News about the coronavirus (COVID-19) has been as prevalent as the virus itself. The overwhelming amount of information (and, in some cases, misinformation) has had an impact throughout the country and particularly in financial markets across the globe.
Acknowledging the Efforts of the Community
At Global Masters Fund Limited (GFL), we are not qualified to assess the humanitarian impact of the virus, nor can we say how long the situation will last. We thank the medical and scientific community for their efforts in trying to solve the problem and caring for those impacted. We also acknowledge the leaders in the world who are providing rational, clear guidance to maintain the safety of the population.
Ongoing Analysis and Observations
GFL, through the dedication of our Manager, maintains diligent observation of events and their impacts on underlying revenue, cash flows, net assets, supply chains, etc., of our investee companies. Some of this analysis comes from public updates released to the market, as well as comparison data points from private businesses that operate globally and can provide commentary on various aspects of their ongoing operations. They continue to monitor the situation as it progresses and do not believe that drastic measures are required.
A Long-Term Investment Philosophy
GFL maintains our philosophy to be a long-term investor, believing that our investments over a three to five-year period will provide superior performance. With a long-term view on the current situation, one can gain valuable context regarding the daily movements in the market. For example, during the SARS outbreak between February 2003 and July 2003, the ASX All Ordinaries only dropped 5.35% to 2778.4 in February, and by December 2003, it had risen to 3306.0 (+19.0%). During the GFC, from September 2008 to June 2009, the All Ords moved from 5209.2 to 3937.8 (-24.4%), and by December 2009, it was at 4882.7 (+24.0%). While we cannot predict how long the current situation will last, we can be confident that with a three to five-year horizon, our performance will continue to provide shareholder value. Warren Buffett has been quoted recently: “If you stick around long enough, you’ll see everything in markets,” and the recent turmoil is certainly one to notch up to experience.
Gratitude to Our Shareholders
We wish to thank our shareholders who are taking a long-term view and maintaining their ownership in the company. By avoiding the noise of the crowd and staying calm and rational, the value of our company is preserved. Perspective comes from distance, and we are looking toward the future when this period will be merely a blip on the charts of history.
Scott Barrett
CFO
