2020: Too Good To Be True?

Despite Harrowing Moments, the RIA Community Is Prospering

Current Events

The perfect car to beat morning traffic – 1966 Ferrari 275GTB (wikiwand.com)

If you’ve never watched Claude Lelouch’s “C’etait un Rendezvous,” follow this link and hold on – you’re in for a treat!

Early one Sunday morning in August of 1976, Lelouch reportedly strapped a 35mm camera to the front of his Ferrari 275GTB and tore through the streets of Paris at a frightening speed.  No closed roads, no special effects, no safety protocols other than the capabilities of the car and the skill of the driver.  In eight minutes, Lelouch drives the wrong way on one-way streets, narrowly misses oncoming traffic, accelerates through eighteen red-lights, nearly T-bones cars at several intersections, drives on the curb to swerve around a garbage truck, and almost hits several pedestrians and more than a few birds.  In return for taking extraordinary risks, the Frenchman succeeded in making the best car chase film of all time – mostly because the footage is real.

The sheer quantity of chaos is difficult to comprehend – even as it’s happening.

2020 has been a terrifying year for the investment management community, full of the kind of excitement that only comes from cheating death.  And, like Lelouch’s film, the footage is real.  If I tried to catalogue all the near crashes faced by the investment management community, from pandemics to politics, crashes to quarantines, negative oil prices to negative interest rates, PPP to WFH, I would miss so much.  The sheer quantity of chaos is difficult to comprehend – even as it’s happening.

Now, after seven months of living with the pandemic, there is still no end in sight.  We might only be halfway!  But despite the barrage of challenges, the RIA community has embraced WFH, profited from buoyant markets, and resumed a relentless pace of M&A.  It has been, very strangely, a very good year.

Is this a sign of industry resilience?  Or an awful lot of luck?  Let’s face it: we may never know.  In the years following release, Lelouch’s film was the subject of significant debate, rumor, and speculation.  Did he actually have a Formula 1 driver piloting the car?  Did the Paris police arrest Lelouch when the film was first shown?

2020 may also remain shrouded in myth.  The technology available to accommodate collaboration without co-officing wasn’t available until recently.  And having the Fed flog the system with capital has created the only kind of liquidity that could support a market like this, not to mention enable the K-shaped recovery we are currently *enjoying.*  But in numerous conversations with our clients, everyone is a little surprised at how well things are going, and the level of industry success may never be fully understood, even in hindsight.

Is 2020, thus far, too good to be true?  I’ll stick my neck out and say “yes.”

Is 2020, thus far, too good to be true?  I’ll stick my neck out and say “yes.”  The K-shaped recovery is leaving a lasting, damaging impact on a huge part of U.S. society that won’t be easy to repair.  Until the SBA gets its act together on PPP loan forgiveness, most of the “stimulus” associated with that program is not making it into the economy (a large regional banking client told us that 75% of the PPP money they lent is dormant, sitting in accounts at their bank).  When WFHome evolves into WFAnywhere, it won’t take employees long to realize it also means WFAnyone, and the competition for talent will grow exponentially.  Those challenges ahead are enough without considering the structural changes to commercial real estate, travel, fixed income markets, energy stocks, healthcare, education, and tax policy that will emerge from 2020.

Lelouch’s film was also, in some ways, too good to be true.  Although the film is real, Lelouch left his Ferrari at home and instead drove his large Mercedes sedan for the trip.  The Mercedes had an air suspension that would hold the camera much more smoothly than a 275GTB, but it doesn’t sound like the Ferrari’s V-12.  So, Lelouch over-dubbed the sound of his 275GTB (listen closely to the gear shifting – there are a couple of places where it doesn’t match the action) to ramp up the excitement.  We don’t need any added stimulation this year.

If you watch “Rendezvous” to the end, you’ll see why Lelouch was in such a hurry to get to Montmartre.  That really was his girlfriend, she really was a former Miss Sweden, and he really did tell her he’d be there in ten minutes.  As for the race through 2020?  No doubt we’ll face a few more harrowing moments this year, but here’s to hoping the journey for us will end nearly as well.