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COVID survey results: All you need is LUV

With 730 responses, some surprising trends have emerged. The most informative feedback comes from the comments, which can be accessed in the full report, linked here. An analysis of results is presented below.

Q1. Has the low point since January already passed?

The S&P/ASX300 closed at a peak of 7,115 on 20 February 2020 (seems so long ago) before falling to 4,500 by 23 March, and now clawing back to 5,443 on 14 April, making it down 23% since the high. Despite the recovery, only 17% think the market has bottomed, a similar number to those who 'Don't know'. Two-thirds of responses think a new low is coming, including a high 24% who say we are in a longer-term bear market.

Q2. Into which asset class are you investing more after the sell off?

The 'please nominate' responses are included in the full report.

Q3. How much has your portfolio lost?

The S&P/ASX300 is down 20% since the end of January 2020, and 40% of respondents estimate their portfolio is down at least that percentage. This suggests significant allocations to growth assets. Only 17% say they are up overall or down less than 10%, so relatively few have escaped with only a scratch.

Q4. How long until the economy recovers?

There's mixed feedback on the LUV recovery:

  1. The 'L-shaped' recovery, where GDP falls and stays down for a long time. This is supported by 42% who believe recovery will take two years or longer.
  2. The 'U-shaped' recovery, where output falls then drags along the bottom for a while, and spikes up as the economy improves. This shorter time period of one year to 18 months gained 42% of the vote.
  3. The 'V-shaped' recovery, with a sharp fall in GDP and a rapid recovery, but only 7% believe we can recover in three to six months.

A solid 9% are undecided on any type of LUV.

Perhaps there's a fourth variation, the 'W-shaped' recovery. NSW Chief Health Officer Kerry Chant says we should prepare for 'zig and zag' where coronavirus restrictions are eased and some liberties are restored, but they could be re-imposed if infections spike. There is potential to reopen parts of the economy if businesses demonstrate strong enforcement of social distancing rules.

Q5. When the crisis is over, what new Federal Budget policies do you expect?

The 'please nominate' responses are in the full report.

Q6. How well has the Government responded?

Amid strong support for the Government's actions on JobSeeker and JobKeeper, access to super, social distancing and stopping residential tenancy evictions, a large majority believe temperature checking and quarantining of people returning from overseas has been poorly handled.

I can verify personally how shoddy we were with returning overseas travellers. We disembarked the passenger ship Greg Mortimer on 4 March after a wonderful trip to Antarctica, and flew back to Chile. The ship then did one more expedition in Antarctica before sailing to Argentina on 15 March to pick up passengers for a 21-day cruise called 'In Shackleton's Footsteps'. They barely made it back to the first stop in the South Shetlands before they realised they had a problem.

This is the ship on which Australian passengers were stranded for a month, mainly off the coast of Montevideo in Uruguay. A charter plane finally rescued the Australians and Kiwis last weekend, with the majority of them catching coronavirus. 

We went on from Chile to Buenos Aires for a week, returning to Santiago on 11 March. At the airport in Chile, our temperature was taken twice, we had to fill in a detailed report on where we had been in the previous 30 days and then we were subject to an interview. It was well-organised and polite, but a thorough examination of all travellers.

We dodged a bullet, as Chile closed its borders a few days after we left.

After the flight back to Sydney, on 12 March, we walked through customs in Sydney. No temperature checks, no forms to fill in, no interview. And now, two-thirds of all coronavirus cases in Australia are related to returning passengers. Obviously, Ruby Princess was a debacle but the mistakes were much broader. After countries around the world had introduced border checks, Australia was still waving people through.

The blue bars in the chart below show our readers believe the Government acted 'About Right' in most instances, with strong support overall except the high green lines ('Too Slowly') in temperature testing and isolation of returning travellers. There's also decent opposition to the $20,000 release from superannuation.

Q7. What will be the trigger for you to believe we are over the worst?

Q8. How has the pandemic affected you adversely?

Nobody has experienced a global pandemic before, and the implications are widespread. Everyone is feeling it in some way, although a surprisingly optimistic 39% responded, "Mainly, I see this as a good investing opportunity."

Q9. What will be some sustained consequences of COVID-19 when the crisis is over? Or any other general comments.

