Annus Horribilis, Annus Mirabilis: Reflecting On 2020

By Christopher R. English, President of Lumen Capital Management, LLC

Somebody emailed me a few months back saying they’d like to return 2020 as a defective product. I’m guessing most of us would agree with that sentiment. While 2020 has been a year of horror and has highlighted both the best and worst in human nature, it’s also been a year of marvels.

Unsung Heroes

First, let’s remember some of this year’s heroes: our medical professionals and first responders. Our medical workers have plodded along for months, going into places and situations the rest of us cannot or would not go, often with few tools and little knowledge of the virus they were battling or the right treatments to give their patients. Even though they haven’t beaten COVID-19 yet, the odds are turning in their favor. We know much more about the virus now than we did last winter, we have better therapies available, and there’s a vaccine being distributed as we speak. How well it will work and when we’ll all have the opportunity to receive it is anybody’s guess, but it is a glimmer of hope in an otherwise dark time. 

The grit and sacrifice of our medical workers and first responders should be remembered. Let’s also acknowledge that many of these folks are young and undergoing a trial by fire unmatched in nearly 100 years. My daughter has a dear friend who’s a nurse on the front lines of this thing. She made a comment to me last spring that I’ll never forget: “I’m scared every day when I go to work, but I go to work anyway. If I don’t, who will?” Leave it to that young lady to define courage for all of us.

Next come our police, firefighters, and all those who’ve struggled in the public sphere trying to hold the system together, often with proverbial duct tape and glue. Police officers endured a particularly horrible year. While there may be issues with policies and a few bad apples in their ranks, it is also important to recognize that many of those officers take their duty to serve and protect seriously, sometimes to the point of giving up their lives. 

Next come educators and those dealing with young people, especially in disadvantaged communities. Teaching and trying to learn from home is hard, and our teachers had to learn on the fly how to make it work. There’s no college coursework or preparation on how to educate during a pandemic. To all these people, we owe our thanks while also acknowledging the role parents played. There’s no parenting playbook for this experience either.

Losses And Gains

Most of this horrible year has been defined by what we have lost. First and foremost are the lives lost, now numbering in excess of 300,000. That’s more than have died in all our conflicts since World War II. We can add in the hours of sleep lost worrying about family and friends we know to have the virus. We can also count all the jobs the virus has taken away from us. You can make many things up in life, but it’s hard to make up time, so account for the lost time with friends and loved ones. You cannot recoup the graduation a child never had, the grandchildren not seen due to the risk to the grandparents, or the wedding that never was. Celebrating the holidays over Zoom is not the same as being there in person. Sadly, when these events resume, many will find an empty chair at the table, a casualty of the virus. I believe we’ll have a better appreciation for everything that went away in 2020, as well as time with family and friends. You never value what you’ve had until it’s gone or almost lost.

Yet 2020 has also been a year of marvels. The fight against COVID-19 has been likened to a war. The skills and technologies from our past wars have always been adapted to the civilian economy, helping it to grow. So it will be from our battle against the virus. The rapid development of a vaccine for the coronavirus is a scientific wonder. Its story will be added to the other great feats of American and international ingenuity. My guess is the breakthroughs from this new development in vaccine technology will yield great benefits in the years ahead. People and businesses have adapted to this brave new world by employing new techniques and ways to work that would have seemed unthinkable a year ago. It is said that six years of advancement in productivity and new processes have been developed in six months. Likewise, individuals have adapted to Zoom parties, online ordering, telemedicine, and mail-in voting. These skills will not be unlearned in the coming years.   

In other marvelous news, we are one step closer to sending citizens back to the moon in a few years, likely ushering in another golden era of space exploration. The year also saw advancements in 5G technology, advancements in gene therapy, further developments in electric batteries for cars, and drone technology. Clean energy is becoming an international priority. Both the U.S. and the Chinese have experienced significant progress in developing nuclear fusion that is harnessing the power of the sun to develop cheap, clean energy. 

