It was on an evening laced with hope at the dawn of a new decade when the first frantic news reports emerged. On New Year’s Eve 2019, as folk around the world gathered together to celebrate, a deadly virus was on the attack.

Most people remained blissfully unaware of the impending calamity and how quickly their lives would unravel. By mid-April 2020 the coronavirus pandemic had reached almost every country in the world.

Indeed, most countries were caught off guard by the first major pandemic of the 21st century. But why? As pandemics have historically been prevalent in human societies, many lessons could have been learned. (see Figure 1).

But in the modern era, huge medical advances have perhaps convinced us of our invincibility.  This might explain the complacency and lack of preparedness that enabled the coronavirus to spread so fast and hit so hard.


Figure 1. An outline of significant pandemics in human history; more than ⅓ of them happened after 2008
Source: FastCompany

Not everyone was caught blindsided by the coronavirus outbreak.  Back in 2015, Bill Gates publicly warned of the danger of a human respiratory pandemic transmitted via aerosol droplets. Sadly, his warning went largely unnoticed. So today, as COVID-19 ravages through our societies, we must surely accept that we ignored the warning bells and were woefully unprepared, but also that pandemics are an entirely predictable part of life rather than an extremely rare and unlikely event.

With the widespread misuse of antibiotics, accelerating climate change and rapid urbanisation, pandemics of the future will likely become more frequent and severe. We as a species need to be far more prepared for this continuous onslaught.

History has also taught us that those who prepare well before pandemics (or any crisis for that matter) tend to cope better and bounce back faster than the rest. For example, those wealthy preppers who escaped New York to their rural retreats before it became the Ground Zero of COVID-19, are unlikely to have been infected and will thus emerge in good health, ready to tackle the challenges ahead.

Equally, people who hold investments in resilient assets will not see their net worth or income adversely affected by the shutdown and stay financially sound.

What does crises teach us?

Be properly prepared. It is as simple as that.

Being prepared (physically, financially, mentally) before a crisis means that you will act decisively and outlast others. In a world of dwindling resources, being prepared will expand your influence and power, thus maximising the chance of you emerging as a winner.

The way to be financially prepared is by owning bulletproof assets that can withstand crises and thrive in both favourable and adverse market conditions.

How to identify bulletproof assets?

Bulletproof assets come in a broad range of flavours yet all share some defining characteristics. Finding them can be a long and uncertain process, especially to the uninitiated. Consequently, there is plenty of difficult homework to be done before commencing a search.

1. Differentiate between investment and speculation

Whilst an entire volume or more could be written about the difference between investment and speculation, it is sufficient to say that any remotely rational human should choose the former over the latter. Investment, made with a cool head after a rigorous analysis, should largely eliminate the risk of permanent capital loss. Whereas speculation has a high risk of such loss.

Essentially, investors must understand the underlying potential of any given proposition before releasing cash. Basic stuff like “How does the company make money?”, or “What is on the balance sheet?”, are critical questions. Successful investors remain cynical and factual during the due diligence phase, before committing.

A get-rich-slowly mentality, where you, for example, earn a 10% return year after year is far more rewarding financially and psychologically than committing to a seemingly clever hedge fund that promises you 100% gain but could be a black hole for all your money within a year.

2. Choose your geography wisely

Given the difference in global economic development, it is not surprising that developed nations are faring better than developing countries during the current pandemic. What is startling though, is the difference in performance among developed countries.

For example, despite being the global leader in pharmaceutical development, epidemiological research, and economic development, the US healthcare system was quickly overwhelmed by the virus and it suffered the highest infection and mortality counts in the world. Whereas South Korea, a tiny country that is still technically at war with its northern neighbour, returned to business-as-usual less than two months after the initial outbreak.

Consequently, simply saying “I will invest in a rich country” is not a strategy. You will need to systematically analyse the various factors that contribute to how a country will respond to a crisis, before making a decision. The ultimate goal is to choose a country that is well-managed so that it performs efficiently during both good and bad periods. See tabulated summary below:


Factor Significance

Political stability and neutrality

This ensures that the country is both free of turmoil domestically and internationally. The key traits to look for are low inequality, freedom of the press, a high proportion of the population in tertiary education, and declared neutrality.

High economic and cultural development

This means the country has a high level of economic and social development which improves the living standard. Equally, the population has reached a sufficient level of advancement to follow the advice of the government during the crisis to collectively achieve the desired outcome.

An advanced healthcare system with universal coverage

Such setups enable a country to deal with pandemics quickly and comprehensively in order to contain its spread.