Over 450 comments were received for this question, covering a range of consequences including taxation, debt levels, holidays and travel, government policy, global trade, education, employment and spending. They are included in the full report.

Q10. Would you like Firstlinks to publish more regularly during the crisis?

Most readers want Firstlinks’ coverage of the crisis to continue as it is. New articles are now posted to the website during the week.

 

26 Comments
Chris
April 20, 2020

More an observation - both myself and my wife are migrants here and it is an absolute joke what has happened in terms of "oh, just work from home". You can't, not easily anyway, with young children.

I NEED school to be open after the Easter break. We're both essential workers and although I can work from home, I CAN'T work properly and be a teacher to my daughter at the same time, she needs help to do and then upload her classroom work.

An article in the Fin Review last week had one person say "working from home is a productivity disaster..." I was on a leadership meeting presenting and my daughter walked right behind the camera and said 'I just had the scoot of my life' and fell to the ground in a very melodramatic fashion...."It just felt as though overnight, my husband and I went from being parents and full-time workers to also being teachers, so we've had to adapt on the fly,".

Well, you're not telling me anything new. We don't have Grandma and Granddad here, just like people who move here from interstate; we're on our own and we can't go taking Carer's Leave or our own annual leave all the time. We rely on OSHC and the school to help us balance our work and personal lives because we have no other support here. Companies need to understand that if you are requiring people to work from home, you also need to take into account that their productivity won't be as good. "Work from home" is not some magical silver bullet that shifts the cost from the employer to the employee whilst maintaining productivity.

And by the way, if you DO claim the tax deduction for working from home, surely that will have CGT implications when you go to sell in the future because you used your house to make an income ? No one has really thought of that !

Reader comment
April 19, 2020

I think the FirstLinks articles have been very helpful. It is very much appreciated but there is a limit to how much we can read.

Every man and his dog is sending out notes, e-mails, comments, health and Corona statistics. If it wasn't for self isolation I would not have sufficient time to read it all.

Reader comment
April 19, 2020

It is always easy to judge and comment in retrospect. The government is in a lose-lose situation. Low number of cases and deaths, we over did the restrictions and impacted the economy and employment level unnecessarily. Significant cases and deaths, too late and not enough. Results in other countries will influence the comments - will low restriction Sweden be a winner; will "she'll be right" US be a disaster. The statistics will flow like Nicaragua with comparison of deaths from Coronavirus, lung cancer, road deaths, old men falling off ladders. At present Australia could be bottom of the league for per capita deaths and cases (a great place to be) but could be up for Premier League promotion in terms of economic downturn. Governments have no choice, you can't let people die because you have insufficient hospital beds and medical equipment (unless you are an undeveloped country like India and Africa, of course!) So minimising deaths has to be your number one objective and you have to also minimise the negative social outcomes from that decision. On balance, irrespective of future outcomes and statistical analyses, I think the Coalition Government should be commended overall.

Paul Croucher
April 19, 2020

Wow only 16.7% said they didn't know - you can bump it up to 16.8% for me. Anyone not in retirement should just stay in the market in my opinion.

Reader comment
April 16, 2020

Firstlinks is always a fascinating read.

Reader comment
April 16, 2020

Newsletters more often would drive me crazy. I think once a week works incredibly well. There are too many changes.

Terry Keeling
April 16, 2020

Restricting short term visa holders would force companies to educate, train and utilise the resident workforce, get farmers to mechanise more and rely less on foreign workers. The government should be supporting these employers to become more efficient and encouraging more value adding rather than simply relying on exports of raw materials.

Rob
April 16, 2020

I hope am wrong.... But an economic event that is unprecedented is highly likely to lead to a share market event that is unprecedented. Yes, the volatility has been unique already, but I cannot believe the markets have priced in the 2 order events that none of us have any reference point to use as a basis for analysis. I am holding fire.

Survey comment
April 14, 2020

Keep up the good work. I read nearly all the articles and they inform my thinking at this time in particular.

Survey comment
April 14, 2020

The stock market will still be a great place to invest, but the relative value of many ASX businesses has dramatically changed. There will be more caution with small investors with an inclination for perceived safer investments. This probably means continued 'safe' investing in Australian residential properties.

Survey comment
April 14, 2020

Some industries will be badly damaged, but new opportunities may emerge.

