Hunkered in our bunker

Right about now, we were supposed to be leaving for Reno, Nevada, to attend the California Water Environment Association (CWEA) convention at the Atlantis Casino Resort Spa. Roni, who volunteers with the organization, was looking forward to hosting a panel discussion and also receiving several awards on behalf of the Ironhouse Sanitary District related to their public outreach efforts. We had made plans to get there by train, taking Amtrak over the snow-capped Sierras as an alternative to the long, boring drive up I-80. It was to be our anniversary treat, a chance to mix some pleasure with the business and enjoy a travel adventure we’d yet to try.

But those plans got derailed, so to speak, by the arrival of the novel coronavirus to our borders late last month. While Roni had booked our hotel suite, we delayed getting our train tickets out of logistical concerns about how we would get to and from the Martinez Amtrak station where the California Zephyr stops. By the time we were ready to commit to the trip, there were growing signs that all was not well in the travel world. Cruise ships and airlines with infected passengers were being grounded, hotels were seeing fewer bookings, and major events that had been scheduled months in advance were being canceled. Ultimately the CWEA board caved to the nationwide trend and rescheduled its convention from the first week of April to the last week of October. So suddenly we find ourselves with a lot of time and nowhere to go… except grocery shopping.

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UR FIRST REAL exposure to the coronavirus, figuratively speaking, came when we learned that people were hoarding toilet paper. Initially this seemed like a prudent response to concerns that the virus was making its way to our country and that we might eventually end up like China, with millions of people quarantined for weeks in their homes. It was still an unthinkable scenario in late February, so we mostly ignored the empty shelves at the grocery store as a temporary situation, happy to have recently picked up a 4-pack.

That changed the day the Centers for Disease Control reported the first appearance of COVID-19 at the community level, that it was being spread to the population through means other than by contact with people who had traveled to China’s Wuhan Province. It was a game changer that incited panic, and for the first time we considered that our much delayed trip to the store to stock up on supplies might be warranted. Normally we turn to Costco for bulk purchases of canned and dry goods, but we had heard tales of long lines and empty shelves, and we already knew they didn’t have toilet tissue or paper towels in stock, so rather than join the crowd at the Antioch store, we turned to shopping locally at Raley’s.

March 13 was a Friday, and as much as we didn’t want to trudge out to the store to buy provisions for what might not be as bad as the media were proclaiming, we much less wanted to make that shopping trip on the weekend when it would be twice as busy. Raley’s is anything but a discount grocer; in fact, its prices are among the highest in our region, but we shop there most of the time because it is convenient to us, being just a half mile from home. In this case, we were counting on the prices to deter the huge crowds that were descending on the bargain warehouse stores like Costco and WinCo. But even our pricey Raley’s wasn’t immune to the panic purchasers.

We found the parking lot jammed with cars, and the aisles full with shoppers if not groceries. All the available carts were in use, and it took a few minutes to rustle up one that had been parked off in the boonies. The paper products aisle was totally empty. The sections for cleaning products and fresh meats were fast on the way to joining it. We made our way through the store, more amused than concerned, before joining the throng of people waiting in endless lines for an available cashier. It took close to an hour from the end of the line to the exit, and we dropped more than $320 for products we rarely buy, just happy to have enough staples to last us a few days.

Contra Costa County had already passed an ordinance limiting public gatherings to fewer than 100 people as a way to help prevent the spread of the virus, but we noted there must have been at least that many people waiting in line at the store that day!

We got together with Glenn’s brother Sean that Sunday, hosting him for an early St. Patrick’s Day dinner of corned beef and cabbage. The coronavirus was the main topic of conversation, and we wondered if he would be successful in his goal of taking a leisure trip to Monterey the following week, considering the virus was starting to spread in the Bay Area and Gov. Gavin Newsom was taking actions to limit exposure.

Those actions became more extreme the afternoon of Monday, March 16, when Newsom issued a shelter-in-place order requiring seniors 65 and older and those with nonessential duties to remain at home. There were plenty of exceptions to the rule, of course, so Newsom’s order became more like a suggestion that people shouldn’t travel unnecessarily, but rather engage in “social distancing” — maintaining a space six feet apart and avoiding crowds. To that end, most public events were officially banned. Conventions, fairs, theaters and restaurants all felt the immediate impact. Schools were ordered closed for a minimum of two weeks, a provision that has since been extended through early May in our county and several others in the Bay Area.

