Winter is coming

Winter normally means good news for share prices. There seems to be an element of this expectation around this year, but at the same time there is quite a bit of talk of overvaluation and the possibility of an imminent correction. I’ve seen several articles warning investors to look out for the signs of euphoria that would indicate the bull market is coming to a close. This is easier said than done! While the mood is probably a bit ‘more euphoric’ than last year, I think there still seems to be a healthy enough degree of scepticism about (and cash on the sidelines) to support another leg in the rally.
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Portfolio review: November 2017

It’s time for another quarterly portfolio review. Overall, the performance of the portfolio has slowed considerably over the past three months and has become a little more volatile. I’m hoping this drop in performance is temporary, but there’s been a strong run since last summer and it might be unrealistic to expect that sort of performance to continue. I’m hoping extending my coverage to US and European stocks may provide some additional firepower.
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The last week and a bit has not been so kind to my portfolio, or the UK stock market in general for that matter, though higher valued stocks have been more severely hit. I’ve no idea whether it’s a blip or the start of a more serious correction, though I have been prompted to sell a number of stocks that hit my stop losses.

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Edgy Businesses

I only invest in very high quality businesses. Part of this is about the business economics, which can be captured in financial metrics: I like businesses that are highly profitable relative to their costs and how much they need to invest in capital. Another more qualitative part of my assessment is whether a business has an edge. Continue reading

Riding the Tech wave

The last couple of weeks have seen a lot of positive news from US tech companies as they report their earnings. Many are surpassing expectations, including the giants: Facebook, Amazon, Apple, Google etc. While there is quite a bit of commentary about how technology companies are leading the US stock market rally and parallels drawn to the bubble, valuations and prospects look pretty promising to me. After buying Alphabet last week, I decided to increase my US exposure with Apple and another couple of purchases of US stocks. Continue reading