I am bashing out this blog as a result of a conversation with a mate which was along the lines that he finds it hard to hold things for the long-term and tends to bottle it at some point and end up selling when a decent Profit has built up; but often this might not be the best approach. Even a bit of a numbskull can figure out that if you continually sell Stocks after making perhaps 40% Profit, you will never ever get gains of 200%, 300%, etc., which are the ones that really transform your overall Returns.
Buying high quality Stocks and then holding them for long time periods has many advantages and of course many drawbacks. The benefits are really around ease of execution and low activity; which of course can lead to lower Dealing Fees and costs, and effort around selecting Stocks and general Portfolio Management activity.
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Non-Finance Book Review: Built for Speed - Bikes, Beers and Balls of Steel by John McGuinness28/12/2019
If you are into Bikes then you must know John McGuinness (and if you don’t, then where on earth have you been hiding?) as he is a true Isle of Man TT legend and I think his number of wins across the different classes only lags that of the true top dog, Joey Dunlop.
This autobiography is very raw and near the knuckle (in other words it is extremely rude in parts and not for the faint hearted or for children !!) and if you read it then it is likely you come away with the view that John is very much from a working class background and his council house upbringing shines through. I guess this explains to a large extent why he comes across in interviews and things as so ‘down to earth’ and he himself admits in the Book that he has not always been the sharpest negotiator when agreeing to contracts to ride for a particular team and he laments that not having a Manager earlier in his career probably held him back a lot. On that subject, it is quite astonishing how little John got paid in the early days and I think he even says somewhere in the book that he would almost have ridden for nothing if it meant he got on a bike and had the chance to compete.
It’s the classic cliché that all us old gits say about how each year shoots by faster than the one before, and that most definitely applies to 2019 as we near the butt end of it. It really has been quite a year with just so much going on in terms of Politics and Economics etc. but also the Markets have turned out incredibly strong and many People will have brought home some utterly stonking gains. Sadly I am not one of them due to some inefficient Hedging, but it should still have worked out a very good year for me financially and to have done so with very little activity and very little Risk really isn’t too shabby. So I’m pretty happy with how things have gone (especially because the Hedging problems can be fixed) and I’m looking forwards eagerly to 2020.
I have been helped by having other sources of Income apart from just my Stocks and without doubt once Readers head into retirement themselves they will appreciate how handy it is to have other Income Streams and it definitely takes a lot of pressure off and means that Stockmarket gains are largely icing on the cake. I am also helped in this regard by not spending much money and ‘living off thin air’ means you really don’t need to be stressing over the Returns you have coming in.
I often think of subject matter that is way too short to justify its own blog, yet at the same time far too long to just send out via a Tweet and also I would like to store such stuff in the Website Archives so it can be retrieved by anyone who wants it; and of course with Tweets they tend to be quite ephemeral and soon lost in the River Twitter. On the basis of that, I am envisaging that this blog will cover a few possibly unrelated subjects but at least they get captured in ‘black and white’ electron imagery for the future.
Stay in control of your Position Sizes This is something I see so often and I know I have fallen into this trap many times myself in the past. It’s a very simple concept where we buy into a Stock, and we quite like it, and we give it perhaps 4% of our Portfolio and then we leave it to do its stuff. Then it turns out that this one is a real beauty and it keeps steadily pushing higher and after a period of time we find that it has grown to be much larger and could even be up to 12% or our Portfolio or more. If we have a very focused Portfolio with maybe just 10 Holdings or something, then a Stock like this could easily grow to be 20% or more.
This is a really good historical book I recently finished reading. I get the impression that few people really know much about the demise of the Russian Tsar Nicholas 2 some time after the October Revolution and they probably are vaguely aware of the story through the ‘Ra ra Rasputin’ Boney M song and they may of heard of Princess Anastasia through all the conspiracy theories. Those with a deeper understanding of the time around the Russian Revolution have probably watched ‘Doctor Zhivago’………
This book is really about the events leading up to the removal of the Tsar from power and then the long period of captivity along with the rest of his immediate Romanov Family. If that was all the book was about it might not have been all that great but in fact it goes much much wider than this and without doubt that is what I liked about it.
The inspiration for bashing out this WheelieBlog came whilst I was reading an excellent article written by Philip Ryland in the Investors Chronicle from 16th August 2019 (the one with the Chameleon/Lizard thing on the cover) entitled ‘Debt by any other Name’ and starting on page 33.
If you have access to the magazine in whichever format, I suggest you have a good read of it and perhaps it is best to read my (hopefully simple) blog first and I also suggest reading these excellent Guest Blogs by Justin Scarborough which are particularly useful if you need to brush up on basic understanding of Accounts (this is to Part 2 and there is a link inside it at the top to Part 1): https://wheeliedealer.weebly.com/educational-blogs/guest-blog-from-justin-scarborough-finance-for-non-finance-people-part-2-company-valuation
This Interview was previously published on Michael’s excellent ShiftingShares website and he has kindly agreed that it can sit on both our sites. He has many quality interviews on his website and make sure you pick up a copy of his FREE ebook – there is a link at the top of my ‘Weekly Performance’ page. You can find Michael’s website here:
www.shiftingshares.com I have had a link to this Interview sat on my Homepage for ages but I am quite confident a lot of Readers won’t have noticed it and that is probably even more true for people who are new to this whole WD silliness. So it seemed a good idea to create this as a Blog so it sits in the Archive and people can go back to it if they fancy another dose at any point in the future. Enjoy….WD
I am extremely grateful to Michael for providing this Guest Blog and making my life easier this week, which has also enabled me to make very good progress on the Stock blog I am working on. I am sure most Readers will already know of Michael as these days he is a huge celebrity in the Private Investing and Trading world with regular articles in Investors Chronicle and SharePad etc.
Michael has a Website and if you go to the ‘Weekly Performance’ page on WD1 you should find an image of his FREE eBook and if you click on that you will be taken to his site. The book is well worth reading and of course I am biased because I was involved in the latter stages of proof-reading and tweaking it. You can find him on Twitter as @shiftingshares. So big THANKS to Michael for letting me share this with WD Readers and I hope you all enjoy it. Cheers, WD.
This is the Second Part in a small Series of just a couple of Blogs and you probably need to read Part 1 first for this to really make much sense. You can find it here:
http://wheeliedealer.weebly.com/educational-blogs/you-dont-want-to-be-over-thinking-things-part-1-of-2 Macro Stuff This is personally a tough one for me. I am fascinated by Macroeconomics and Politics and as a result there is a huge problem that I most likely give far too much weight to Macro issues when it comes to managing my Portfolio. I envy people who just seem to be able to blindly ignore Macro and as much as I try to do it, I just tend to find something in the Outlook that worries me.
I am sure that in much of my scribbles over the years I have touched on the subject of ‘Over-thinking’ but perhaps not really brought it all together in one blog that hopefully puts the subject nicely to bed. The essence is that I get a strong sense that I have spent many many years learning things about Stocks and Markets and Investing and Trading, and all the related stuff, but it is only in more recent years that I have been actively trying to ‘un-learn’ much of the stuff I know and be a lot more basic and elemental in my approach.
Less is More. Keep it simple. Complex is bad. |
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