Weekly Thoughts 16 March 2020

On Friday morning I had a 7 am breakfast in Hillcrest with an Investment Manager from Marriott. We met in a trendy, non-franchise coffee shop situated in a warehouse-type building. I had wanted time with him to go over the results of fund and income research and testing I had been playing with across Marriott’s funds for the benefit of my clients. Naturally, the conversation went to viruses and economics and the global issues we are and will continue to face.

He went over the fact that Marriott, both locally and offshore through their international unit trust funds and FIM Capital share portfolios, don’t own travel, holiday, airline or resource companies, these being some of the sectors that are obviously being hardest hit right now and will continue to be so. He pointed out that the only stores folk in Wuhan province in China are allowed to go to, are grocery stores and the chemist. So consumer companies will still make an income even if their share price drops. And their income won’t drop as far as their share price might. Just imagine the increased income for mobile phone and data companies during these times of lock-down!

This took him to say that now is a buying time for people who can invest, not a time to sell. Markets will recover he said, the world will continue.