In order to invest successfully this year, what must be understood and accepted first and foremost is that the world is now in a state of flux for the foreseeable future. There is no going back to the way things were before and just resting there. The pandemic was a historical fault line. That line has been crossed, and there is no traveling back in time. In many obvious ways the world has changed for the worse, but in some key and important ways, believe it or not and whether we can actually see it yet or not, the world has changed for the better. Put in investment terms, the companies that accept this and are ready to change accordingly, they have the best chance of succeeding in the new era.

Take Macau. Morgan Stanley is not very positive, but Macau Secretary for Economy and Finance, Lei Wai Nong is forecasting a strong recovery. To put it dryly, it’s a disagreement between a crony megabank that supposedly is packed with stock picking experts, whose stock is still down 30% from a tech bubble that popped 21 years ago, and Macau’s local government cheerleader. Take your pick on who you are going to believe.

The good news is that the new era has forced Macau casinos to improve efficiency dramatically. Morgan Stanley has pointed out that operating expenses across Macau have dropped by 39% this year, and we can expect casinos to be miserly in stepping up spending again too quickly in a highly uncertain environment like this one. In other words, the competition between Macau casinos has changed from which can grow the fastest in a profligate environment full of junkets, to which can be the most efficiently run in a challenging one where the VIP sector is now a giant question mark.

We should now start to see analyst focus change subtly from cheering on and rewarding high growth numbers, to targeting conservative, responsible management with a clear plan to stay financially lean and healthy. Like a man who has just suffered a massive heart attack and had successful bypass and is now committing to a healthier diet, it’s going to take time, but it’s certainly the right long term direction.