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For those of us who remember SARS, the Wuhan coronavirus is a case of deja vu.
SARS was absolutely horrible.
I am praying hard that this is not going to be as bad as SARS was.
For those who are interested in finding out more, see this short video clip from South China Morning Post:
As a preventive measure, all China passport holders not residing in Singapore are barred from entering or transiting through Singapore.
The same applies to all new visitors with recent travel history to mainland China within the last 14 days.
I believe that this is the sensible thing to do to set our minds at ease so that life can go on as normally as possible for us in Singapore.
After all, deaths from the coronavirus have hit record daily highs.
See:
Mr. Market has not been spared.
While it is unlikely that Mr. Market will be killed by the Wuhan coronavirus, Mr. Market can certainly become quite ill from it.
From a high of 3280 on 20 January 2020, the STI index has retreated to around 3120 which represents a correction of around 5%.
What this means is that Mr. Market has caught the sniffles but isn't bad enough a case of the sniffles to be hospitalised.
If the STI index should retreat to around 2950, we would be in bear market territory which usually means a retreat of at least 10% to 20% from the high.
If we have invested in good businesses with strong numbers, we should not have to worry.
Any big decline in stock prices would be an opportunity to increase our investments in these businesses.
For me, the only thing I have put more money into this year is a AAA investment grade sovereign bond.
Of course, regular readers know that I am referring to the CPF here and the voluntary contributions I have made to max out the CPF annual contribution limit for 2020.
It is during times like this that there might be a greater appreciation of the CPF which is risk free and volatility free.
See:
My 2019 CPF savings.
and
Voluntary contributions to CPF in January 2020.
As for equities, I have yet to deploy my war chest.
Yes, the Wuhan coronavirus is war and I am ready in case the war escalates.
If Mr. Market is sent to the ICU, I will unlock my war chest.
The businesses which are the largest investments in my portfolio (see the related post at the end of this blog) will probably get the most attention.
If we have been building up our war chests, we will be ready to pounce when opportunity knocks.
Having said this, let us all pray for the victims of the Wuhan coronavirus and their families.
"We will ultimately be judged by how we react in times of trouble." - Howard Dean
Related post:
Largest investments updated (4Q 2019).
Bloggy Award
10 comments:
Hi AK
It was this blog article that most of us are waiting for at the moment. We are at war but Mr Market is not bleeding.
I am waiting for your "Buy" moment.
Have a happy and enjoyable day ahead.
YKK
Hi YKK,
Don't wait for my "BUY" moment because it might not happen. ;)
Have your own "BUY" moment. :)
Good day to you too. :D
Any thoughts on the business of Ascott trust(former AHT) will bear an impact?
It was before this moment where they had divested 2 china properties, I believe that it will reduce the exposure to the virus.
However, as this virus affect travel globally their other properties might be affected since tourism from China is huge.
I am still looking to add if price falls further south to hold for the long term for the dividend.
Hi VT,
Like you said, the Wuhan coronavirus could go global.
In such an instance, any business involved in hospitality will be negatively affected.
If we believe that businesses will recover like they did after SARS, then, it is clear what our strategy should be. ;)
Thanks for the headsup AK! Would you be adding more to your largest investments stocks or spread your eggs to other stocks? Do give us a little tinkle here if you can when you are expecting Mr Market to enter ICU ;)
Hi Invest Sg,
I am quite happy with my portfolio right now.
So, no plans to diversify.
Also, I am not good at predictions.
So, your guess is as good as mine. ;)
Hi Ak
are you still holding this China mall reits, crct ?
Seems to catch a big flu virus. Would you be adding to this sick reit ?
YKK
Hi YKK,
If we think that the Wuhan coronavirus is a more permanent than temporary situation, then, CRCT and other similar investments in China are out the window.
When would I sell a REIT?
You might be interested in this blog:
Cutting losses in REITs.
And maybe also this blog:
Sold First REIT to raise funds.
Hi AK,
If you were to talk to yourself, any chance to share what is your current % of war chest in your portfolio? Just a range will do. =)
Hi incantations,
A range?
Hmmm...
Off the top of my head, 25% to 30%.
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