Mar 29, 2020

Cory Diary : Unemployment Train

What keeps businesses going is cash flow. When one could not operate for weeks or months, the business becomes unsustainable. At current Covid-19 situation the magnitude is a lot worst. To conserve cash, is to close down or cut cost. 

The Virus only hit US hard recently. The impact 3.3 M unemployment. This is no joke. The impact is wide spread and will bring economy down to it's knee and to be exact to a halt. USD being a trading currency has unlimited bullets. In fact the currency gets stronger during this period. It will be good opportunity for China to take this time to help America to help themselves.

Not surprisingly or thankfully Singapore has reserve exactly or unfortunately for such situation that can help us. Once a business collapsed, to recover will be hard, and basically "V-Shape Recovery" is impossible.

The Singapore budget proposed $48B on top of $6.4B to support the economy.  That's about $19.4 K each for 2.8M workers in Singapore. Basically the government is feeding each worker $2160 monthly for 9 months ! which reduced their chances of being retrenched largely and keep most businesses afloat.

Recession is the last thing in our mind. What we are facing is a total collapse. With this budget support, there is good chance the Virus will be stopped way before the year ended. I have faith we will get through this even stronger while many nations without strong reserve will be lagged behind. And the only practical option for them is to print through inflation. This will be ugly.

Personally I feel that the Vaccine will be rushed through so if there is a breakthrough within 2 months the sky would change suddenly. I would stay invested and buy slowly into the market. It will be a game changer for the world after all this is ended. As I sold a few positions last week, warchest is filled back up again with some trading profits. Don't get me wrong, I have dividend goal in mind. -14.6% YTD.


Cory
2020-0329

8 comments:

  1. Cory,

    You stay safe and healthy in Taiwan.

    We are "blessed" in that we happen to be staying at the 2 of the "model" countries when it comes to containment of this Wuhan (I'll be politically incorrect) virus.

    Come to think of it, the ex-4 ASian Tigers as in HK, TW, Korea, and Singapore have done a lot better than some "developed" western countries.

    So much time to prepare, yet most of them did nothing or were too complacent its an Asian problem...

    The way Singapore goes about handling this crisis can be applied to our investing journeys ;)

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    1. Probably many experts don't have full comprehension of the problem till it hits home and the local reacts. This is where WHO comes in but i think they failed badly in getting the right attention and credibility. I would dare to suggest future appointment must be someone with roots connection and where many nations respected medical institutions are closely consulted. This post is an important role and a lesson learn not to have politics in it.

      Taiwan typically northern area has a culture of wearing masks when sick even for simple cough or flu. Is considered unethical not to wear mask in office when sick. So when Wuhan Virus (widely use terminology in local programs) came, sorry I am not against fellow chinese race, I would see about 4 in 5 wear mask. In mrt probably every one is wearing mask. What is interesting is that I don't hear major budget to help support the local industries needed. There are fewer patrons in reality. So I think the key direction is to make sure locally our economics can do ok without going through current constraints like metre rule, mall restrictions etc. Is much tougher for sg because we have alot of dependency on foreign labours. External trades and tourists ban already hits us hard but we have not much choice.

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    2. Just to keep you Excited. Many pretty Taiwanese ladies wear mask in the train and street to avoid attention. So is a cultural thing as well. lol.

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    3. Can certainly afford to use up masks at that rate when you have location production. Not a viable option when you don't and can only have limited stockpile to support crisis use.

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    4. Current President has been on a roll. She is pro independence. Advocate selfself-reliance and promote economic with SE Asia. She has zero fear on China bullying by cutting down Visa approvals to taiwan. Again blessing in disguise as locals adjust to new conditions and attracted more koreans, Japanese and SE asian tourists. Her popularity went down very low but got elected when HK rioted against China totalitarianism. She proof to be right and align to most Taiwanese number one fear. When trade war started, businesses shifted to Taiwan from China creating jobs locally. And when Covid hits, she was swift to ban all china from coming to taiwan and impose strict travels. When Taiwanese travelled overseas for holidays during this periods, social media shamed them for bringing trouble to the nation. There is strong sense of national interests and wellbeing. As for sg limited stockpile, we need to think mask has more critical use that is to tell others I am not "sneezing to you" since many do not know they are sick. So even reusable cloth mask or reuse of mask is sufficient to assure others therefore they do not need to cut down mall entry and meter distancing. Sg should take this step and let sg return to shopping and eating.

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    5. Cory,

      I know. And its even more alluring when their eyes are so pretty...

      You can't mask beauty.

      Shit. Now I miss my Taiwan mei-mei and jie-jie...

      You har!

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  2. If vaccine rush through, it will be dangerous in longer term, it may not be the right one

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    1. You could be right but I aren't expert to comment. However currently as reported there is now many trying to be first. Hopefully we don't be the first guinea pig. There will be first one and others coming up at different time line.

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