We are living through an unprecedented moment in human history. Never before have the efforts of all mankind been united in one struggle. Never before has the focus of all our might, our enterprise, our intelligence, our industry, been united in fighting against one common enemy.
It may not feel like that right now. Right now it might not feel much more than frightening. And it is that. For those among us whose health is vulnerable. For those whose livelihood has been threatened. But this moment is also so much more than that.
Our grandparents fought in a great war. They triumphed over a terrible ideology, and in doing so ushered in an age of unparalleled global prosperity. Our challenges can scarcely be compared to those of the Greatest Generation, but our battle will require its own sacrifices just the same.
We can not fight this enemy with bullets and bombs. Our weapons are instead the very same tools that we have used to build the abundant world around us. Our weapon is the technology that allows us to share all of the world’s information at lightning speed. Our weapon is the software that automates our daily lives. Our weapon is the unstoppable march of science that advances each day.
Most of all, our weapon is our trust, and our cooperation. We have built the most integrated civilisation in human history. That interconnectedness is being exploited by this enemy as a weakness. But it is not a weakness. It is our greatest strength.
Our healthcare workers are now rightly being celebrated as the heroes that they are. We should also not forget the other everyday heroes that keep our world running each day.
As I shared in a podcast last year, I firmly believe that all of us have a duty to do what we each do best, to be as competent as possible, and to share the fruits of that competence with the world. By doing so we each play our part in this incredible capitalist democracy that we all live in. All this requires of each of us is to simply do our job, ethically, and to the best of our ability. The plumber that keeps our sanitation system running is every bit as crucial as the executive that shapes corporate strategy. The nurse that cares for our sick is as important as the engineer that designs our roads, or the lawyer that writes our contracts.
Many parts of the world are now shutting down all but the most essential services. As these workers continue to go out each day and risk their health to keep our society running, we will soon be reminded how many everyday heroes build and maintain the world that we live in.
Inventing the future
When we invest in businesses, we are aligning our portfolios with this system of shared progress. The best businesses are rewarded for solving important human needs. These businesses then invest to develop new innovative products, that serve even greater needs, and thereby accelerate our collective upward spiral. Collectively these businesses are inventing the future.
While many businesses are temporarily shutting down, our progress marches on. Scientists around the world will continue their work in a global race for a cure. The first human trial of a vaccine is already underway in Seattle. Another vaccine is being fast-tracked in Israel. Another in San Diego. Treatments are being developed that share the antibodies of recovered patients. New medicine combinations are being trialled. Democracies like South Korea are demonstrating that the virus’ spread can be tamed and then sharing their knowledge with the world.
Millions of businesses continue the battle on other fronts. The world’s factories are being re-purposed to churn out millions of protective masks. Medical technology companies are producing tens of thousands of new ventilators. Mission-critical software is keeping our essential services running. Food delivery services are bringing meals to people in isolation. Collaboration technology is allowing millions of knowledge workers to continue producing from home. Online education businesses are educating our children. Mobile engagement software is connecting us to the people and organisations that we care about. Infant formula companies are providing nutrition to feed our young.
All of these businesses are doing nothing more than their job, and nothing less than getting us through this crisis and building a better tomorrow.
At Maven Funds Management, our role is much more humble than that of a doctor or a plumber. Our role is to allocate our investors precious capital toward the highest quality investments available. In simple terms, we will be looking for two types of businesses. First, durable high-quality, and often mission-critical, businesses that will outlast these tough times and emerge out the other side of this crisis stronger than ever. Second, businesses whose services are in even more demand during this period, and that we think can then translate that demand-surge to long-lasting success. Identifying these companies requires deep research to truly understand what makes each company tick. As always, we will only be investing in businesses when they are available at an attractive discount to our estimate of their underlying intrinsic value.
That means only investing in a very select few businesses. In our view, we are about to see a huge divergence in fundamental performance between different companies. Bizarrely, most investors seem to be spending their days trying to predict the wild swings of the market, instead of focusing on the individual businesses that they are investing in. They are taking their eye off the ball. As a result, we expect that we are about to see some of the greatest investment opportunities in a generation.
There is one thing we can be certain of. We will overcome this. Our habits may adapt in unexpected ways. Our society and our economy will emerge from this stronger than ever, but it also will have changed. At Maven Funds we will be continuously monitoring and adapting our approach, while never wavering from our fundamental truths.
Many years from now when we look back on this crisis, we will no longer remember the fear. We will only remember whether we rose above it. We will not remember how many boxes of pasta we had in the cupboard. We will only remember whether we gave comfort to those around us. We will not remember the urge to panic. We will only remember whether we had the courage to continue to invest for our, and our family’s, future.
As investors, this is not the moment to fold in on ourselves. This is a once in a generation moment to invest in the outstanding businesses that drive our society forward. If we can do that, with vision, with courage, and with patience, then for each of us, this will be our finest hour.