The Future of Work – Part II

Roughly 70% of office workers are still at home... The companies hiring the most people now... Job location: Anywhere... The future of work – Part II... There's no going back to how it was before... It's a global trend...

Several weeks ago, we wrote about the 'future of work'...

You might remember a trend we shared in the August 24 Digest that was unfolding in suburban backyards... the construction of "work sheds."

School was starting back up, and people who were still working at home (and maybe teaching at home, too) because of COVID-19 restrictions and regulations wanted some private space to get things done... or to send their kids for virtual school while they stayed inside.

Anyone who has kids at home doing Zoom classes, or has heard stories from their friends or family members, knows what we're talking about...

Now, not everyone can afford to build a new building in their backyard, of course. But since we last wrote about this phenomenon about five and a half weeks ago, we've only seen more stories about home-office pods popping up in towns across America...

The general manager of Seattle-based Modern-Shed, for example, recently said his company – which custom-builds these fancy sheds – saw a 400% rise in interest this summer.

And keep in mind... these aren't temporary buildings. People are paying thousands of dollars and are planning to use these sheds for the long term, which says a lot about where we're at as an economy...

Most office workers haven't gone back to their desks yet...

According to a report from commercial real estate and investment firm CBRE Group (CBRE), about 25% of office workers returned to their offices last month.

Now, you can look at this number optimistically or pessimistically. The number of folks working in their office buildings again is rising... and at a faster rate in some places than others. Markets like Los Angeles and Dallas, for example, checked in above the average, according to the CBRE survey.

But in general, "going back to the office" is happening slowly, as Stansberry NewsWire analyst Nick Koziol reported earlier this week...

In New York City, one of the most-impacted cities, only 10% of workers have returned to their offices. While this is still a fraction of workers, it's an improvement from July (when only 6% to 8% had returned). CBRE said it expects the occupancy rate in NYC to match that of the broader U.S. soon.

Some workers may not return anytime soon. Large companies like Google (GOOGL), Twitter (TWTR), and JPMorgan Chase (JPM) have all postponed returns to the office in favor of teleworking. So we may not see a full return to 100% occupancy rates.

The recovery may be slow, but improvement is important. It means that we're on the road back to some sort of "normal."

In other words, we're on the road back... But whether we like or not, we've still got a long way to go.

And in the meantime, every company with a physical office location is weighing what the future of its work will look like in one way or another... for executives, managers, and employees.

In a note to clients, global consultancy firm Bain said it found that roughly 70% of white-collar workers are now working remotely. Bain's note also explained that "work life" has improved for many companies under this setup, and that a lot of employees are more productive and even happier working at home...

By forcing so many people to work from home, COVID-19 has created a time machine of sorts, one that's taking companies into the future of work.

Much about that future looks bright. Teams are more agile, adaptable and better able to prioritize since COVID-19 struck, according to respondents to our global survey. Companies are adopting the latest technology, with the use of collaboration platforms up an estimated 30%. Globally, employee satisfaction as measured by "Net Promoter Score" has increased, too.

These positive results – perhaps surprising to some – have quickly elevated working from home to a credible long-term option for companies and employees. Now, as countries and cities begin to reopen, companies face not only the question of how to return to offices, but whether to do so at all.

Facebook (FB), for instance, posted a job listing last month for a Director of Remote Work. The job location? Anywhere.

Over the next few months and likely for as long as it takes, all the "work at home" – as well as broader "stay at home" – trends that we've seen play out since February and March appear to be here to stay.

Just take a look at the companies hiring the most people right now...

They're all trying to keep up with "virtual" demand...

Retailer Target (TGT), which has seen its online sales take off since March, plans to hire approximately 130,000 seasonal team members this year. Online retail juggernaut Amazon (AMZN), essentially a utility at this point, says it expects to hire more than 100,000 people.

Delivery giant United Parcel Service (UPS) currently has more than 100,000 open positions, and competitor FedEx (FDX) is hiring people for more than 70,000 roles.

And while the pandemic and ensuing shutdowns have crushed certain industries more than others, like restaurants and in-person retail, demand for video conferencing, cloud vendors, and Software as a Service ("SaaS") companies' recurring revenue, is still booming.

These are companies that allow people to do business and attend school wherever they have an Internet connection, even their backyard shacks... For example, when some of our friends came over to our house the other day, their kids tagged along and did Zoom school at our place. (We could have done without the lesson about mathematical equations in the background.)

We also heard a lawyer in line at a breakfast shop the other day say that he almost forgot he had to go into the office that morning after dropping his kid off at (actually in-person) private school. "I was getting used to it," he said about being at home.

That reminded us of the tailwinds behind one of our editors' favorite companies – e-signature software company DocuSign (DOCU)...

