I’ve been sitting at my kitchen table for six months now. Aside from a few days at the office here and there, home working has defined this year and looks to be the way of things for some time to come.
What does that mean for the economy? I’ve heard many a tale in recent months about how much money people are managing to save by not going to the office.
Let's look at my own outgoings as an example: I no longer have to shell out for a daily train ticket, and gone are the unnecessary jaunts to a Tesco Express or Sainsbury’s Local on the walk between station and office because I didn’t have time to prepare breakfast. I can’t remember the last time I ate a lunch that wasn’t homemade, and it’s a rare occasion now that I’ll meet a friend for drinks or dinner in the evening.
These are the small daily spends that I was contributing to the economy and now me and countless others are no longer carrying out these transactions. Maybe that’s good for the country’s saving ratio but it reads rather like an obituary for businesses up and down the country. Or does it?
Morningstar analysts have taken an in-depth look at what exactly the home-working phenomenon might mean in the long-term and, while they expect people to make their way back to offices eventually, based on the current state of play that could be a way off.
Real estate, they say, should be fairly stable. City centres will always be desirable places to live and if more remote-working helps to ease the staggering north/south divide in the UK housing market I can only see that as a good thing.
And, yes, the Tesco Express right by my office might end up closing if it loses its steady flow of commuting customers, but I’m definitely making more visits to the local corner shop as a result, so maybe that’s not so bad either.
The oil price collapse was a shock in spring but, based on prices at the pumps, a short-lived one. Indeed, there’s an argument that more people will opt to commute in their cars where possible to avoid crowded public transport – a boon for the oil industry and car makers alike, if not for pollution.
In the current uncertain environment, there’s much to be concerned about, but the stock market is a world where Newton’s law of motion can be applied: for every reaction there is an equal and opposite reaction, and for every business loser out of this crisis, there will be a winner.
Beware of Entrepreneurs' Promises
It's no wonder that so many investors find themselves drawn to crowdfunding projects. Not only is there an appealing element of altruism in backing a small start-up, there's the hope that you might just hit upon the Next Big Thing.
Our investor this week came unstuck when his hunch that British Blu Tack would go big turned out to be wrong. He came away with just 10% of the money he had invested.
I'm grateful to him for sharing his tale because it's not an uncommon one in this part of the investment market. Regulation around crowdfunding is not as tight as with the traditional stock market and getting enough information about the businesses asking for your money to judge whether they might make it can be difficult.
The story may be captivating, maybe you even use the product or service yourself, and yes there's the chance to help a business that is just starting out on its journey. All of that is undeniably attractive but they're not sound financial metrics upon which to base an investment decision.
If you're considering backing a crowdfunding project I think the safest way to view it is under that lens of altruism - and consider any financial returns that do materialise simply as a welcome bonus.
Why Tesla is So 2020
Is Tesla’s share price bonkers? This is the question posed by our most-read article this week. Share price growth of more than 800% in a single year is cause for celebration as well as pause for thought. Had I bought shares in the company a year ago and seen my money grow eight-fold, personally I'd be taking some profits right about now.
I don't know what will happen with Tesla's share price (perhaps a glance at this Understand Stock Prices explainer will help you make up your own mind) but I think we'll look back on the company in years to come as perfectly encompassing the themes of world in which we currently live: a growing awareness of our carbon footprint, a tendency towards luxury and premium products, and a strange fascination with eccentric personalities in positions of power.
