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Input 28.02.2020

„Panic is the sudden realization that everything around you is alive.“ – William S. Burroughs

Good morning

The news that the virus did reach and impact Italy and other parts of Europe last weekend, is causing global panic since.

On the financial markets we did reach a point, where valuations on dividend yielding equity are attractive, despite adjusted outlooks on earnings, but especially reflecting dividends and balance sheets versus negative yielding fixed income and cash. We suggest not to sell out, especially since we are not trading, but investing longterm. As example In our long only strategies “Stablized European Dividend Income” and “US Selection Cristalina” we did hedge part of the portfolio already in 2019 and are keeping a cash quota which we can place back at risk once the situation is getting more clear.

More people died from regular fluor natural disasters than has been the case to date with Covid-19, without this having had any significant economic consequences in the past. However, there is a possibility that the economic impact of the virus could be greater than previously expected. One of the reasons for this is that China‘s share of the global economy has grown continuously in recent years. However, at the moment it is difficult to quantify how much the growth slump in the Chinese economy will be. A possible scenario is, that China will only achieve a GDP growth rate of 3% this year – only half as much as originally planned, could result that the global economy is likely to grow by 2.8% in 2020.

1981: did Dean Koontz’ thriller predict the coronavirus outbreak? Readers share extracts from novel which chillingly refers to deadly viral infection named after Wuhan. The book also describes a virus that has an incubation period of just four hours, whereas coronavirus incubates for several days to two weeks. To the disappointment of conspiracy theorists, it turns out that in the first edition of The Eyes Of Darkness, the virus was originally called ‚Gorki-400‘, after the Russian city where Koontz originally wrote the bioweapons lab.

An Israeli expert in infectious disease recommends the authorities dial back a hard-hitting and economically damaging policy and ease public concerns about an illness whose risks seem similar to those of ‚regular‘ flu. The article “Time to Quit Fearing Coronavirus” is interesting reading: https://www.haaretz.com/opinion/.premium-time-to-quit-fearing-coronvi- rus-1.8593923

The Canadian epidemiologist Bruce Aylward, who heads the WHO mission team to China, said that he has seen a steep decline in newly-reported cases compared to the number when he first arrived in China two weeks ago. “I know the challenges with the statistics that come out of China sometimes with changing numbers and what we had to do is look very carefully different sources of information to say confidently this is actually declining“, he commented in this the article https://bit.ly/2SdyOj7 Slowdown of global activities is a fact, but at the same time we must reflect on our personal sustainable behavior; as example what kind of food we buy, where & how we travel, specific use of technology, hygiene in public and private, and many more common sense related processes.

Thankful regards

Bjoern