Summer jitters

Since I last optimistically posted about the state of the markets a couple of weeks ago, things have taken a turn for the worse. This has particularly affected the US markets. The media have latched on to the nearest suspect, the prospect of a US trade war, as the most likely culprit. I’m optimistic that a sustained major trade war is unlikely to materialise and I’m still keeping my positive medium term outlook for the markets. However, I don’t think it pays to have too much conviction about such things. While no doubt fears about tariffs are a catalyst, the factors underlying the recent market weakness are likely more complex and could be a legitimate cause for concern. Continue reading

MCGN bought

The portfolio has been on a pretty good run over the last month or so. I’m now fully invested, having spent the last of my cash balance this week topping up Adobe Systems and buying a new holding in Microgen.

I’ve been very busy at work recently so am struggling to make much time for the blog. I am gathering ideas to write about for when I  have more time later in the summer. Continue reading

A look back at the Nifty Fifty

The ‘Nifty Fifty’ was the moniker for a set of popular blue-chip US stocks in the 60s and 70s. They were widely regarded as high quality businesses whose growth prospects were so solid that they could be bought and held forever. Well they were until their subsequent crash and underperformance in the late 70s and early 80s. After that, with the benefit of hindsight, the conventional wisdom became that they were an example of a speculative bubble.

I’ve decided to have a look back to see what lessons there are from this experience that can be applied to the current market environment. This has been prompted by some recent commentary. Back in December, Neil Woodford likened the current market environment to the market environment when the Nifty Fifty ‘bubble’ burst, prompting him to warn in no uncertain terms of the impending doom for those holding high quality ‘bond-proxies’. More recently, I’ve read another blog post, which looked at the performance of a few Nifty Fifty constituents since the height of the bubble and found that they didn’t actually underperform over the long term despite the high prices prevailing at the time. Intrigued by this apparent conflict in perspectives, I’ve decided to have a look myself… Continue reading