Coronavirus Investing: Strategy Update (April 2020)

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What started out as a handful of cases in China has now developed into an incredible amount of volatility for stock market investors. Unless you were one of the lucky ones who sold out early (and there was a decent window to do so), most others have suffered on paper some pretty hefty losses. Times have changed, and the coronavirus investing strategies have changed, for me anyway.

As we may see on this site, coverage of profit warnings have ceased. Arguably, the pandemic has made analysis of these rather redundant now. In this past month, most companies have now warned on profits, but also with the caveat that they do not know what the final impact will be. The truth is at this stage, nobody really knows. With much of the bad news still ahead in countries such as the US and the UK it remains to be seen just how long the unprecedented control measures will last.

From the profit warning results (never an invested portfolio), these have been hit hard – down around 40% from its best position (excluding dividends). I would expect this to continue to underperform the market. With cashflow non-existent at the moment there will be more companies like Laura Ashley, who were most likely going under anyway before the coronavirus administered the final blow.

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