Prudent governance that respects the rule of law

The rule of law enshrines and protects individual rights, thus giving investors confidence in placing capital or obtaining assets in the relevant jurisdiction.

Monetarily and fiscally conservative

Such a level of prudence ensures budgetary balance, therefore improving public finance solvency and health. This gives governments the financial firepower necessary to manoeuvre during emergencies.


It is evident that small countries like Switzerland, Liechtenstein, Ireland and Japan score well on these factors, unlike their larger and more powerful counterparts.

3. Resilient business models

Most investment professionals advocate for portfolio diversification through the use of counter-cyclical assets. The rationale seems to be logical on the surface: if you only own a sunglasses company then you are out of business when it rains. Equally, if you only own an umbrella company then you do not have customers when it is sunny. By owning both, you are hedged under both scenarios.

The problem with this approach is that your overall portfolio makes very little gain throughout the year as the value of one asset is negatively correlated with the other (see Figure 2). This means the increase in the price of one invariably leads to the depreciation of the other and the cancellation of any gains. As a result, we need to seek a new paradigm that allows for the creation of a business model which performs equally well, come rain or shine.


Figure 2. The net cancellation effect of having two negatively correlated assets in a portfolio.
Source: Slideplayer

Flexibility and adaptability are key features of resilient business models. Specifically, how quickly can a business alter its operation and adapt to new challenges? Here we consider a few companies to distinguish the difference between a resilient business model and a temporarily advantageous market position.

  • 3M (temporarily advantageous position, but no sustainable advantages) – a leading US safety facial mask manufacturer that turned out to be one of the key beneficiaries of the COVID-19 pandemic. However, its revenue is likely to drop significantly once the current wave has passed. Equally, the competition will intensify in this space as mask manufacturing has low entry barriers. More importantly, there is no guarantee that the next pandemic will be respiratory and masks might not even be an effective form of protection.
  • Uber (no advantage, no resilience) – the famous ride-sharing platform is performing poorly during the current pandemic for a simple reason: people have stopped going out. As a result, the demand for Uber rides has all but collapsed. Fortunately, its food delivery arm UberEats is seeing rising demands as people are confined into their homes and gradually become bored with cooking. Unfortunately, UberEats remains a tiny revenue contributor to the overall business and thus as of now, its business model resilience remains low.
  • Tesla (high resilience, driven by managerial creativity) – known for the sleek and technologically advanced electrical cars it produces, Tesla quickly repurposed its production lines to produce ventilators for NYC during the pandemic as it saw the change in demand. The agility and flexibility of the business model ensured it could weather the current storm with ease and thus maximise return for shareholders. It is no surprise that its share price has more than doubled since the drop in mid-March. Furthermore, Tesla’s AutoPilot functionality has the potential to make cars truly autonomous, therefore becoming resistant to human-induced failures or shocks.

4. Undervalued assets

Purchasing an asset at a price that is below its intrinsic value confers an enormous margin of safety to the investor. As a result, it should always be the investor’s goal to seek out businesses that are undervalued.

During a crisis like COVID-19, it is important to remember that companies with resilient business models, like Tesla and Amazon, tend to be fairly valued or even overvalued; often because of the emotional impulse of investors’ to find safety. Consequently, the strategy should be to think counterintuitively and look for businesses with resilient models in less crowded sectors, whose valuations have contracted due to temporary shocks to the broader economy rather than because of any inherent weaknesses of the business.

Here are a few areas to look for resilience, hidden from most investors’ eyes:

  • Hospitality – in general, this sector has all but disappeared as a result of social distancing. However, there are a few companies that rapidly transformed themselves to cater to demands in new areas. For example, Le Bijou, once a provider of luxury short-term accommodation for high-end tourists and business travellers, instantly leveraged its advantage of offering a fully-automated accommodation without human contact and turned itself into a quarantine apartment provider that delivers a top-end self-isolation experience for guests.
  • Transport and logistics – this sector has also been severely hit by the pandemic as people are no longer travelling. However many investors are focusing only on half of the picture. Granted, the passenger number has been substantially reduced since the onset. Yet freight traffic is rising exponentially as countries around the world need vital supplies now more than ever. In fact, Heathrow Airport’s cargo traffic has risen 500% in March alone, indicating the robustness of its business model.
  • Food and beverage - like hospitality, this sector traditionally depends on footfall traffic and given the prevalence of social distancing and mandatory government closure, it is being severely impacted. However, some players are changing their business models overnight and began partnering with UberEats and Deliveroo to deliver their products to the customers. This revenue stream may not make up the fall however it could provide a lifeline to ensure survival.
  • Rural property – traditionally this is a market segment marked by low valuation and liquidity due to increasing urbanisation. However, COVID-19 is about to change that. The pandemic has highlighted the benefit of having a secure retreat in sparsely populated locations during periods of social upheaval. Equally the lockdown has demonstrated the complete feasibility of remote working for many and thus being centrally located is no longer as much of an advantage as before. Watch this space and expect an uptick in transaction volume and price once the pandemic is over.


