Opening up of America

16 May 2020

Dear Fellow Investor,

Opening up of America

Politics are driving the narrative . The hysteria driven media who are beating the covid virus drum 24/7 has given politicians the excuse to lock down America. They have suspended constitutional rights, grabbed power and forced the public to hunker down.

The public is fighting back and defying the government. States are opening up again.   In the below illustration 37 states out of 50 have opened up.  Others are  reducing restrictions.  California had a wakeup call. The governor told Elon Musk to keep his Fremont Tesla plant closed indefinitely because his car business was non essential so Musk defied him,  refused to shut down the plant and said  should the state police be sent to arrest him  he would move his plant to Texas or Florida. The governor backed down.  Musk is back in business and 20,000 workers still have their jobs.

Opening up America. Green states are open while red states are under lockdown.  Orange states are reducing restrictions. In this illustration, the green states are mostly Republican Trump states while the red states are Democrat Joe Biden supporters

Asian countries have made great progress. Infection and death  rates have declined. Taiwan, Hong Kong, Korea, Malaysia, Vietnam, Thailand, China  and Singapore are going back to normal.

The problem is negative sentiment and fear which is holding people back from going on about their normal lives. I was in the KLCC Friday and most shops,  banks,  food courts  have reopened but there were only a few customers. All were wearing masks and I saw one fellow wearing a scary Saddam Hussein gas mask. At RHB the front line staff wore face shields, masks and rubber gloves.  Before letting me in the bank I had to fill out a health screening form.

I spoke with the Phillip analyst in Singapore and he told me the city is slowly getting back to normal.  The SGX remains under a cloud of negativity and fear; however, just as in Malaysia value is emerging.  There was an insightful  article in the Star today by Lin See Yan, a former banker and Harvard educated economist. He talked about why liquidity injections, QE, government support programs and helicopter money will support stocks at least in the short term.

This should keep the ship from sinking at least until the public’s fear subsides.   

Keep safe

Bill

Critter of the week is an adopted pet and why keeping a pet can add at least 2 years to your life.