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Recapping 2020: Politics, Covid-19, Economy, Investment Themes For 2021

As we say goodbye to 2020, our focus is on 2021 and the many things that will unfold.

Last year was, to say the least, difficult and life altering for people, businesses, and governments worldwide. The explosion of misinformation, which was also mind boggling, contributed greatly. The Covid-19 Pandemic will surely be remembered as a key turning point in American and world history. Many trends emerged and other trends accelerated as a result.

We’ll discuss todays Georgia Senate runoff, the coronavirus, the economy, a Biden presidency, and investment themes for 2021 and beyond.

Georgia Election

Residents of Georgia are voting to elect two senators. Currently, republicans hold a 50-48 edge in the Senate. If the democrats win both seats, they will have the edge with a 50/50 balance where Kamilla Harris casts the deciding vote in the event of a tie. More importantly, democrats will assume the Senate majority role, replacing Mitch McConnell. However, if either republican is victorious, republicans will control the Senate. The polls indicate it will be a very close race. Early voting favored the democrats and it’s been suggested that republicans need to win the in-person voting by a 70/30 margin to overcome the heavily democratic weighted early voting. That’s a tall order for sure. We’ll see.

It’s not unusual for the party of a newly elected president to control both sides of Congress. This was the case for the last four presidents (Trump, Obama, Bush, and Clinton). What is unusual is for one party to sweep the presidency and Congress in the same election. If that does occur, I believe we must look no further than the handling of the coronavirus.


The coronavirus is surging in many parts of the world. Moreover, given the emergence of a new and more contagious strain (but NOT more deadly), experts believe the worst is yet to come. With over 85 million cases worldwide and 21 million here in the U.S., plus the slow rollout of the vaccine, it’s easy to see how. Why has the vaccine rollout failed to reach the Trump administration’s goal? I attribute it to a lack of coordination and inadequate funding. The latter issue is why I wrote a Forbes article December 7 entitled, Why The Next Coronavirus Stimulus Bill Will Happen Soon. In it, I stated that neither party wants to be remembered as the “party that failed to fund the vaccine rollout.” I’m glad they finally came together.

This virus is insidious. While it has the worst effect on the elderly and those with certain comorbidities, it is also mysterious. It has taken the lives of otherwise healthy individuals in their 30s, 40s, and 50s. Even if the actual numbers are not exact, the fact that it is unpredictable is reason enough to be cautious.


Early on we were faced with the prospect of the worst economy since the Great Depression. To their credit, Washington stepped in and provided relief in the CARES Act, which took effect March 27, 2020. The question at that time was: How efficient and effective will the federal government be in getting relief to those who need it? We now know it was extremely effective. However, when the federal unemployment subsidy expired July 30, Congress failed to act, leaving millions of workers in several industries to figure it out for themselves. Finally, five months later, Washington acted. How could they fail to act when so many were out of work due to government policies mandating the closure of entire industries?

President Biden

With a Biden presidency comes democratic policies. However, this is contingent upon the Georgia vote today. If the democrats fail to win both seats in the Georgia Senatorial race, republicans will have the power to prevent Biden from implementing his policies. If the democrats win Congress, here’s what I expect will happen (in no certain order):

· Increased tax rates on highest income earners

· If Congress repeals the 2017 Trump tax cuts, higher taxes on the majority of taxpayers

· Increased regulation (i.e., less business friendly)

· Legalization (at the federal level) of cannabis

· More aggressive action on climate initiatives (rejoin the Paris Agreement)

· More aggressive action to stem Covid-19

· Rejoin the W.H.O.

· Via Congress: Bill to repeal liability protections for gun manufacturers

· Massive new stimulus bill

· Effort to help minorities gain more prominent positions

These are only a few of the items to watch. Again, it depends on what happens in Georgia today. Regardless, Biden’s first order of business will be the virus. During this phase, I doubt he will attempt to raise taxes or promote economically unfriendly policies. These policies may get pushed to 2022.

Biden turned 78 on December 20, 2020. Camilla Harris is only 56. If Biden is unable to complete his term, Harris would become president. Harris has a much more left-leaning view than Biden.

Investing Themes

Which industries will lead the 2020s? Here are a few ideas and a few companies to consider.

Online retail was already gaining traction, but with Covid-19, it has accelerated greatly. In short, companies like Amazon, Walmart, Shopify and others will continue to reap the benefits from the pandemic. If individuals adopt this method of consumerism long enough, it will become a habit and a new way of purchasing what they need, including groceries.

Some of the “work from home” movement will stick in a post pandemic world, reducing demand for office space, and allowing companies to lower expenses. This will benefit companies like Zoom and usher in a new wave of companies offering this service. This may also depress commercial real estate prices.

Health care is another industry that should benefit as more people seek medical help. With the surge of Covid-19, many hospitals have decided not to perform elective and non-life-threatening procedures. Thus, there should be a good deal of pent-up demand for these services.

On the climate front, we will see an increase in clean energy, including electric vehicle production. Currently, Tesla is the leader, but competition is quickly ramping up.

Artificial intelligence is another beneficiary of the Pandemic.

With the growth of online activity and especially after the recently discovered hacks on many government institutions, cybersecurity will become increasingly important.

Infrastructure will be another place to consider, however, it’s not clear when this may happen.

From investing themes to a Biden presidency to the economy to Covid-19, one thing is sure, 2021 will look vastly different from the pre-pandemic era. What will happen and when will it happen? It depends largely on today’s Georgia election, after which, we’ll know much more.

Source: Forbes


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