5. Great financial strength

Have you ever played PUBG? It is a battle royale first-person shooter game where you are parachuted onto a desert island with 99 other players and the last person standing after having taken out every other player wins. Volumes of literature have been written about the best strategies and tactics with many schools of thought emerging. However, the most effective tactics remain to be the hideaway method: essentially hide in a secure location with your weapons until most of the other players have finished killing each other and then emerge to try to finish off the rest.

The lesson here is that having the financial firepower to outlast the crisis (and your competitors) is a sure way to survive and thrive, investing the accumulated cash to follow the mantra of Warren Buffet and “buy when there is blood on the streets”.

Several factors contribute to the financial health of a company:

  • High profitability
  • Strong cash flow
  • Not overly-leveraged (ideally with no external debt)
  • Dividend-paying (financed through earning rather than debt)

All the factors above boil down to two equal forces: the ability to generate cash and the ability to burn cash. The key here is to look for companies with sufficient cash reserves to stay afloat for a minimum of 12 months should there be an economic meltdown.


6. Competent management

Ray Dalio, the famous investor who ran the largest hedge fund in the world, predicted a future paradigm shift where two only types of companies will thrive:

  • Simple "meat & potatoes" companies with strong balance sheets.
  • Those who respond creatively to crises.

Both of these types rely on competent management to steer through crises. In the former, management stability is key to ensure no fatal mistakes are made, whereas, in the latter, management innovation would be the critical link between life and death.

Case study of bulletproof assets

In this section, we will review some examples of assets that fit the criteria outlined above and are truly “bulletproof”.



Le Bijou Bond

Impact Healthcare REIT


What is it?

To provide loan capital to Le Bijou, a leading luxury property-tech company in Switzerland to expand its product offering

To acquire and lease out healthcare properties (in particular residential care homes) in the UK

A global leader in the design and manufacturing of electric vehicles and electrical energy solutions

Why is it bulletproof?

During normal times, it serves the growing Swiss luxury travel segment, which has shown a double-digit annual growth rate over the past decade.

During extraordinary market conditions (like the COVID-19 pandemic), it can rapidly pivot into an autonomous apartment for individuals wishing to take refuge from the outside world as it can be operated with little human interaction.

Residential care for the elderly is a core demand in society, especially when faced with an ageing population. As a result, there will always be custom for high-quality residential care properties.

Impact Healthcare vigorously screens care operators to ensure high service provision quality, robust financial strength as well as long lease terms (20 years), and upward-only-inflation-linked rent review to maximise shareholder return.

Tesla is long regarded as the gold standard in electric vehicles and energy solutions.

During normal times, it serves the affluent mass market by providing highly sophisticated electrical vehicles at affordable prices.

During a crisis, it can rapidly re-engineer its production line to produce critical supplies at short notice.

Furthermore, it invested heavily in production and end-product automation to minimise human input. It also possesses a growing electrical energy solution division, which is far more recession-proof and fits the trend towards greater renewable energy production to combat the effect of climate change.

Return types

Fixed income, coupon paid every quarter


Capital gains

Capital gains

Historical return

Around 7-14% per year

Around 6% dividend yield per year with 1% of capital gains

+3500% since inception in 2010


The shares are traded on an internal marketplace platform

High, as it is publicly traded and more susceptible to irrational sentiments

High, as it is publicly traded and more susceptible to irrational sentiments

Capital risk

Little, as it is not publicly traded and is not a subject for speculative trades

High, maximum drawdown around 45%

High, as a loss-making growth stock, its valuation is subject to great volatility (+/- 10% daily is normal)

How to invest?

Visit Le Bijou’s investor page and apply

Contact your stockbroker or register with one

Contact your stockbroker or register with one


In conclusion

Crises can strike at any time with little warning and we often do not realise how inadequately prepared we are until it is too late. So only by investing in assets that are bulletproof do investors withstand the financial shocks of future crises and emerge stronger and more resilient than before.

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