If we hadn’t been panicked before, now we were at least concerned enough about the prospect of being quarantined to make another visit to the grocery store. So it was back to Raley’s on Monday afternoon, where we found the empty shelves even emptier and the lines of shoppers just as long. We topped off our food stocks with some frozen dinners, vegetables and food for the cats — yes, three felines don’t understand or care about human pandemics. With no place left to fit anymore food in our cabinets or refrigerator, we were now at least somewhat confident we could weather the coming COVID-19 storm if we were forced to remain indoors for a few days. Even if we still didn’t have more toilet paper.

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HE BIGGEST PROBLEM with the governor’s social distancing directives is that no one wants to follow them. The second biggest problem is that many professions are excluded from the restrictions, including professional journalists and grocery workers. Let’s see… that applies to all three people living in our household.

Ben has made it abundantly clear that he thinks Newsom’s rules are pointless, given that Ben works at Grocery Outlet and is exposed to just about every pathogen his customers might bring into the store. He and his colleagues have been pushed to the limit during this crisis, working long and irregular hours in an effort to keep shelves stocked and customers calm, although neither has always been possible. He has been returning home each day exhausted, first by the change in his routine and second by rude encounters with over stressed people. While he is fortunate to still have a job right now — many people have already been laid off or probably will be soon if this situation persists deep into April — Ben’s store has already had to reduce hours, as have other grocers. We aren’t worried there won’t be enough food, but the uncertainty surrounding when or if there will be forced quarantines in our community has made people more desperate to over buy grocery supplies, and consequently the stores have all instituted policies of not accepting returns right now.

There is a lot of confusion about what the shelter-in-place rules actually mean. Unnecessary vehicle trips are banned, but apparently the rules don’t prohibit people from taking walks and getting exercise in places where they might be exposed to others. Glenn has been able to continue his regimen of neighborhood walks every other day, and Roni has recently been taking more walks herself. The East Bay Regional Park District has limited activities at several of its parks, but so far the trails at Big Break Regional Shoreline remain open, so we have been lucky to still be able to walk there.

But there are signs the governor’s patience is wearing thin and that stricter measures may be on the way soon if people refuse to heed the guidelines on public gatherings. President Donald Trump has already backed away from his goal of reopening the economy by April 9, looking instead to April 30 amid a rising number of COVID-19 cases in the United States. Newsom has been more proactive through all of this, so local worries that he might institute martial law in the Bay Area are perhaps not unwarranted. We hope it doesn’t come to that.

Meanwhile, we are both blessed that we have jobs that allow us to work from home. Roni has plenty to keep her busy between her work writing for the newspaper and coordinating public outreach activities for the sanitary district. Glenn has seen his part-time hours increase as he approaches a year of working for online community news site Local News Matters, especially as readership increases with the search for coverage of the coronavirus.

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HILE WE SO far have suffered no physical effects from the presence of the coronavirus, the spread of the pandemic has been anything but healthy for our investments. It is not an exaggeration to say that our portfolio is a pile of ashes right now, down even more than the broader markets by virtue of extensive holdings in the energy, travel and entertainment sectors. We expected some drawdowns in a recessionary economy, but nothing to the degree we have seen since the last week of February. And while the federal government’s $2.2 trillion economic stimulus package will ultimately benefit many companies and the people employed by them, some of those firms may not come back quickly or at all.

We are fairly recent converts to the philosophy of dividend growth investing, meaning that you invest your money with solid companies that are inclined to raise their dividends over time, enabling you to build up an income stream that can fund your retirement instead of having to rely on selling shares — especially at times like these. The catch is that you have to be confident in the safety of those dividends, and to that extent not all companies are created equal, as we are beginning to discover the hard way.

In a rapid sell-off like we have seen this month, with the broader markets down more than 30 percent, everything has suffered. Stocks, bonds, precious metals… it doesn’t matter what you own or thought could weather tough times, there has been such lack of liquidity in the markets that people are dumping anything they can just to raise cash, and so we have experienced radical drops in some of the shares we own. Three of our leveraged ETNs were liquidated by their issuing bank, leaving us with pennies on about $3,500 of our original investment. We have seen two dividend reductions in stocks we own, and at least five dividend suspensions or eliminations while companies struggle to conserve cash in the face of the unknown. Ford, Delta Airlines, Apple Hospitality REIT, Alliance Resource Partners and Macy’s all eliminated dividends this month, and we are expecting Carnival Cruise Lines to do the same this week. That’s just what we know about so far.

