Well the market has certainly woken up to possible risks from the Coronavirus contagion since my last post! We now seem to be in the midst of a full-blown market panic, with the market yoyoing up and down (well mostly down) several percent every day, as investors overreact to news about the virus, its effect on businesses and the government’s response. To top that we now also have to contend with news of a collapse in oil prices, which have fallen almost 30% over the weekend following the break down of OPEC agreements.
All my gains from what had previously been shaping up to be a good year have been eroded and my portfolio is now squarely in the red. Continue reading
I’m sick of viruses. I’ve had more than my fair share over the past few weeks. The beginning of my honeymoon was blighted by Rhinovirus – just a humble cold, though a nasty sore throat coupled with incessant air conditioning resulted in sensation of a shard of glass lodged in the back of my throat for several days. For the end of the honeymoon, I was graced by the altogether more unpleasant presence of Norovirus in some dodgy seafood and am still recovering from the after effects. Unsatisfied with ravaging my physical health, the viruses have decided to go for my portfolio as well, with the outbreak of the Coronavirus epidemic in China halfway through my trip. (Other than that we had a magical time, thanks!) Continue reading
The classic, though now dated, ‘right answer’ to the job interview question, “what is your biggest weakness?” is to say that you are a perfectionist. The thinly-veiled subtext is that perfectionism is actually a strength, though perhaps one that has been taken a bit too far: “I’m just so focused on making sure I get everything right all the time that sometimes I work too hard (sigh).”
Of course, attempting to achieve the unachievable can lead to harmful outcomes for you and those around you. But there is more to it than that. The underlying drivers of perfectionism affect pretty much everyone and can interfere with your ability to make rational decisions. In investing, where so much is about maintaining Spock-like rationality, this is probably one of the most common and important psychological issues investors face.
The stock market seems to be brimming with optimism at the moment. After the assassination of Iranian bad dude Qasem Soleimani led to an extremely short-lived panic on Monday (which only seemed to affect the US market after hours), the markets are buoyant now that further escalation is looking less likely. At the moment I’d guess that we’re probably in for another good year with the likely re-election of Trump and a likely improvement in global economic growth in the horizon.
The much hoped-for Santa Rally did indeed materialise, to round off a decent final quarter of a decent 2019. This is especially welcome following a difficult 2018 for equities. I’m fairly happy with my portfolio’s performance of 33.5%, though this has been achieved in the context of strong performances from the market as a whole. The FTSE 100 was up 12.1%, the FTSE 250 up 24%, the S&P 500 up 32% and the Stoxx Europe 600 is up 23%.
The UK general election has finally arrived and it’s little surprise that the Conservatives have won convincingly. Regardless of your political leaning this is good news for shares and is welcome relief from a December that has been pretty grim until now. Trump’s trade war shenanigans have been keeping investors on their toes over the pond. The medium term outlook is looking positive and I’ve got my fingers crossed for a Santa Rally.
Since I’ve been writing this blog quite a few friends have asked me for investing advice. Being a conscientious sort, I’ve always felt obliged to warn them that I’m no professional and in no place to advise them. However, part of me really just wants to say: ‘it’s all there on the blog. Why don’t you just copy me?’
These days the portfolios of many smart and industrious investors, both professional and private, are no more than a few clicks away. Perhaps taking advantage of this should be part of your strategy? Especially if you have less expertise or time to spare yourself… Continue reading
I’ve started to notice a disturbing trend in the number of investors in my Twitter feed that share the same quality investing philosophy as myself. This was brought quite starkly to my attention recently by some light-hearted mocking and memes of ‘compounder bros’. Other than the mildly uncomfortable feeling that you are part of the group being mocked, the main reason this is disturbing is that it suggests the quality momentum trade may be becoming more crowded. The dot.com bubble and subsequent crash is a sobering example of what might be in store at some point. As I flagged in one of my recent posts, I’ve been thinking a bit harder about whether and how to adapt my strategy to this possibility. Continue reading
After almost half a year of stagnation, during which my portfolio gains from the beginning of the year have been slowly chipped away, it’s starting to feel like we may be due for a decent final stretch this year. The S&P 500 breaking out to new highs seems like a promising sign, though my current optimism is likely also influenced by the boost from Games Workshop my portfolio received on Friday. Continue reading
Another dramatic week for Brexit: another deal, another delay. The news of the possible impending deal has had quite a dramatic impact on the exchange rate and UK stock market since the end of last week. From the perspective of my portfolio these two effects have cancelled each other out to some extent. However, my focus on businesses earning in Dollars means I’ve performed relatively worse than the rest of the market. Continue reading