18 July 2020
Dear Fellow Investor,
Reaction to News
Stock markets world wide with few exceptions continue to advance. This is in spite of the onslaught of Covid 19 bad news hyped by the anti Trump mainstream media, massive increases in unemployment, trade wars, sanctions, China US tensions and business disruption.
Adding to the uncertainty is the November 3rd US election only 110 days away. Our portfolios should not be affected much no matter who wins as our core holdings are mainly domestic focused.
For example in Singapore we hold Vicom which is the taxi, private vehicle and bus inspection business. They are net cash and hold 90 % of the market share of the Singapore inspection business. No matter who wins on 3 November, most car, taxi and bus owners will still use Vicom inspection services.
Reaction to news: With the background of never ending bad news, markets continue to advance. No market indicator is more powerful than the reaction to news indicator. If markets advance positively on bad news then things are not so bad.
Why would markets advance on bad news ? The insiders and those who control the markets believe Trump will win. Nothing is worse for markets than if Biden wins. Biden is bad for business. He intends to reverse the Trump tax cuts, increase welfare benefits to those who refuse to work and want a free ride, defund the police, open the borders to all who want to immigrate to America, shut down the oil companies, and focus on alternative energy and nationalize vital industries. He also wants to give free medical care and education up to university level. This is the socialist model which has destroyed Venezuela, Cuba, and North Korea. At some point they run out of other people’s money as Margret Thatcher said. The UK which had a socialist government in the 1970s suffered poverty, misery, bankruptcy and social unrest but was rescued by Margret Thatcher who threw the socialists out and restored a capitalist system . Now the UK is prosperous again.
Recently Warren Buffet bought a 10 billion stake in Dominion Energy, a natural gas business, his first major purchase for his Berkshire fund in 5 years. As Biden is anti natural gas and gas pipelines, why would Buffet buy this company if he thought Biden would win and potentially nationalize or shut down the gas company? Buffet is an insider and knows what is really going on.
Good News
There has been major progress on the virus vaccine by Moderna Inc and Oxford University.
Shares of Moderna Inc. rallied 10% Wednesday, the day after the drugmaker shared that its COVID-19 vaccine candidate produced neutralizing antibodies — thought to be a key benchmark for an effective coronavirus vaccine — in all 45 participants in a Phase 1 clinical trial.
Moderna’s MRNA, +15.93% stock price closed at $75.04 on Tuesday, its second highest in the decade that the company has been in business, after an interim analysis detailing the early-stage clinical trial for its COVID-19 vaccine candidate was published in the New England Journal of Medicine (NEJM).
A potential a vaccine against Covid-19 has been produced at the Oxford Vaccine Group's facility at the Churchill Hospital in Oxford.Credit: PA
I am hearing there will be positive news soon (perhaps tomorrow) on initial trials of the Oxford Covid-19 vaccine that is backed by AstraZeneca and supported by tens of millions of pounds of government money.
The first data is due to be published in the Lancet.
Next Saturday at 11 am, will be holding a Zoom market outlook in addition to my usual market report, Last week my Zoom broadcast failed due to technical issues but next week should be OK.
Bill Wermine is inviting you to a scheduled Zoom meeting.
Topic: Market Outlook
Time: Jul 25, 2020 11:00 AM Kuala Lumpur
Join Zoom Meeting
https://us02web.zoom.us/j/
Meeting ID: 861 2187 6535
Password: 171635
Taiping Zoo and Night Safari. As we can not travel ouside Malaysia Taiping is a good holiday destination. There are 8 main attractions and one is the Taiping Zoo
The Taiping Zoo was established in 1961, and it is known as one of the oldest Zoos in Malaysia. Covering up to 34 acres in space, the zoo features up to 180 species of amphibians, mammals and reptiles. The zoo is also famous for its Night Safari, which is a first of its kind in Malaysia.
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