About qualitysharesurfer

UK based private investor sunlighting as a competition economist

Regime change

We’ve had a lot of important news over the last couple of weeks. Biden has been declared victorious in the US elections, though Trump is yet to concede defeat. On Monday we also had the groundbreaking news that Pfizer’s Covid vaccine is claimed to be 90% effective. These changes have resulted in a lot of stock market volatility. This hasn’t been great for my portfolio so it seems important to take stock of the situation.

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Portfolio review: October 2020

Three-quarters of the way through the year and the crash we had is already starting to feel like ancient history, given how rapidly the stock market has rebounded since then. On the other hand every day life is sadly still far from back to normal. My portfolio has continued to make good progress over the last three months and I’m pleased with performance of 24% YTD.

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Horizon scanning 2: internet wars

A couple of years ago I wrote a post about horizon scanning: taking a big picture perspective on how the economy as whole is changing and what this implies for future growth opportunities. The main theme was how the internet is transforming the economy – while some sectors of the economy are being disrupted, others are growing rapidly. This transformation is the most significant change happening to the economy by far and there’s still a long way to go. From an investing perspective, I think it’s critical to understand as much as possible about who the winners and losers are going to be. So I’m following up on my previous post with a more detailed look at the dynamics of competition between internet-related businesses…

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Signs of trouble?

The pace of my output has slowed considerably in recent months. This is partly just a case of losing a bit of momentum as work and life events get in the way and partly because the Covid-related disruption has changed my routine. I haven’t had my two hours of commuting each day to spend jotting down my investing thoughts and haven’t yet found the discipline to consistently set aside other time. That said I’ve got quite a few half-baked blog posts on the go and hope to be able to share them soon. Anyway, here’s a brief update on my latest thoughts on what’s happening in the markets and my latest trades…

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Inflation or deflation?

Back in March I thought that the prospect of my portfolio reaching new highs again within three months was outside the realms of possibility. This resilience in the face of a very severe economic contraction likely has something to do with expansionary government policies, in particular the huge injections of liquidity into financial markets by central banks. But has this really ‘solved’ the issue? 

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Portfolio review: July 2020

We are just halfway through 2020, but it already feels more eventful than the past few years combined. I’ve had to restrain myself from overusing the word ‘unprecedented’, apt as it is for describing many of this years events. Despite the fastest stock market crash in history and a cack-handed attempt at market timing, my performance so far this year has actual turned out OK at around 13% YTD.

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S curves: watch out for the bend!

More and more of our economy revolves around information technology. A handful of tech giants have experienced unprecedented success in seizing control of large parts of our increasingly internet-dependent economy in just a few years. This trend is only going to increase.

Technology businesses can make excellent investments – many are inherently highly profitable and can scale very quickly. However, assessing the valuation of this sort of high growth business can be challenging.One of the most important and obvious determinants of valuation that seems to get less attention than it should is what the growth profile will look like. Is it likely to accelerate or decelerate and how long will it persist?

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Confused bear

I’m about as bearish as I’ve been on the medium term prospects for the stock market. Like many others, I feel that the stock market isn’t fully reflecting the risks to the economy from the lock-down measures currently implemented around the world. It is already evident that the magnitude of the economic shock is unprecedented. And that’s even if we manage to lift the lock-down measures soon. It seems unlikely that we will to do so fully given the high probability of the dreaded ‘second wave’. In the meantime the economy will continue to suffer. Why then does the stock market seem to be defying gravity at the moment?

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Portfolio review: April 2020

I, like many investors, am glad to be seeing the back of that quarter. The Coronavirus has caused a rapid crash over the last month in most stock markets across the world. This has left the FTSE 100 down 27.9% and the S&P 500 down 22.9% over the last three months. My portfolio hasn’t fared a great deal better at 18.4% down. It doesn’t look like we are quite out of the woods yet.

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