You have no doubt been following news of the spreading coronavirus. Whilst our thoughts are of course with those immediately affected by it, our fiduciary responsibility dictates that our foremost consideration is for you, our investors. We do not aim to predict the future and cannot forecast the precise timing of the virus’s spread or the reaction of global stock markets. However, we would like to update you as to how we are approaching this developing story.
We are heartened by the fact that our portfolios are largely populated by well-capitalised, profitable companies, with strong cash flow and robust balance sheets that are sensibly priced. We have negligible exposure to companies with complex supply chains and businesses in travel and tourism. However, all companies will see some impact from disruption to supply of products or lower levels of consumer confidence or changing consumer behaviour. This will be temporary and we have to look beyond this to take advantage of the opportunity.
No one knows if it will get worse before it gets better. It does not make sense to try to time things perfectly because it is impossible. We strongly believe that now is the time to be in buying mode in our portfolios even though we will implement our buying sensibly – i.e. we will not look to do it all in one go.
Lastly, it is worth bearing in mind that the tendency of investors to sell on bad news is nearly always detrimental to long term financial gain. It pays to look through the short-term ‘noise’ and hold on through periods of uncertainty for superior medium to long-term gains.
If you would like to discuss any of the above in more detail, please do contact us.
Slater Investments Limited