The company's documents are admissible in court, accepted in 180 countries, and available in 43 languages... Its product touches pretty much every industry... And it employs a great, capital-efficient SaaS model that you've seen us write about before.

Our Stansberry's Investment Advisory team first recommended buying shares of DocuSign back in October 2019. The position is up 236% today (and it's now a recommended "hold" from our research team).

As businesses dealt with their new realities and found an easy-to-use platform in DocuSign, the company's sales grew 45% in the second quarter of this year, compared to the same period in 2019... That represented DocuSign's highest-ever growth.

During the quarter, the company generated $100 million of free cash flow ("FCF"), more than it generated in its last two years combined.

And just today...

DocuSign CEO Dan Springer said he doesn't see business going away even when things go back to 'normal'...

As Nick from our NewsWire team also reported, Springer believes that...

The "new normal" for working will be a hybrid of teleworking and in-office once the pandemic is over.

Springer said that once people experience all the digital contract services that his company has to offer, they won't stop using them even if, and when, people return to the office.

And he's not the only CEO who feels this way. As our colleague C. Scott Garliss wrote in the September issue of our Stansberry Portfolio Solutions products...

[Microsoft] CEO Satya Nadella stated companies are accelerating the digital transformation of every part of their business. This was the first year that Microsoft's cloud unit saw more than $50 billion in revenue – up 17% in the quarter and up 36% year over year ("YOY").

Scott wrote that demand won't slow down for months, in part because of what's going on with schools and universities today. And of course, anything involving education touches most American families in one way or another...

In Maryland, our children have already completed their first couple weeks of remote learning for the fall semester. (And it's a long five months ahead of us!)

I recently listened to Paul Pinsky, who chairs the Educational, Health, and Environmental Affairs Committee in the Maryland State Senate. He said the state doesn't have enough data to draw up a conclusive plan to ensure children's safety. He suggested a return to the classroom in January at the earliest.

All of this will throw continued support behind the five tech titans and other names that have driven the 2020 market rally.

Demand for technology that allows remote work and schooling isn't going away anytime soon. The longer these trends continue, the more people will need that extra bandwidth to run software and hardware...

As we wrote in the August 24 Digest, when we mentioned that our Investment Advisory team had found another great way to play this trend...

Change, especially changing the behavior of so many people, can be hard... A large number of smart people have said that over time. But once that change is made, it can be even harder to convince people to go back and do something the way they did before.

In this case, a virus forced massive changes in the way we work and do business... instead of an internal company committee or a boss.

We're not just talking about this playing out in the U.S., either...

European countries like the U.K. and Spain have recently reimposed COVID-19 restrictions. British Prime Minister Boris Johnson has even urged Britons to work from home for the next six months if they can.

We're itching to see more people's real faces these days... But like it or not, companies with global reach used by teleworkers or "telebuyers" – which we'll call anyone who buys something online at Amazon or picks it up curbside at Target, and companies that power similar business – still have tremendous tailwinds going for them today.

If you need another example, look no further than our annual Stansberry Conference...

As you've likely seen by now, with the help of digital content hosting and cloud companies, we're going fully virtual this year. And because of that, it's easier than ever before for subscribers like you to be part of our biggest event of the year. More on that below...

Still Fed Up

Today, we bring you another Stansberry Conference classic...

At our conference last year in Las Vegas, former Federal Reserve Bank of Dallas adviser Danielle DiMartino Booth, author of Fed Up: An Insider's Take on Why the Federal Reserve Is Bad for America, took the stage and spilled the beans about what she learned while working with the central bank...

Booth shared particularly prescient insight on current Fed Chair Jerome Powell. She talked about why he would prop up the bond market at the first sign of crisis (which happened this past March)... and described her expectations for a recession in the near future, based on the inverted yield curve action of late 2018 and early 2019.

That's when interest rates on short-term bonds had become higher than the interest rates paid by long-term bonds. The last seven times this inversion has happened, a recession has followed as soon as the next several months to as long as two full years, as we noted in a October 2019 Digest. Booth told attendees of our conference last year...

We're operating today under the assumption that the yield curve doesn't matter, but we all know what they say about assumptions.

You can listen and watch for yourself here in a full replay of Booth's presentation...

We bring this up today not only to share that the inverted yield curve indicator was right again, but also to remind you that this year's Stansberry Conference is just a few days away... It starts this coming Monday, October 5.

As we said, the conference is fully virtual this year. We'll miss in the in-person experience, of course... but it also has never been easier for you to hear from our all-star list of special guests and our crew of editors and analysts.

This year, we'll welcome bestselling author Michael Lewis, former Fox News host Trish Regan, former Texas governor and Secretary of Energy Rick Perry, Empire Financial Research founder Whitney Tilson, and many more who will share their latest actionable investing ideas.

