Singapore confirmed its first case of Wuhan virus this evening.
The news came as the Chinese government shut down all travel out of the city.
The spread of the virus may remind veteran investors of the SARS outbreak in late 2002. Times were different back then. The tech sector was recovering from the collapse of the dot-com bubble which was followed by the horrific September 11 attack on the US World Trade Centre.
Today, economic conditions are arguably stronger.
Different times
I still have vivid memories of my business travels during the SARS outbreak.
Very little was initially known about the virus. Identifying the virus was problematic. Eventually, it was decided that the best way to detect the virus was to perform temperature screening.
Soon enough, temperature scanners and health declarations became a staple of airport security.
With that, arriving at the airport two hours ahead of time was no longer enough. If you were travelling out of Shanghai’s Pudong Airport — like I was back in the day — you had to arrive at least three hours earlier.
Mine was but a minor inconvenience.
During the SARS period, Singapore reported almost 240 cases with 33 ending in tragic death.
The threat is real.
UPDATED: Hospital operator Raffles Medical Group (SGX: BSL) prepared a Wuhan virus advisory that can be found HERE.
Industries affected
No one knows what will happen from here.
On one side, I like to think that governments around the world have progressed and are better prepared to contain the virus outbreak. We will find out soon.
However, some industries may feel the impact.
Air travel between countries may decline, affecting airlines and the supporting industries such as airline caterers, hotels and travel agencies. Retail sales may decline as shoppers stay home to avoid the crowds.
But these are all possibilities, not certainties.
If we put on our investor hats, these will always be risks that we can’t see or control. Incidents such as the Wuhan virus are unpredictable.
If, how and when markets will be affected is unknown.
Trying to time an exit from the market would mean that we need to time our entry in again.
The problem is, of course, you will get your both exit AND entry right.
That’s hard. And investing shouldn’t be hard.
So, let’s keep our minds calm and remain focused on the right things.
If traditionally strong businesses are affected, it could be an opportunity to pick up some shares. We just need to pay attention on the business, not the stock price.
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Disclosure: Chin Hui Leong owns shares of Raffles Medical Group.