Survey comment
April 14, 2020

We can't expect the world to go back to BAU any time soon, if at all. Inevitably, there must be changes to consumer behaviour compared with 2 months ago. There's not much point talking about lifting (overseas) travel restrictions when we don't know which countries are going to accept tourists and on what terms. Obviously, government and tourist industry will be keen to see Australians travelling within Australia for extended period before going overseas is allowed. Exchange rate will assist this process anyway. A case in point is the cruise industry. Will governments around the world welcome cruises to the same extent as before? The cruise industry, like big tech, needs to be held to account. Why should governments allow them to continue to ply their trade on current terms? The claimed benefits are grossly overstated (usually couched in gross terms, rather than value added) and costs ignored and they hide behind flags of convenience for tax reasons - and only when convenient and not when they need to offload their sick passengers. Will consumers tighten their belts further and actually save? Will they eat out as often? Will they prepare their own food more often, using home-grown produce? I can barely move on my walks around the suburb and nearby nature reserve for all the new exercise converts. Will they continue post-Corona? I would like to think people will be more health conscious and thus reduce health expenditure but it's probably wishful thinking. And beware the 'new' arguments for industry protection - like lots of viruses, these arguments never really go away.

Survey comment
April 14, 2020

Australia might realise we need to take out more insurance policies against "black swan" events - like the next drought, the next pandemic, the next time we run short of fuel, the lack of base load power. We might learn not to gamble so heavily on nothing going wrong.

Jan
April 16, 2020

Events that are predicted, such as pandemics, droughts, etc. however unprecedented, are NOT Black Swan events. A Black Swan event refers to an event or occurrence that was not, and could not be predicted as in the case of European settlers to Australia who had only ever known WHITE swans. So, it was a complete surprise when they saw black swans.

Survey comment
April 14, 2020

There will be another outbreak of a new virus from china in the future. The WHO needs to take action to reduce further outbreaks from the point of origin, standards must be improved. Some businesses will take a long time to recover if at all. The Government will be financially constrained for many years to come.

Tom Harbrow
April 16, 2020

WHO has displayed gross negligence and corruption, waving wet markets back to work will ensure Covit 20 is already on its way, with resources depleted this will be a real catastrophe, climate change will be dead forever.

Survey comment
April 14, 2020

Health care cost to Governments will force increased taxation. Governments will be aware that this is not the last pandemic.

Survey comment
April 14, 2020

this is first major setback for younger Australians. Hope will be wake up call that life isn't always easy

Survey comment
April 14, 2020

I don't overly fear the virus but I do fear the Canberra winter that I avoid (like the plague) every year. Not being able to go North for part of winter is the biggest penalty for me.

Survey comment
April 14, 2020

We can't move on without the rest of the world - especially the US and Europe. Emerging markets may prolong things.

Survey comment
April 14, 2020

The economic cost of shutdowns, will force earlier resumption of business activity than waiting until virus is defeated.

Survey comment
April 14, 2020

Potential damage from early access to superannuation will hit the poor disproportionately. Expecting superannuation funds to be prepared for large withdrawals of cash in a hurry is unreasonable.

Survey comment
April 14, 2020

Morrison "going to watch the Sharks on Saturday" set public understanding back by at least two weeks. They are still behind on testing: how will we know if we have herd immunity if you do not have stratified random testing?

Survey comment
April 14, 2020

We can all be wise - with hindsight. Given the multiple possible eventualities, the Government has responded in a balanced and timely fashion.

Survey comment
April 14, 2020

Government will go to the same old well. I forsee more imposts on super, especially in pension phase - further tightening of $1.6m limit, changes to franking credits. Older generation to get hit hardest - this group already is disproportionately carrying the burden - e.g. landlords who depend on rents for retirement income. Those with large mortgages will be protected species. Government can't afford for housing market to tank but some reduction seems inevitable. Anything that reduces Australians' obsession with housing has to be good thing for rational resource allocation in this country. Fairest way to start paying for crisis measures would be to scrap legislated tax reductions - marginal rates are already lower and cut in much higher than 20 years ago. No doubt, there will be a raft of special 'levies' also.

Survey comment
April 14, 2020

The economic damage looks to be pretty profound with many 2nd order effects still to come....

 

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