrace this new way of doing business. This not only can change how people live their lives, it can also affect the future value of stock prices. Remember, a stock price is heavily related to the future expected cash-flows of that company. Lower expenses moving forward, mean higher profitability. This can lead to better cash-flow and higher stock market valuations.
We’re often told about the silver lining, and we can all agree 2020 has been a horrible year in both business, health and enjoyment. The sacrifices that everyone has made throughout this year may lead to a better life in the future. We may have more time to spend with our families. We may be able to travel more and no longer be tied to a physical office. We may become closer to people who are geographically distanced. These are examples of the Silver Linings we can take forward after 2020. It is too bad these lessons had to come at such a cost.