11 April 2020
Dear Fellow Investor,
Fear is subsiding
The VIX index which measures fear has dropped over 50% in the last 3 weeks showing that value investors are less fearful and slowly buying beaten down quality US shares. The same is happening across Asian markets. At the peak of the world wide stock market panic and collapse the VIX peaked at 83. Now it is 41. The VIX high of 83 exceeded the VIX high of the 2008 market collapse which recovered in 13 months.
We held our ground during the panic and our portfolios are recovering. In 2008 those who stayed with me recovered all their losses and went on to new equity highs while we were rewarded with dividends along the way. Just as in 2008 I did not anticipate the Lehman bank collapse . This time I did not anticipate the extreme virus market reaction but since we hold quality dividend producing shares we are on board for recovery.
I just learned that three months ago Dr. Michael Levitt, a Nobel prize winner and Stanford University biophysicist, analyzed the number of Covid-19 cases worldwide and correctly predicted that Chinawould get through the worst of the coronavirus emergency well before many public health experts were expecting. And that’s happening now. Dr. Levitt expects a similar outcome in the US. He is more optimistic than the CNN/ BBC health experts.
The full article about Dr. Levitt’s findings is in the March 22, Los Angeles Times – and is well worth
reading in its entirety: https://news.yahoo.com/why-
Stand back and see the big picture
Adapted from David Kuo of Smart Investor Singapore.
This is a classic impressionist painting by French artist Manet and if you view it in an art gallery up close it would be difficult to see the details. If you stand back, the details become clear.
Now there is so much panic, misinformation, fake news and fear it is difficult to see the branches from the trees. It is difficult to even know who we can trust.
That is why I follow the VIX and several tried and true indicators to navigate through the chaos.
Normalcy will return so try to avoid the daily volatility and focus on the big picture. It is not necessary to check the value of your portfolio every hour. If you do that, that means you are too close. What you hear and see is noise.
The fact is that Central Banks world wide are injecting massive liquidity into the markets and keeping interest rates low. They are giving financial support to businesses and individuals to lessen the blow.
The movement control order (MCO) in Malaysia is working. More are recovering than being infected. Some businesses will be opening next week which means more people will be back to work. Even in New York City which is a virus hotspot infection rates are levelling out. New York Governer Cuomo gives a daily briefing and in the last few days he has been reporting less deaths and infections so after he makes a positive report New York traders push up the markets.
Keep safe
Bill
MCO: Zoo Negara needs food donations
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KUALA LUMPUR (Bernama): Zoo Negara needs food donations such as meat, vegetables and fruits to ensure adequate supply for its animals during the movement control order (MCO) period.
Those who wish to donate can contact the zoo via email at veterinar@
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