My Thoughts on the Wuhan Virus

2020-07-08     thesmartinvestor
My Thoughts on the Wuhan Virus

Singapore confirmed its first case of Wuhan virus this evening. 

The news came as the Chinese government shut down all travel out of the city. 

The spread of the virus may remind veteran investors of the SARS outbreak in late 2002. Times were different back then. The tech sector was recovering from the collapse of the dot-com bubble which was followed by the horrific September 11 attack on the US World Trade Centre.

Today, economic conditions are arguably stronger. 

Different times

I still have vivid memories of my business travels during the SARS outbreak.  

Very little was initially known about the virus. Identifying the virus was problematic. Eventually, it was decided that the best way to detect the virus was to perform temperature screening. 

Soon enough, temperature scanners and health declarations became a staple of airport security. 

With that, arriving at the airport two hours ahead of time was no longer enough. If you were travelling out of Shanghai’s Pudong Airport — like I was back in the day — you had to arrive at least three hours earlier. 

Mine was but a minor inconvenience. 

During the SARS period, Singapore reported almost 240 cases with 33 ending in tragic death. 

The threat is real. 

UPDATED: Hospital operator Raffles Medical Group (SGX: BSL) prepared a Wuhan virus advisory that can be found HERE.

Industries affected

No one knows what will happen from here. 

On one side, I like to think that governments around the world have progressed and are better prepared to contain the virus outbreak. We will find out soon. 

However, some industries may feel the impact. 

Air travel between countries may decline, affecting airlines and the supporting industries such as airline caterers, hotels and travel agencies. Retail sales may decline as shoppers stay home to avoid the crowds. 

But these are all possibilities, not certainties. 

If we put on our investor hats, these will always be risks that we can’t see or control. Incidents such as the Wuhan virus are unpredictable. 

If, how and when markets will be affected is unknown. 

Trying to time an exit from the market would mean that we need to time our entry in again. 

The problem is, of course, you will get your both exit AND entry right. 

That’s hard. And investing shouldn’t be hard. 

So, let’s keep our minds calm and remain focused on the right things. 

If traditionally strong businesses are affected, it could be an opportunity to pick up some shares. We just need to pay attention on the business, not the stock price.

Get more stock updates on our Facebook page. Click here to like and follow us on Facebook.

If you’d like to learn more investing concepts, and how to apply them to your investing needs, sign up for our free investing education newsletter, Get Smart! Click HERE to sign up now.

The Smart Investor is not licensed or otherwise regulated by the Monetary Authority of Singapore, and in particular, is not licensed or regulated to carry on business in providing any financial advisory service.

Accordingly, any information provided on this site is meant purely for informational and investor educational purposes and should not be relied upon as financial advice. No information is presented with the intention to induce any reader to buy, sell, or hold a particular investment product or class of investment products. Rather, the information is presented for the purpose and intentions of educating readers on matters relating to financial literacy and investor education. Accordingly, any statement of opinion on this site is wholly generic and not tailored to take into account the personal needs and unique circumstances of any reader. The Smart Investor does not recommend any particular course of action in relation to any investment product or class of investment products. Readers are encouraged to exercise their own judgment and have regard to their own personal needs and circumstances before making any investment decision, and not rely on any statement of opinion that may be found on this site.

Disclosure: Chin Hui Leong owns shares of Raffles Medical Group. 

Read full post on thesmartinvestor

Related Articles