CRUX's Ward: Why UK equities will come out of the Covid-19 crisis stronger

The onset of the current crisis has exposed fragilities in the global economy caused by a long obsession with efficiency, to the exclusion of all else.

It is one thing to run 'just-in-time' processes and 'pared-to-the-bone' cost structures but, as happens in all other long economic expansions, there is a whole extra level of risk when balance sheets are run to optimise returns to equity.  In other words, it is bad enough when a business has insufficient capacity to account for a change in conditions, but serious wealth can be lost when management has taken the balance sheet on a joyride to juice the equity returns.  Fortunately, with memories of 2008 still raw, both the policy response and the response of companies has been swift and...