An interview of Bill Gates on CNN

28 March 2020

Dear Fellow Investor,

Bill Gates in an interview on CNN Thursday said that if President Trump takes drastic action and shuts down the US as China did infection rates in the US could plateau by end of April. Trump has the legal authority to do so by declaring a national emergency. He is resolute and not afraid to take controversial action and will do so if needed. He does not need approval from congress to do so.

Trump had a call Friday with President Xi to discuss the virus.  That’s a good sign that national leaders are cooperating to fight a common enemy. Perhaps Xi shared with Trump how to shut down China and solve the problem.

Gates mentioned he has donated USD 100 million from his foundation to develop a vaccine/ cure for the Covid 19. He gave a one year to 18 months timeline.

He also mentioned his foundation is working with other biotech firms to find a vaccine/ cure with the current scientific and medical advances  the pace is accelerating.

Gates was cautiously optimistic about discovering a cure.  With the Trump 2 trillion stimulus + a virus vaccine/ cure that would be the catalyst for market recovery.

Some of the world’s most prominent investors are not waiting for a vaccine and are buying quality shares that have been beaten down by the crowd of fearful players.

Shares that a month ago were grossly  overvalued are now undervalued.  The same is true for Malaysia. Even the long term bear, Tan Teng Boo of ICapital is buying beaten down KLSE shares.

The current crash reminds me of the 2008 collapse.  We were holding quality blue chip dividend shares and suffered more than a 25 % drop but we survived by no getting caught up in the panic.  With what cash we were holding we bought Japan Tobacco the cigarette company that  was eventually privatized.  It had a fortress balance sheet, steady cash flow, a well managed simple business and no debt.  They never cut their dividend and steadily advanced amidst the doom and gloom.  Market turmoil was extreme as many banks and businesses failed but smokers continued to smoke and profits continued to roll in.

By 2010 we completely recovered our losses by holding the course and following our quality share dividend strategy the same as we are doing now.  

In the meantime we should be grateful to the Malaysian government in taking strong lock down measures and providing economic stimulus. It benefits all of us. Some of our clients have brought back their children from Australia/ the US and UK.  They have a much better chance in my opinion of survival here than overseas. 

Invest well and grow your wealth

Bill

Critters of the week are our friends at the Bejing Zoo.

Bejing opens public areas at their zoo on 23 March as most zoos world wide remain closed.