As a result of macroeconomic conditions, outlooks and estimates, the conclusion was that 2025 would be the beginning of the true recovery, with 2030 being the overall ‘back on track’ normality.
The conditions observed were that of human conditioning, human psyche and psychology, the need for resurgence and infrastructural reform. Such an event, a global shutdown, was in itself a “great reset” and we can only truly start to evaluate companies and conditions post-2025.
The rise in the crypto-industrial complex was also observed and we seized opportunity during the 2020 market crash with purchases of Bitcoin and equities at all time lows. The excessive, corrective printing by the US Federal Reserve, created the boom and subsequent bust of the markets, which led to the overall inflation that the markets faced post 2021.
Until then, the methodology was to remain prudent to the conditions of war, for it is most certainly on the horizon and may have already begun. This proved to be true in 2022.
The outlook is that by Q1 of 2025, we will see a normalisation of travel, flights and accommodation, processes of supply and demand and port congestions – with relics and artefacts of the Covid-19 era, such as contactless payments, on-demand delivery and the “hot desk/remote worker” boom the advent of AI, drones and other autonomous entrants have only allowed this phenomenon to accelerate faster, whilst making it more efficient and cost effective.
What does this mean for SOVRGN?
Companies in 2025 will be leaner and be able to get the same amount of 2019 work done in 2025, at a rate that is exponentially more efficient than 2019. Valuations will be adjusted and fair values will start to become a reality. HR and other expenses will normalise to a “work from home/hot desk” set up. Commercial property will convert to residential housing.
Currently, we are looking at companies that have a quality C-suite; whom have made and will need to make critical decisions that will adversely affect the business – and the resulting leadership across the tiers within the company, thus, it is our main focus over analysis of the company fundamentals itself in the next 12 to 18 months.
Hard times create strong men, strong men create good times,