Nice work here from Seth Klarman of Baupost:
Peering into the Future: The Possible Longer-Term Ramifications of the COVID-19 Pandemic
For most of the last century, a reasonable approach to assessing a company’s future prospects was to expect mean reversion. Fluctuations in business performance were largely cyclical phenomena. The stock market, as always, could be fickle. What was in favor today might well become disfavored in the future, and what was out of favor today might well rebound tomorrow. This quote from Horace’s “Ars Poetica” was prominent in the preface to Benjamin Graham’s “Security Analysis”: “Many shall be restored that now are fallen, and many shall fall that now are in honor.” But today, technological disruption has damaged or destroyed many business models while elevating others. At this moment, it’s hard to imagine Amazon’s online business collapsing or J.C. Penney’s retail operations being fully restored. Not everything will revert to the mean, and many companies, and especially small businesses, are reverting to not existing anymore.
