Tea leaves and entrails

I could feel the uncomfortable prickling of sweat on my back as I peered through the smoke at my host. The scrawny tattooed shaman was excitedly prodding at the embers of the now-extinguished fire and etching out strange patterns in the sand with a burnt bit of stick. Every so often he would look up at me and solemnly utter incomprehensible phrases, waiting for me to acknowledge with a nod. I could pick out a few words from his unfamiliar dialect: ‘candlestick’, ‘shoulders’. However, I did not understand their meaning. My guide had warned me not to question the shaman as he worked. The guide would translate for me later.

After a few minutes of this the shaman began to get agitated. He had carved out a large cross into the ground and was repeating the same phrase again and again, looking up at me with a troubled but imploring expression. I looked at my guide who was also starting to look worried: ‘he says there is a Death Cross. Bad news coming. Maybe the Fed. We must go. Now’

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Yo-yo markets

The market outlook feels like it has improved a little over the last couple of weeks. There has been quite a bounce since the start of the year, the Fed has signalled more accommodating monetary policy and there seems to be progress of sorts in trade negotiations between the US and China. No doubt this is just a temporary high point before the volatility resumes, but it is starting to feel like the worst may be behind us (touch wood).

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Portfolio review: January 2019

2018 was a tough year for many investors, including me. I’m disappointed that my portfolio is down 4% for the year. While this is somewhat better than the wider stock market, it is a weaker performance relative to my benchmarks than I have achieved for the past few years. This leaves me looking for lessons to learn from and questioning whether there is anything about my strategy I should adjust.
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Merry Christmas!

I hope everyone had a delightful Christmas yesterday. I’ve just celebrated the second Christmas after nearly two years of writing this blog. I’ve very much enjoyed getting my thoughts out there and feel that the process has improved my investing. I’m hoping that work quietens down a bit next year, as while I still have lots of ideas for stuff to write about, it’s been pretty tough to keep the momentum going recently.

I’m writing this post off the back of the worst week since 2008 for the US stock market. So much for the Santa Rally. This year we have a Krampus Crash and it seems with my focus on high growth momentum stocks and exposure to US tech that I’ve been on the naughty list. Continue reading

Come on Santa!

While I’m not too worried about the impact that the Brexit outcome might have on my portfolio, it is making my job more ‘interesting’. The result is that I haven’t had much time for blogging and now have two trades to update on: two weeks ago I bought back into Keywords Studios and this week I bought some shares in Diploma. Continue reading

A behavioural perspective

This post is a sequel to one I wrote a few weeks ago about the ‘external perspective’. As I said then, I think it’s important to challenge yourself by looking at investing from different perspectives. I’ve found that this can be a useful way of gleaning insight. I want to follow up my previous post by looking at a more fundamental question for which there are also multiple perspectives: ‘how should you think about your investing strategy?’ Continue reading

Still in the woods…

The market correction we are currently experiencing is not showing any imminent signs of abating. Significant market corrections can be self-fulfilling in nature, as fear leads to falling prices, which in turn can lead to further fear of further price falls. This vicious circle can happen even if the original fears are not well founded, as I believe to be the case now. It’s hard to predict how long the bearish conditions will last. The fact that valuations are still pretty high compared to historical averages suggests there is scope for prices to fall further. On the plus side, an environment of excessive pessimism seems to be building and I can see a few potential catalysts on the horizon that could lead to a sizeable rally in the not too distant future.

I made my scheduled trade last week, selling Accesso Technologies and buying Auto Trader.

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