First, I hope each of you and your families had a relaxing and safe Thanksgiving in light of everything going on.  Every Thanksgiving I do a long run to commemorate the holiday.  This year’s run was a big wake up.  I quickly realized this run was a bit different than typical…  as I looked back, I saw tracks following mine that had not been there before in the fresh snow. Looking ahead to 2021, what does the upcoming year have in store for the economy. The markets are pricing in we are out of the woods… are we?

What happened?

I live in the Colorado Rockies and spend a considerable time outdoors, running, hiking, backpacking, fly fishing, etc…. Every year on major holidays, my wife and I like to do long runs together.  This year was no different, I was going to do a 15 mile run that basically formed a lollipop on a trail near my house.  Unfortunately my wife wasn’t able to join as the kids were doing online learning so I was going to run earlier in the day with Luna, our Siberian husky, and she would go out later in the day.

I hit the trail around 7:30 on a cold morning (around 8 degrees).  The trail was awesome with a few inches of fresh powder, it was like running at the beach… just a little colder and definitely no swimsuits!  I was the only one on the trail and nobody had been on it since the last snow.  I also didn’t pass anyone else on my way out. It was just Luna and I along with the rising sun over the mountains.  In the fresh snow, I saw some moose and deer tracks meandering through the meadows by the creek.  It was a great run and the trail was spectacular.  I was making great time getting to the top of the ridge before I completed the lollipop and headed back down.

As I was cresting the ridge, Luna began looking behind us.  She then stopped running and dropped her tail and looked back.  She does this when she senses an animal or danger.  I stopped to see what she was looking at.   I noticed that about 15 feet behind us there are now some additional tracks.  I didn’t see anything but to be safe grabbed Luna and then walked towards the tracks to see what they are.

I couldn’t believe it, there were fresh mountain lion tracks (they are very different than dogs as you don’t see claws like a dog), the Lion appears to have been following Luna and I on the ridge and looks like it left when we turned around.  I never saw the lion, other than the tracks, and never heard anything (I never run with music on trails for this very reason).  If it weren’t for Luna I might not have noticed until the lion was close enough to say hi!

It is definitely an unsettling experience to be reminded that you are a card-carrying member of the food chain. With the snow, the mountain lion would have a huge advantage if we got into a confrontation as they are considerably faster and more stable in the snow.   I was very fortunate, this experience could have ended very badly, as opposed to the subtle reminder that I received.

2021 will be the year of the lion

There is considerable optimism going into 2021.   The stock market recently hit record highs as there are three or more vaccines on the way the early part of next year.  Just like my lion incident, there are allot of unknowns that we may not see or hear until too late.

Unfortunately, there is allot that could go wrong.  Applications for U.S. state unemployment benefits unexpectedly posted the first back-to-back weekly increase since July, while Americans’ incomes and savings fell last month. Wednesday’s data indicate the economic rebound is becoming more tenuous amid soaring coronavirus cases, fresh lock downs and an extended deadlock in Congress over a new stimulus package.

Long and short we are far from out of the woods yet. The coronavirus has caused rapid changes throughout the economy that have led to huge job displacement/losses and will likely lead to more.  Think of the shift to remote working, restaurants, taxis, subways, cleaning companies for the offices, etc… are impacted with huge job losses as a result.  Just because there is a vaccine doesn’t mean that the world magically goes back to what it was before the virus.  There are structural economic changes that occurred that will take time to digest and there is no going back to pre pandemic.

The lion is a stark reminder for 2021.  There are a ton of unknowns that could be a mere subtle reminder of risk or much more severe with catastrophic consequences. Unfortunately, at this time we don’t know the full answer to this question.  All we know is that the world is now a different place and the markets are showing considerable optimism that could be misguided with the fundamental economic shifts in the market.   Will the lion give a reminder that we are part of the food chain or take things a bit farther in 2021?