Corona Katona: Report From Enemy Territory
Sitting on the tarmac at Kuala Lumpur International Airport inside a hermetically sealed cigar tube with 200 of my closest friends in the middle of a deadly epidemic. Many hacking. Reading about Coronavirus supercarriers. Great. Almost as comforting as watching National Geographic’s Greatest Plane Disasters while taking off. (Cannot get the episode out of my mind about Avianca Flight 52 that ran out of gas circling JFK in a storm and crashed into Staten Island as the woman next to me sneezes.) Wonderful.
Thinking Ambien upgrade.
Maybe I should just bail and head back to the safety of Lunada Bay and watch the sunset?
No! Am I not Corona Katona? Braving even the deadliest of viruses to deliver stable positive returns in all market conditions to my investors? Enemy of negative interest rates? Producer of affordable solar housing? Market champion for the B40 and the environment??
(Ok, it is a stretch, katona is the word for fighter in Hungarian. But let’s see you try to find a rhyme for corona that fits.)
A contrarian at heart, but unlike some contrarians that think the crowd is always wrong, I believe the crowd is sometimes right, but often wrong at critical points.
Is the crowd right now to be overly concerned on Coronavirus? Or is it just the latest example of the mass media run amuck? Hard for me to know. No training or edge on viruses. Always good to wash hands. But the fact I’m flying around Asia in the thick of this thing (while avoiding China and other hotspots) de facto tells you what I think. But could be wrong.
Went against the conventional wisdom in 2003 when SARS was at its peak. Earned Gold status for one flight as a thank you from Northwest Orient Airlines for flying in a near empty plane from LA to HK. 75% discount at the Mandarin Oriental Hotel. Luxurious. Plus got some business done when everyone else was too scared to show up. Did not contract SARS. So, I am biased, just like I am biased against doing what the investment crowd is doing often.
Trying to put Coronavirus in perspective, found the US Center for Disease Control estimated 45 million cases of influenza in the US for the 2017-18 flu season resulting in 61,000 related deaths and anywhere from 292,000 to as many as 646,000 deaths from flu globally that year. As of February 16th, there have been around 69,000 cases confirmed for Coronavirus and 1,700 deaths. Almost all the cases are in China, 500 in Japan and a few elsewhere. Only a handful of the deaths have occurred outside of China.
For Coronavirus the mortality per thousand is higher than regular flu and it seems to spread more quickly which is what has many health professionals spooked. Just based on these numbers looks like a classic over-reaction, but the Coronavirus just started versus the CDC numbers were for a whole year. The jury is still out.
Truth? I enjoy being in the airport when everyone else is scared to leave home. The Quiet. No traffic. Bargain hunter in any market to the core, even cheap plane tickets and hotel rooms get me going. Something thrilling about out-thinking a market.
I cannot recommend flying out to South East Asia just to get the cheap flights and hotels today if you are not already here. Why? Not because you will catch Coronavirus. With flights being cancelled, you may have trouble getting home.
I can tell you normal business is being hammered out here in Asia. Hard to quantify. Temp meters everywhere. New forms asking if you have been to China recently, if so, entry denied. Entire cities in China shutting down. Guangzhou dining out closed. Vietnam airport operator told me business down 50%. Bohol China travel down 50%. China car sales down 20%. Flights cancelled. Borders closing. “Camps” being set up. The global economy is being hit. While I would not want to be this virus, everyone is after it, viruses are tricky, so stay tuned.
Dropped into the periphery of this epidemic before it really got going to close on a Digs SmartLoan. 700 unit Malaysia Air Force employee affordable solar housing project. 9% to investors. Sweet.
The goal of Digs Global is to deliver eco-friendly affordable solar homes in markets that are not producing enough affordable housing. Yes, that is just about everywhere. We started in Malaysia to prove our concept. Five years. Lots of obstacles to overcome. Now proven. Scaling up in Malaysia, then we move to the Philippines, the rest of SE Asia, then globally.
Is Coronavirus affecting our current business? A bit. Chinese group we were going to meet had their flights cancelled. Things moving a bit slower. But our projects are moving forward. Our goal is to deliver high stable returns with low risk in all market conditions which is what you want from an absolute return strategy, positive returns in all market conditions. Disaster. Mass hysteria. Body count. Markets crashing. Our strategy: little impact. Yes! It is working.
Wearing one of those face masks now. At first, I wanted to throw up re-breathing my own exhaust. Plus, not sure the mask really does any good except to fog up my glasses when I breathe, and I refuse to give that up.
Does my 90 day hand sanitizer really work, or did I just get picked off for ten bucks?
But, adding Coronavirus to an already tough job makes our work out here just that much harder, especially in my role which requires international travel. Not welcomed.
Why not just head back to the cliffs of Lunada Bay and chill?
Because I am on a mission.
We have intractable multiple crises ongoing in the world today just when the global financial system slows down. We have proven our model which in one trade battles: 1) Low global interest rates; 2) Lack of affordable housing; 3) Global warming. All fulfilling ESG objectives to boot.
Pretty much investment nirvana really. What else do you want? This is how markets should be used: helping investors and improving society.
So that is why I am sitting on a plane with a stupid mask on my face with fogged glasses trying to figure out how to eat the biriyani chicken rice coming down the aisle.
If things get much worse you will find Corona Katona back in Lunada Bay in order to live another day, chilling with a Corona beer and 90 day hand sanitizer at the ready, but we are not there yet.