Selling Intensified Due to Coronavirus

1 Feb 2020

Dear Fellow Investor,

Instantaneous news flow has triggered panic reactions in most world markets as selling intensified due to the spread of the Corona virus.

Our diversified and conservative strategy has  protected us from the worst of the panic.   Our focus on quality dividend stocks/ Reits  gives us income during these volatile and uncertain times.  

Our large holding in Kossan has performed well and I reduced our positions to book some profits.  All it takes is some slightly positive news on the virus to trigger a reversal.  Valuations on Kossan are now over 50 times so we are  treading on thin ice however if more bad news hits at least we can participate in further upside.

I am presently looking at some beaten down blue chips trading at reasonable valuations to take advantage of the extreme pessimism and fear.

Selected technology shares such as Inari and Uchi which we hold also offer opportunity as they are not much affected by the panic. Both pay good dividends and are trading at reasonable valuations.

Our CIO Mr Ang mentioned to me that the Chinese government  is using their hard won experience with SARS and the H1N1 virus to mitigate the  impact of the Corona virus. They are building instant hospitals and  medical research centers are working 24/7 to find a vaccine for Corona.  President Xi does not need parliamentary  approval to take action or spend money. All he has to do is pick up the phone.

There are some positive economic things happening. Not all is doom and gloom.  There is a possibility of Bank Negara lowering rates again.  Infrastructure spending could resume and someone might come up with a vaccine for Corona.  This would boost the airline and hospitality sectors.

President Trump made a positive comment yesterday about what the US government is doing to solve the virus problem. He said it is a small problem.

Invest well and grow your wealth
Bill

Critters of the week are 2 virus free  rats used for virus research.