March 03, 2020|
We are pleased to present to you our monthly market commentary and outlook for the forthcoming month. The ‘stockaxis’ Market Intelligence’ is a quick update on the markets for the month gone by and our view for the next month. Use our sharp and crisp synopsis to continue building your wealth!
Corona virus, which has been termed in technical jargon as CoVid-19, has created a strong negative impact on markets across the world. The virus, which appears to have originated from the Hubei province and specifically from Wuhan city in Hubei, has spread to citizens in 32 countries and recorded 2,622 deaths as per recent reports.
While in the short term, markets are expected to record a downtrend, the past has repeatedly shown us that the impact of these epidemics on the stock markets are often short-lived. We have seen markets gyrate downwards and then recover during the SARS (severe acute respiratory syndrome) scare, the Ebola virus and other such health scares. There are a number of laboratories, universities, etc. in the process of creating a vaccine to prevent further spread of this virus. Besides, there is consensus that the virus is expected to be contained by the last quarter of this year.
The SARS virus outbreak took place in April 2003. The markets touched a low of 924.3 on 25 April 2003. By December 2003, the market had risen to 1879.75, recording an annualized return of 151%.
The impact of the recent Corona virus on the stock markets across the world has been more pronounced especially due to the current high valuations that markets have recorded and the spread of (mis)information via social media channels.
Black Swan-like incidents such as the Corona virus provide long term investors an opportunity to pick quality stocks at very attractive prices, which, in turn, provide superlative returns over the long term. We strongly advice our investors to view this situation as an opportunity to build a strong equity portfolio with top-rung companies which are leaders in their industry group and have the potential to grow exponentially.
We, at stockaxis, are constantly on the lookout for great businesses run by honest promoters that are available at the right price with sufficient margin of safety. Our stringent stock selection guidelines and clearly stipulated entry and exit points make equity investing a ‘rich’ experience for our investors!