The Lowry Letter®

Week of 1/20/2022

Each residential U.S. address can order 4 at-home Covid tests from this address: https://special.usps.com/testkits

Many areas of the United States are seeing potential peaks in the Omicron wave. It seems like everyone you know has either tested positive or has someone in their household who has. Two years into the pandemic, we are more likely to catch Covid though less likely to get very sick (if vaccinated). Testing continues to be a useful tool, and something that should have been easier to do, at home, from the beginning.

According to this analysis, the Paycheck Protection Program was a bad return on investment. This is not because some businesses didn’t need the support, but due to the inability of the program to identify where funds were necessary.

If you enjoyed Get Back, you may also enjoy Summer of Soul, about the 1969 Harlem Music Festival. The documentary was made from footage, mostly forgotten over the preceding decades. The amount of talent on display is stunning- B.B. King, the Fifth Dimension, Stevie Wonder, and so many more. You can see it on Hulu.

We liked this thought from author James Clear: "Are you willing to be uncomfortable for 5 minutes? Exercising is easier once you've started the workout. Conversation is easier once you're already talking. Writing is easier once you're in the middle of it. But many rewards in life will elude you if you're not willing to be a little uncomfortable at first."

Ever misplaced your keys? It could be worse- a drawbridge in Ireland was unable to be opened to allow boat traffic through for 4 years because someone lost the remote control.

Ask the Joes® doesn’t really have a question this week- more of a comment about supply chains and inflation, one of the dominant investment topics of the day. Commonwealth’s Anu Giggar has a very helpful explanation of how supply dynamics may change in the near future.

An excerpt:

With expectation of massive pent-up consumer demand, manufacturers and retailers alike are building up inventories. While companies do not want to be caught off-guard as they were last year, over-producing and over-ordering are real risks. Exacerbating the problem are concerns that actual customer spending will not match up with expectations to spend. A mismatch would leave a glut of inventories in warehouses and shop floors.

Equally important is the possibility of a more rapid return to post-pandemic normalcy. If that happens, we may see a shift in consumer preferences from goods to experiences. During the past year, spending on goods rebounded to well above pre-pandemic trends, but spending on services is yet to fully recover (see chart in article). When spending on experiences and services rises, it could replace consumer demand for goods.

We don’t know which industries will recover first. We do know that this stage of the economic cycle will involve more differentiated results as some sectors do better than others and some previously-poor performers will look more attractive.