Prediction #1 – Cyclicals will do better than “work-from-home” stocks

“Work-from-home stocks” have done incredibly well since the pandemic. E-commerce operators, remote working software companies, grocery stores, pharmaceutical companies, FMCG companies, etc. But with vaccines being distributed across Asia in 2021, it looks like we’re nearing the end of the pandemic. Cyclicals on the other hand have suffered immensely, in particular in energy (oil & gas), financials (Korea, Thailand), hotels, property developers, auto retailers, steel producers, etc. I think cyclicals will do well as old consumption patterns re-emerge. In addition, China is experiencing a new credit cycle. And I think the growth in total social credit will stay elevated until July 2021, when the 100 year anniversary of the Chinese Communist Party takes place. Optics are important for communists. So mass distribution of vaccines, a new Chinese credit cycle and a resumption in outbound tourism should probably be positive…