If you haven't grabbed your ticket to the conference already, click here for more information. Today, you have the chance to get a special gift worth $799. And stay tuned to the Digest next week for live updates from our first-ever fully "virtual" conference.

New 52-week highs (as of 9/30/20): Lennar (LEN) and The Trade Desk (TTD).

In today's mailbag, feedback on yesterday's Digest, more kudos for Dan Ferris, a new Stansberry Alliance partner shares his success story, and thoughts about modern humans versus those from ancient societies. What's on your mind? As always, e-mail us at feedback@stansberryresearch.com.

"I was surprised to see that neither party nor President seem to have a long impact on the stock market. However, we have never been so close to a socialistic government as today and that may change the direction of the market." – Paid-up subscriber Rene F.

"Today's Democrat Party is a far cry from the Democrat Party of the Truman or JFK years. It has moved so far left it left me years ago." – Paid-up subscriber Jim C.

"Dan wrote a thought-provoking Digest about the contemporary imperative of knowing and being correct, with little [stock] being given to those who say they do not know.

"To admit to ignorance is different from being an ignoramus. Such an admission can be a sign of honesty, naivety, even humility. Such traits are unpopular at present which is very disappointing, particularly when certainty of being right becomes a quasi-religion or cause to pursue. Any mention of global warming/climate change can illustrate the kind of intellectual arrogance that results from being certain about something which is unknowable.

"Dan has elevated his writing and Investor Hour musings to a high level which makes them doubly interesting." – Paid-up subscriber Colin S.

"Hi Dan and Stansberry crew, I am a new addition to the Alliance family and I have been very busy trying to catch up on all the good reading and information out there.

"I started with [the] Retirement Millionaire program and got some great ideas, but I didn't really hit my stride until I started following Steve, Dan, Doc and especially Dave Lashmet. I am now sitting on some great gains in my portfolio, and I sleep soundly at night confident in the strength of my holdings and my game plan.

"Thanks to you guys and a little of my own hard work and sweat, I just paid cash for my dream home in beautiful Santa Rosa Valley, CA. I had my best year in 2019, thanks to Stansberry's amazing research and strategies. We managed to pay off our Beach house and another rental property. I will never carry debt burden again, unless I can use it to my advantage.

"Even though I am approaching retirement age, I own several businesses and am having so much fun building wealth and encouraging others to do the same, I doubt I will ever actually retire. Keep up the good work! 2020 is shaping up to be a great year too – but different!" – Stansberry Alliance member T. Pickett

Corey McLaughlin comment: We love to hear this. Congrats, and thanks for sharing. We're glad you've enjoying your Alliance partnership already, and we look forward to hearing more from you.

"I had to write a response to the reader who wrote:

After most of my interactions with flesh and blood over the past 15-20 years, I'm left to wonder if I'm that impressed with AI or rather our standards as Humans have been lowered even more than I had imagined. – Paid-up subscriber Tim H.

"Sorry, Tim H, but I have to agree with what you implied. The Ancients put us Moderns to shame. Sure, we have fancy technologies that allow us to measure and label the physical universe in ever smaller particles. But labeling an object does not imply we understand it.

"We live in a reality of 'dots,' but few connect them. If a proposed connection runs contrary to conventional thinking, the Connector is quickly shut-down. At the end of the day, we Moderns excel at labeling what we see, but don't grasp what it could mean. More sobering, I don't see students encouraged to even ask, as questions slow down efficiency.

"In contrast, the Ancients were open to their own observations, and could see patterns where we see chaos. To think, the Egyptians did neurosurgery. The Chinese, Japanese, Koreans, etc. grasped how to work with the body's meridians to activate its self-healing.

"We can embrace Newton's observation of gravity, easily illustrated with algebra. But today, few in medical science venture into the murky health implications of quantum physics and the holographic universe. What do they imply about our medical understanding of the body?

"This may sound cynical, but the narratives about projected science achievements make for better storytelling than truth. We are missing some key concepts here... No surprise Big Pharma is reluctant to expose the negative drug studies. The statistics can be dismal, but the miracle is that they work, at all. 'Gene editing' is another nimble term to predict how we will delete 'Disease X' from the genome and the population. But suppose whomever came up with that genome had something more complex than our mighty minds imagine? From what I read, this notion seems so wildly simplistic that it should have been pitched to Mattel as a preschool toy.

"Humility may be the most useful teaching about 2020. To what end do all these advances mean if we are content to remain in the spiritual doghouse? In the meantime, do we dare discount any blessing, any gift horse in the mouth?

"Few of us have sufficiently thick skin and the staggering stamina to take on the corruption, materialism, and PC decadence that has infected our education, entertainment, science, and medicine." – Paid-up subscriber Peggy F.

All the best,

Corey McLaughlin Baltimore, Maryland October 1, 2020