Don’t Panic

A friend called me yesterday, asking what happened to my holdings in US shares. This is a normal reaction of ordinary people after a stock market crash anywhere.

My answer was, “Well, the shares indeed dropped a lot. But I never doubt the US will still be the most prosperous country in the world in next few decades.”

I always buy shares of public companies like an entrepreneur buying a business. The most important criteria I have been using to screening companies is always their competitive advantage and how wide the moat of the business is. The 2nd criteria is the health of the companies’ balance sheets. I never buy shares of a company carrying debt far more than its equity no matter how good its business looks like. Of course, even with such stringent screening criteria, there are still risks to loss my money. There is no such things as ZERO risk in the investment world.

However, unless human civilization were totally destroyed by a catastrophe, such companies would certainly not only survive, but rise from the dust and become even stronger. I have never doubted about that. COVID-19 pandemic is not that kind of catastrophe for sure. With the advanced medical technology at genetic level, it will be all over within 2 years time. In addition, its death rate is actually lower than 3% if all every infected person has been included in the data analysis.