In the long term we’ll get through this, but it pretty much guarantees that 2020 will be a much less successful year for growing our future income than we saw in 2019. This doesn’t mean we haven’t been actively buying the dips as the markets have plunged. We recently added shares of Home Depot, Lockheed Martin, Westrock, UPS and Uber. We also purchased 100 more shares of Carnival despite all the problems the company has had in relation to the virus outbreak on its ships; even if the dividend is eliminated in the short term, we don’t expect cruising to go away. They’ll emerge stronger once this is behind them. As will we, hopefully!

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EGARDLESS OF WHETHER we have to remain at home for the good of greater society, life goes on. March is the month when we celebrate both Roni’s birthday and our wedding anniversary. While it looks like we’ll be taking a rain check on any travel plans we might have had, we still got to celebrate both occasions in meaningful ways.

Roni’s birthday on March 23 turned into more of an adventure than she had planned. She and Ben hopped into the car for what was supposed to be a quick drive to the grocery store and her office at the sanitary district. They only got as far as the store, however, when the battery in Roni’s five-year-old Corolla decided it’d had enough and died in the parking lot. Roni called Glenn at home to drive over and offer a jump start. Although he showed up armed with jumper cables, there was no spark from the patient.

At this point we might have worried, if not for the fact we’d taken the car to the dealer for routine service in November and been informed then that the battery was close to expiring. That was just before our Panama cruise, and Roni was afraid that the car might not start after sitting idle for nearly three weeks while we left it parked in Hayward. Glenn was convinced the worrying was unnecessary and opted for deferred maintenance on the battery, which continued to work just fine for several more weeks… until it didn’t.

So there we all were, stranded in the parking lot of Grocery Outlet with a dead battery. Fortunately we were just down the street from Auto Zone, so after swinging by the house to pick up the necessary tools, we drove to the store and picked up what we were told was the right battery to fit the car. And naturally it didn’t fit. So after closing the hood on the Corolla for a second time, we returned to Auto Zone, old and new batteries in hand, to convince the clerk that we were not crazy and the batteries really were different sizes.

Luckily they had the correct battery in stock, so the second time we were able to get it installed and the car started right up. We told Roni that she really knew how to celebrate her birthday in style — she’d already gotten a new car battery with free installation from her husband, what more could she need? Apparently a few things.

Glenn had ordered a few gift items for her online, but he had yet to pick up her desired ice cream cake, and judging from the rules limiting commerce to essential businesses only, it wasn’t likely we were going to locate any ice cream shops doing business on this particular Monday afternoon. So we headed over to Raley’s where we had once seen ice cream cakes, only this time there weren’t any — just the plain old bakery cakes we usually do our best to avoid. Not wanting to trek all over town looking for party supplies, Roni opted for a rum custard cake and a half gallon of salted caramel pralines ice cream.

Those turned out to be pretty decent choices, and if they weren’t then Ben had seen fit to pick up a chocolate cream pie with caramel topping and a pint of pecan ice cream from his store (hence the reason he needed the ride there from Mom earlier in the day.) As far as the presents went, Roni received a cute metal garden statue from Ben, some knives and forks from Glenn (more of a family necessity than a present), and a Ninja Foodi Deluxe pressure cooker/food processor/air fryer. The Ninja was something she’d asked for at Christmas, and she was still just as excited to receive it now. Already she has been purchasing accessories in anticipation of cooking in it for the first time — once things at the grocery store get back to normal and we can actually find chicken to cook with.

Our 32nd wedding anniversary on March 26 wasn’t planned to be an extravagant affair even before the coronavirus restrictions, but because most restaurants are not allowing dine-in service right now we had to improvise. We were happy to find CreAsian in Brentwood still open for take-out, so we visited their counter long enough to order a couple of garlic noodle dishes to go.

We’d love it if we wake up on April 1 to discover this past few weeks has all been some elaborate April Fool’s joke perpetrated by the government, but sadly that isn’t likely to be the case. We hope we’ll have better news to share next month. Be safe out there. 

 

Glenn, Roni and Ben