What is the “Great Reset” – and how do you invest?

Whether as the result of a Grand Conspiracy or bumbling incompetence, the post-pandemic world could be very different to the pre-pandemic world. Dominic Frisby explains what the “Great Reset” could involve, and how you can invest for it.

In June 2020, the World Economic Forum held its 50th annual meeting, bringing together big cheeses from across the world of business and politics. The lofty theme of the conference: to rebuild society and the economy in a more “sustainable way” following the Covid-19 pandemic.

One man’s “sustainability” is, or course, another man’s taxes and regulation. Nevertheless, the forum was called “the Great Reset”.

"To achieve a better outcome,” said the blurb, “the world must act jointly and swiftly to revamp all aspects of our societies and economies, from education to social contracts and working conditions. Every country, from the United States to China, must participate, and every industry, from oil and gas to tech, must be transformed. In short, we need a ‘Great Reset’ of capitalism.”

Hmmm. I’m afraid the Great Reset is saturated with nauseating slogans that even the tackiest of self-help gurus would deem unusable cliché. “Build back better.” Eeuugh!

How the Great Reset evolved into a great conspiracy theory

As is so often the case when celebrities lecture about climate change, equality or privilege from the steps of their private jet, the riffraff get a little cynical. And as the all-seeing eyes of the internet have exposed countless examples of “do as I say, not as I do” conduct, this cynicism has morphed into something bigger. It is a downright conspiracy, say some.

Following the adage of “never let a good crisis go to waste”, this belief goes, there is a huge power grab afoot (and I summarise) to dismantle democracy, to monitor and control people, and to govern via a group of unelected leaders. In short, what we, back in the 80s and 90s, during late nights at university, referred to as the “New World Order” is now “the Great Reset.”

Just about every action taken by those in charge has only served to confirm the suspicions of the cynics – from basing government policy on flawed data, to the use of masks, supposedly temporary but clearly now permanent. Any sort of criticism of government Covid policy on social media has met with cancellation; endless articles and videos, even by recognised professors of science, were removed. In the purging of wrong think, even US President Donald Trump, arch enemy of the technocrat, got cancelled.

The subject of compulsory mass vaccination has always attracted suspicion and now is no different. You won’t need the vaccination to travel, they – whoever “they” are – promised. Though now it seems you will.

Your author has, as old-timers will know, long-held views as to the evils of money-printing. With every pound the government prints (and the Bank of England printed another £1.48bn on Monday), government reach into the economy extends, and wealth is transferred to the state “in a manner which not one man in a million is able to diagnose” as John Maynard Keynes put it.

Central banking, like mass vaccination, is another hotbed of suspicion, and the relentless “brrrr” of the money-printing machines these last 12 months has only added to the notion that some kind of concerted effort is in motion.

The tech takeover

Meanwhile, while Covid has left many in financial ruin, or dependent on government hand-outs, billionaire after billionaire has doubled or tripled their wealth. Everyone’s favourite tech tycoon, Bill Gates, with his “vaccine agenda”, is said to be at the heart of it all. What some might see as a philanthropic, others see as an underhand attempt at population control.

They also see a billionaire making good while others lose everything. His net worth has gone from $50bn to over $100bn. Meanwhile, he has, on the quiet, become the US’s largest farmland owner and is now bidding to buy the world’s largest private jet operator. To use the parlance of the cynic, he now owns key strategic assets in a world of government-controlled movement and supply chains.

Big tech has made incredible gains since lockdown began. The high street is closed, but Amazon, Deliveroo, Ubereats and the rest of them are thriving. Offices are empty, but Zoom is everywhere, even in hitherto unknown backwaters such as Handforth.

The theatres, cinemas and comedy clubs may be closed, but Netflix is open. Gyms are shut; Peloton has never had it so good. We may not be at work during the daytime, but we are on Twitter and Facebook.

The combined market cap of Microsoft, Apple, Amazon and Google, at over $7trn, is now greater than the GDP of every country in the world with the exception of the US and China. Big tech is more powerful than many governments. It exerts immense political influence and has largely supported lockdowns. No surprise – it benefits from them.

You might take the view that tech has saved us these last 12 months and made life bearable. Others take the view that something else is afoot. “It’s a power grab of unprecedented magnitude” they say.

So that, roughly outlined, is “the Great Reset”. Is it really a thing?

Cock-up > conspiracy

“Never ascribe to malice that which can be explained by incompetence,” runs the old philosophical razor, and one I use to explain a great deal to myself. Perhaps I have too benevolent a view of mankind. But the past 12 months can also be explained as the convergence of floundering governments not knowing what they were doing, while businesses compete for your custom with increasingly adaptable products.

I try to avoid the rabbit hole of conspiracy theory. I find it unproductive. Whether it exists or not, there is not a lot you can do about it anyway. In life, you have to focus on what you can affect, not on what you can’t. As the great Serenity Prayer goes: “God, grant me the serenity to accept the things I cannot change, courage to change the things I can, and wisdom to know the difference.”

But what if you believe the Great Reset is a thing (or at least, something more than just a marketing slogan for a supranational organisation that fears for its relevance in a world where people are falling out of love with such things)?

In that case, the way to play it is, surely, to buy all those companies that benefit from it, especially big tech. Why not buy Microsoft and invest in Bill Gates? Why not invest in Big Pharma? Or Amazon, or Netflix, or Alphabet? The easiest way to do that is to track the Nasdaq. Invesco offers a sterling-denominated Nasdaq tracker: the Nasdaq-100 UCITS ETF (LSE: EQQQ).

Then again, you might take the view that tech is overpriced and has had its day; tech will meet with ever-greater regulation; monopolies will be broken up; alternative platforms will appear – for example Signal challenging WhatsApp or Parler (which I gather has re-appeared) taking on Twitter.

Inflation will reset the price/earnings multiple and investors will flock to commodities instead. As soon as business opens up there will be a flood of money back into the real economy. In that case, a better strategy might be to diversify into a variety of cheap real asset-related businesses with robust balance sheets and little or no debt.

I must confess, I’m divided. I may not buy into the conspiracy theories, but tech seems unstoppable to me. But such feelings usually arise just before it stops.

Daylight Robbery – How Tax Shaped The Past And Will Change The Future is now out in paperback at Amazon and all good bookstores with the audiobook, read by Dominic, on Audible and elsewhere.

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