Reminiscent of my Supermax investment during the 2009 swine flu pandemic

Koon Yew Yin 29 April 2020

My current investment in Comfort Gloves during the current Covid 19 epidemic reminds me of my investment in Supermax during the 2009 swine flu pandemic which I have described in detail at the later part of this article.   

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Just like the current situation, the demand for gloves far exceeded supply. As a result, the selling glove price continued to go up higher and higher and all glove manufacturers were making more and more money. All well informed investors were buying Supermax and other glove companies’ shares aggressively to push up the share prices higher and higher.  

2nd largest Supermax shareholder in 2009 

As soon as I saw the swine flu outbreak in 2009, I started buying Supermax shares. As the price for Supermax increased, I sold all my other holdings to buy more Supermax shares until my wife and I became the second largest shareholder as shown in the company’s 2009 annual report. Supermax CEO, Dato Stanley Thai took notice of our aggressive buying, and invited us to visit the factory in Sg. Bulou, Selangor.  

When did I sell all my Supermax shares?

During the swine flu outbreak, our Malaysian Airport Authorities had installed temperature testing equipment for all arrival passengers. Just like during our current situation, all clever investors were rushing to buy Supermax. The daily traded volume and share price continued to go up higher and higher. Supermax share price gained more than 500% within 2 years. As soon as I saw, all the temperature testing equipment at the airport were removed, I sold all my Supermax shares above Rm 6.00, at almost its peak price. 

Covid 19 update 

Currently 3.14 million people contacted the Covid 19 virus and 218,000 people died. These figures are increasing at an alarming rate. It looks like the pandemic will continue until a vaccine is available. Now many scientists are testing the vaccine on animals and it will take at least another year before the vaccine is approved by FDA. 

Why I prefer to buy Comfort Gloves shares?

Due to Covid 19 pandemic, the demand for gloves far exceeds supply. As a result, the price for gloves continues to go up higher and higher. All glove makers are making more and more profit. 

At the meantime, I have been buying Comfort Gloves shares because the company has added 6 new production lines to its 49 existing lines in February. This increased production is most timely to take advantage of the higher glove prices. Among all the glove manufacturers, Comfort has the best profit growth prospect which is the most powerful catalyst to move share price. That is why Comfort is flying faster than any of the other glove makers. 

I believe the demand for gloves will continue until Covid 19 is under control and I should not sell my holdings in Comfort Gloves too early.     

If you are interested to know more about the 2009 swine flu pandemic, you can continue reading. 

The 2009 swine flu pandemic was an influenza pandemic that lasted for about 20 months, from January 2009 to August 2010, and the second of the two pandemics involving H1N1 influenza (the first being the 1918–1920 Spanish flu pandemic), albeit a new strain. First described in April 2009, the virus appeared to be a new strain of H1N1, which resulted from a previous triple reassortment of bird, swine, and human flu viruses further combined with a Eurasian pig flu virus, leading to the term “swine flu”.

The number of confirmed cases was approximately 1.6 million. However, some studies estimated that the actual number could be 700 million people to have been infected by the Spanish flu pandemic. 

The number of lab-confirmed deaths reported to the WHO is 18,449, though this 2009 H1N1 flu pandemic is estimated to have actually caused about 284,000 (range from 150,000 to 575,000) deaths. A follow-up study done in September 2010 showed that the risk of serious illness resulting from the 2009 H1N1 flu was no higher than that of the yearly seasonal flu. For comparison, the WHO estimates that 250,000 to 500,000 people die of seasonal flu annually. 

Unlike most strains of influenza, the Pandemic H1N1/09 virus does not disproportionately infect adults older than 60 years; this was an unusual and characteristic feature of the H1N1 pandemic. Even in the case of previously healthy people, a small percentage develop pneumonia or acute respiratory distress syndrome (ARDS). This manifests itself as increased breathing difficulty and typically occurs three to six days after initial onset of flu symptoms. The pneumonia caused by flu can be either direct viral pneumonia or a secondary bacterial pneumonia. A November 2009 New England Journal of Medicine article recommended that flu patients whose chest X-ray indicates pneumonia receive both antivirals and antibiotics. In particular, it is a warning sign if a child seems to be getting better and then relapses with high fever, as this relapse may be bacterial pneumonia. 

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