Coronavirus Market Panic

29 February 2020

Dear Fellow Investor,

Coronavirus Market Panic
February 28 (King World News) – Pierre Lassonde sent KWN the following communication about the Coronavirus market panic:  “Last week no one in the USA cared for a second and now they panic. Has the world changed that much? Of course not. Like SARS, Covid19 will burn itself out over the next 2/3 months. And the world will go back to normalcy. The knock on effects could be serious for thousands of small companies with fragile balance sheets. But it isn’t the end of the world my friend.”

Lessonde is chair of the World Gold Council and former CEO of Newmont Gold.

There has been a world wide panic instigated by the Covid19 virus media coverage   Much of the hysteria has been whipped up by the non stop media coverage. CNN and the BBC lead the coverage showing long lines of fearful citizens cleaning out supermarket shelves of toilet paper, canned soda and bottled water.

San Francisco joined the party by declaring   a city wide emergency when there was not even one reported case.

In my opinion much of the hysteria is politically motivated.  The Western media is biased towards Trump. They failed to get Hillary Clinton elected, implicate him in the Mueller investigation and they failed to get him removed from office via impeachment and they see this virus as a way to get rid of Trump and replace him with a socialist high tax anti- business open borders candidate such as Bernie Sanders or Elizabeth Warren.   

They are using the crises to bring down stock markets world wide, precipitate a recession  which could result in him losing the 2020 election.

There is some positive news from Asian news services who support business.  

The Singapore news service CNY yesterday reported that more patients are recovering than being infected both in Singapore and China.  This was not reported by CNN.  They also reported that  children have a very high recovery rate due to stronger immune systems.  Elderly  and  those with pre existing conditions are more at risk.  

Gold took a big drop last night – more than USD 50 per ounce- which is a good indication of panic subsiding.    The Nasdaq was down over 400 points but closed slightly up. Even the Dow was down over 1000 points but narrowed its losses going into the close.

The political uncertainty in Malaysia is holding the market back but it seems that next week should see some resolution. No matter who wins once the uncertainty is removed  foreign funds should come back .

There is value in our local markets and some beaten down blue chips, quality REITs  are paying handsome dividends more than EPF or bank rates.   I am not forecasting the bottom but we are close.

Invest well and grow your wealth,
Bill

Critter of the week is a silverback gorilla from the Mogo Zoo .Mogo Zoo was in the path of the bush fires near Sydney and the staff was ordered to evacuate . They courageously remained and saved the priceless collection of exotic animals. They did not get caught up in the panic as you must not in the stocks you hold.