In a year of marvels, young people were still willing to take that leap of faith and say, “I do,” marrying in spite of all the uncertainty out there. I see many young people pushing strollers. There’s not yet a baby boom from this pandemic, but I’m guessing we’ll see an explosion of newborns in the next couple of years as the uncertainty of this time eases off. Finally, I’ve marveled at the children from my neighborhood who have seemed oblivious to these hard times as they cavort in and out of each other’s yards. They’ve had a year without adults organizing all their extracurricular activities and have been forced to make up their own fun. I’m guessing they’ll look back on this period a bit more fondly than us adults. Those same children I see running around have the potential of living into the 22nd century. It is very likely that their grandchildren will have the opportunity to immigrate to the moon or Mars during their lifetimes. Truly, we may be on the verge of a wondrous age. 

Markets In Review

The stock market rallied last winter, endured a massive sell-off when we went into lockdown in March, and subsequently defied expectations by rallying in the months since. It will finish positive for 2020 unless something unexpected happens. While the average stock has not performed as well as the tech-laden major indices, I believe these underperformers will rally next year as the economy opens up. Here’s why I think that: help is coming in the form of vaccines, better treatments for the sick, more testing, and adaptive behavior by the public. This relief is the primary logic for why markets have rallied even when the news has been so grim. When it comes, and when the worst of the virus is behind us, I believe we’ll emerge knowing we’ve endured a great thing. That being said, nobody who goes through a significant crisis in their lives comes through it unscathed. It will be the same with the rest of society. The world will never look exactly like it did before the lockdowns last spring. What will pass for normalcy going forward is unclear. However, my guess is that as a society, we’re going to feel like we’ve weathered the passing of a massive storm, and if we can face down the virus, we can tackle other significant issues as well. That confidence will also trickle down into the economy. I think we’re going to be surprised at the rapid pace of economic recovery and growth over the next few years. 

The Question Of Unity

Finally, one of my overarching themes this year has been that there’s more that unites us as a nation than most in the press and in politics would have us believe. It is perhaps hard to believe right now, but I think that everything from a recognition of some of the inequalities in our country, to the confrontation of things many have turned away from for years, to our election results demonstrates that the center held in 2020. Sometimes it barely held, but hold it did. That is also something marvelous and worth celebrating.   

Looking Ahead With Hope

Thank you for indulging my meanderings off the beaten investment letter path a few times in the past year. Again, I will stress that it’s in my Midwest roots to carry a higher degree of optimism about the future. It is almost impossible for me not to be excited given the advances I am seeing in all sorts of fields around the globe, and I’m also optimistic about the generations of young folks coming up behind us “boomers.” 

It is a very American trait to view progress optimistically, and many of the things I see are exciting fields of investment, so perhaps the two go hand in hand. What I can never stress enough is how immensely grateful I am that you allow me the opportunity to work with you and your investments. I consider myself so fortunate to know each and every one of you. I look forward to catching up in the new year, this time in person! Until then, from myself and my family, I wish you the happiest of holiday seasons and a prosperous 2021. Reach out to me at 312.953.8825 or lumencapital@hotmail.com if you need anything.

Happy holidays! Stay healthy and God bless!  

About Chris

Christopher R. English is the President and founder of Lumen Capital Management, LLC-a Registered Investment Advisor regulated by the State of Illinois. A copy of our ADV Part II is available upon request. We manage portfolios for investors, developing customized portfolios that reflect a client’s unique risk/reward parameters. We also manage a private partnership currently closed to outside investors. Mr. English has over three decades of experience working with individuals, families, businesses, and foundations. Based in the greater Chicago area, he serves clients throughout Illinois, as well as Florida, Massachusetts, California, Indiana, and other states. To schedule a complimentary portfolio review, contact Chris today by calling 312.953.8825 or emailing him at lumencapital@hotmail.com.