Week 10: No point in talking about the “C” word! Have Patience for Portfolio.

Background

In the last two weeks, I traveled home to my native country Bangladesh to spend time with my family. I spent the whole time in Dhaka. My sister, who is a dentist in Australia, was also visiting, along with her husband. Over the duration of my stay, I met many of my relatives, friends and some local entrepreneurs. One of them was Atique Hasan, whose team has developed an amazing Addon Bundle for Elementor page builder for WordPress, called Exclusive Addons for Elementor. While I was enjoying the company of my loved ones, worldwide hysteria surrounding coronavirus has doubled, and markets have been dropping almost every single day.

Market Summary

Here are some of the top news items from the financial market that caught my attention last week:

• The Federal Reserve (Fed) surprisingly dropped interest rates by a half percentage point to a range of 1% to 1.25%. It has also indicated that it will keep dropping the interest rate in the coming months to stimulate the economy. They know the economy much better than I do, but the interest rate is so low that they have very little to play with if a recession hits the market in the aftermath of the coronavirus.

• It has been reported that airlines are burning thousands of gallons of jet fuel flying empty “ghost” flights just to keep their flight slots. They should offer me some free tickets!
• China’s overall exports contracted by 17.2% in dollar terms in January and February, more than was expected by economists polled by Bloomberg. However, it’s not all bad, as imports fell only by 4%. China posted a trade deficit of $7.1bn in the first two months of the year.
• Another airline and tour provider went bust this week after the Thomas Cook saga. This time it was Flybe’s turn, despite the government’s intervention. Flybe bosses said coronavirus had made the situation worse, and analysts predict there will be many more airlines to collapse in the coming weeks and months.

My Portfolios

Surprisingly just one out of three portfolios dropped last week. 🙏 My main share trading portfolio dropped more than 5% due to coronavirus and ex-dividend date.

• Metro Bank’s share dropped sharply due to ongoing FCA issues and uncertainty in the financial markets. It seems that BoDs are totally ignoring the emotion in the market, no update, no RNS, at all. In addition to this, Grahame McGirr was asked to leave his new role as Chief Risk Officer, even before he had started. The share price dropped by 24% WoW.
• Meggitt (Lon: MGGT), Legal & General (Lon: LGEN), Lloyds Bank (Lon: LLOY) and EasyJet (Lon: EZJ) shares dropped due to the coronavirus, by more than 5% last week. I am positive about LGEN’s future after its positive earnings report and it is high time to top up the insurer’s stock. Despite the current price drop, it is trading at 61% below the fair value according to Simply Wall St website. At present share price, it is offering a 7% dividend yield.
• Due to a lack of demand for metals and ex-dividend date, Evraz (Lon:EVR) dropped by 17.5%. Until the financial market is stable and productivity improves, I can’t see the price going up anytime soon.
• Royal Dutch Shell (Lon: RDSB) and Smith & Nephew (Lon: SN.) prices dropped slightly, phew!
• Plus500 (Lon: PLUS), Royal Mail (Lon: RMG) and S4 Capital (Lon: SFOR) were the exceptions; all of them improved last week and helped my portfolio slightly.
• Last week, the Sirius Mineral (Lon:SXX) investors backed the offer from Anglo American, worth 5.5p a share. So, that’s the end of the SXX investing. I had a very small position in SXX, so I can’t imagine how all the other retail investors who invested thousands in the company, must be feeling.

My self-invested personal pensions (SIPP) has improved by a mere 1% last week. In this climate, 1% is a huge win- and this was all thanks to BATS (Lon: BATS) and GSK (Lon: GSK)! According to recent trading updates from the BATS, revenues increased by 5.7% in 2019, and analysts are expecting further growth this year. It has also increased the dividend to 52.6p per share from 50.75p. I am probably going to top up BATS in coming weeks, about 6.77% dividend yield is too hard to resist.😋

Freetrade Portfolio

Looking at the situation, I held myself away from investing further in any of my portfolios, including the Freetrade portfolio. It looks like that was a good idea. It was a turbulent week for all, and at the end of the week, this portfolio was up by 1.5%. While Microsoft (NASDAQ: MSFT) and IBM (NYSE: IBM) prices dropped last week, JD.com (NASDAQ: JD) and Advanced Micro Devices (Lon: AMD) price were up by 9.5% and 6.8% respectively.

According to the latest reports, coronavirus infection in China is dropping daily, and with the government’s intervention, the economy will recover quickly. I believe JD.com and other Chinese companies are encouraging their consumers to buy right now (or in a couple of weeks). Additionally, I also think that Disney, Amex, Facebook and Trip.com would be nice additions to anyone’s long-term portfolio.

Other News

• F**cking fund manager Neil Woodford is planning a comeback with institutional investors and wealth managers’ money, just months after losing millions of retail investors. In my last weekly update, I shared a list of Neil Woodford’s previous investments, and they were shocking. I hope that the market won’t forgive him so quickly.
• Following the news of the cancellation of the latest James Bond movie, No Time to Die, until November, already struggling Cineworld’s share price dropped another 20% since Thursday.

• During my stay in Dhaka, I discussed a number of potential projects to diversify my passive income. I am currently working on two projects and hoping to share my progress over time.

Conclusion

In terms of investment strategy, I am sticking to my original plan – just hold your nerve. No panic buying or selling. Coronavirus is no more deadly than any other seasonal virus. The infection numbers will drop and normal business will resume soon. We should stay safe by following doctors’ advice and stop spreading rumours regarding the virus.