29th January 2020

There’s a lot of people wearing masks at Changi Airport. I’d asked my wife’s uncle — an experienced airport doctor — about the coronavirus before we left Singapore.

‘How is it different from other viruses?’

‘It kills you,’ he said.

Analysts predict the virus could spread further. A Chinese plague from horrific animal markets. Where live cats get jammed into cages so tight that you couldn’t put a toothpick between them. The noise, yowls, and stench are such an assault on the senses. A visit for the uninitiated can be traumatic.

Terrible treatment of animals is reason enough for more tariffs on China, in my book. Even from afar, the global economy is reeling and bloody-nosed. From the spread of the virus. The deaths. The knockback to production as factories shutter their doors and flights get cancelled.

It’s an awful time for this to happen. Right at the start of the Chinese Lunar Year. When people are celebrating. Travelling. Reuniting with family.

Chinese New Year experience

As I board Singapore Airlines — their Premium Economy lacking any premium after Air New Zealand’s — I reflect on my Chinese New Year experience. Visiting relatives of my wife who still live there. My children profiting from the custom of receiving red envelopes of money for the year ahead.

By the end of the day, they collect up to hundreds of dollars in new Singapore bank notes. Wishes for success in the new year. And shared experiences with uncles, aunts, cousins and even more distant relatives.

And I realise this is a custom Westerners could learn much from.

The reunion time resembles the American Thanksgiving. But it is the little gifts of money from old to young that, as a supporter of financial literacy, I like.

With a windfall of money, children must then think about how to handle it, bank it, spend it, or even invest it.

Financial education

In one home we visited, there was the chance for financial education on many fronts.

A man called Jimmy had a beautiful German music box, circa 1880. His grandfather had passed it down to him. Potential value today at a Sotheby’s auction in London? Over US$1m.

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Jimmy’s music box. Photo: Simon Angelo

Back in the day, his grandfather had obtained it at a much more reasonable price. Today it’s a rare and great asset indeed.

Now, after the passage of time and the forces of demand, beauty, and scarcity, the thing is worth a fortune.

And this is the same process we work on here at Lifetime Wealth Investor.

Have some money? Money doesn’t care whether you’re a kid or 80 years old. It’s just a tool and a force of the human world.

So how do you invest it smart and make it grow?

Where are the good assets that will be worth more in years to come?

Another lesson in visiting all these people across Singapore — many whom I’ve not seen for a decade or more — is that we are all getting older. Life doesn’t dish out what you order, or what you expect. Sometimes you get more. Other times you get knocked back.

You can only ride the waves. Take the trips. And keep an open mind if you want to get somewhere.

So, how is our portfolio faring after the viral crisis? And is there opportunity to buy, top up, or sell and take profit?

Portfolio update

There’s actually been plenty of great news across our holdings. Good companies. Good opportunities. But the virus and market sentiment has knocked many of them back. Except our speculative ‘gold insurance’ pick — which has now reached for the sky.

NewRiver REIT [LSE:NRR] announced increasing occupancy and the strategy on track. Generous dividends have been maintained due to this. And as a result of the progress on the disposals and yield growth strategy.

Of course, UK retail is still under the gun. But we were worried about dividend cover on this stock. So its resilience is proving to take some of the pressure off.

Given current price softness following the virus market melt, this could be time to top up. But do remember: retail these days can be hard.

We are currently researching a property pick which will act as a foil to retail. More about that in coming weeks as the situation becomes clear!

Crest Nicholson [LSE:NRR] is also a beleaguered British property pick now doing well. UK home prices and sales are on the move again with more Brexit certainty.

Yesterday, the stock jumped 7.36%. The company released an earnings announcement. Home completions were down 4% during the last financial, and profit was down. But the dividend was maintained, earnings were within guidance, and management noted improving market conditions.

Looks like this was better than expected or previously priced in. For the full announcement, see here.

It is tempting to sell and take some sweet profits here. Go ahead if you need cash.

But, for me, I’ll be holding. There are reasonable fundamentals. Possibly more upside as Brexit further clarifies. And the projected dividend yield of around 7% (on the current price) suits me just fine.

Presumably if you got in earlier, your yield could be even higher.

But remember: any dampening or shock to the tender British property market could make that income and future prospects more uncertain. I’m still unsure whether the UK will be Europe’s growth engine or sink further into a cesspool of woke regulation and decline.

Greatland Gold [LSE:GGP] has delivered what we expected. During times of volatility, people go to gold. And this speculative, promising gold miner has jumped.

Take some profit if you want to lock in an already outstanding return. Or ride the risk if you want to hold out for more mining development and/or global market panic.

Westpac [ASX:WBC] showed signs of rise when ‘Mack the Knife’ joined. John McFarlane is a veteran banker who previous steered Barclay’s through the UK’s biggest money-laundering scandal.

But, then, anything dependent on China is being pummelled now. Australasia. Our Singapore and Japan picks. Any manufacturing with Chinese sales and links — General Motors [NYSE:GM].

Our new pick, Nikon [TYO:7731], is also down in the Asian panic. But we see long-run upside, especially if the company can continue to hold a leading place in the development of 3D photography.

Right now, this short-term crisis could present a great buying opportunity. I’m surprised at the level of distress. But it goes to show how integrated China is today as the world’s second-largest economy. And how much depends on this worrisome megalith.

The Year of the Rat has indeed started out as one. Buy into that rat at your risk.

But, in this game, to find value and to gain wealth over the long-term, just like with that German music box — you need to enter at ideal times.

Could this be one? We’re adjusting our ‘Buy Up To’ prices in consideration.

 Current as of 28 January 2020 at 9pm GMT.

Next month, I’m pleased to announce a low-cost event for subscribers. We’ll be covering a subject close to my heart: financial freedom. How to achieve it, manage it, and invest for it.

As a Lifetime Wealth member, you can get your ticket for just $19.

Hope to see many of you there.

Regards,

Simon Angelo

Editor, Lifetime Wealth Investor