Stage 5 - 2015 to 2018 - Well into the Bull Run
Here comes The WheelieDealer. More sophisticated Trading Tricks and focus on Psychology. Enforced Discipline.
This Winter has been such a drag - being a Wheelchair user I really don’t get on with Cold and Wet and the best solution I find is to go into my Winter Hibernation mode and try to ride it out - but this year it is definitely been testing my resilience. The idea of a particularly Cold Snap isn’t something I find even slightly appealing and it looks like a week to hunker down and perhaps I won’t have any excuses now to not get on with reading that Robbie Burns ‘Trade like a Shark’ book……..
Last week was very uneventful for my Stocks - the UK and Spreadbet stuff was up a tiny fraction and the mainly US Unit Trusts were down a tad so the net result was a minuscule gain - but at least it paid for my Pub Lunch on Friday. So a Flat week then.
Stage 4 - 2011 to 2015 - Post Credit Crunch Recovery
‘Retirement’ and Learning to Fly. Experimenting and codifying an Approach.
It never ceases to amaze me how quickly things can change and from a period of continual and rapid falls in the Markets, we had a strong rebound last Week as we picked our battered bodies up off the canvas.
This was a very welcome relief cos I really was getting fed up of being punched hard in the face and the whole tone of the Market just seemed to almost instantly do an about-turn and things bounced back very strongly.
From a situation in the Week before where my Portfolio had got well and truly spanked and gone deep into Negative Territory for 2018, last Week I recovered 4% which is a really big Gain and this got me back into Profit for the Year - I am extremely relieved about this but of course things can change fast as we all know although my sense is that the Major Bull Run is still very much intact - both for the Fundamental Reasons which I outlined in some depth in my Blog from last Weekend and for the Technical Reasons which we will go onto in a bit when I have finished waffling on.
Stage 2 - 2004 to 2008 - The Calm before the Credit Crunch
Starting to get a rough idea about what was going on. Discovered Value Investing. First Leveraged Trades.
Last weekend I started my Charts Blog with: “Finally the Bears have come out for their Honey………” my goodness, they certainly came out and I didn’t realise they would be so greedy and scoff so much !!!
My Portfolio took a right kicking last week and it ended up dropping 4.3% in the 5 days and this means that for 2018 overall I am now in a Loss situation with damage to the tune of 3.3%. It has been such a funny start to the year because I had a super strong first week but then did nothing much through the rest of January and then got whacked last week - not the sort of start I wanted !!
As usual I will look at some Index Charts later to try to get a feel for where we are likely to go next but before that I just want to re-iterate what I think I said last week about how I just don’t see this as being the start of a full-on proper Bear Market like many ‘talking heads’ on Bloomberg and the like are saying. Financial TV loves sensationalism (like all Media because it captures people’s attention and that means Subscription and Advertising Revenues) and wheeling out the Ultra-Bear and Ultra Bull at various Market Troughs and Peaks totally pumps up Viewers’/Readers’ emotions and feeds the Fear and Greed.
This Blog, the first of a Series, has had a pretty slow development from a simple observation about how many people I see/know go about their Investing to something far larger and much more involved - yet, at this stage of starting to type, I am not really convinced that it will coalesce into a coherent whole - I can see this one being abandoned at some point and me just publishing it anyway in whatever state it is in and Readers can make of it what they will !!
Thankfully since typing the above I have made a lot more progress on the full draft and there is a reasonable chance that it might turn out not too dire. In fact, it might actually be quite helpful for many Readers.
I have noticed with regularity how even very highly experienced and successful and wealthy Investors I know seem to lack a final conviction / belief in their own ideas and often it just needs someone like me to say “yes, I like the look of that Stock and it is probably well worth buying” or to actually buy it myself, to get them to finally take the plunge and ‘Pull the Trigger’ to bring it into their Portfolio. In simple terms, some people need reassurance despite knowing what to do.
Finally the Bears have come out for their Honey………
I have been saying for a long time that the Markets were very overstretched to the upside, especially in the US and this was of course best shown by the RSI Readings which were quite frankly insane. The crack in the Bull Run had to come and finally it is upon us. I don’t see this as ‘The End of the World’ and it is far more likely to be just a healthy Pullback within a Major Uptrend - in my experience, Markets always tend to do ok when the Global Economy is decent, and that is clearly the case with more strong Economic Data expected next week.
There is a lot of talk/worry/Noise about higher Inflation and higher Interest Rates but I think such concerns are utterly overblown - firstly because it is highly unlikely that Central Banks will raise Rate quickly and secondly because Chris Dillow in the Investors Chronicle has pointed out a few times that the historical evidence of how Markets perform in a Rising Rate environment is that Stocks can rise while Rates move up to about 5% or 6% - and we are a long way off such levels. The simple fact is that the Faster Economic Growth that goes along with Rising Rates ‘Trumps’ (sorry !!) the drag of higher Borrowing Costs (of course it is not a uniform thing across sectors - for example Banks can make a lot more Profit in a Higher Rate scenario because their Net Interest Margin [the ‘gap’ between their Funding Rate and their Lending Rate] gets larger).
THIS IS NOT A TIP OR RECOMMENDATION. I AM NOT A TIPSTER. PLEASE DO YOUR OWN RESEARCH. PLEASE READ THE DISCLAIMER ON THE HOME PAGE OF MY WEBSITE. IF YOU COPY MY TRADES, YOU WILL PROBABLY LOSE MONEY. I HAVE A LARGE PORTFOLIO AND I USE DIVERSIFICATION TO SPREAD RISK ALONG WITH TRICKS LIKE HEDGING AND OCCASIONALLY BY THE USE OF STOPLOSSES - IF YOU BUY ANY STOCK YOU REALLY SHOULD FOCUS ON HOW IT FITS IN YOUR PORTFOLIO AND KEEP RISK MANAGEMENT AT THE FOREFRONT OF EVERYTHING YOU DO. BE AWARE THAT ALL INVESTORS/TRADERS GET THINGS WRONG AND MANY STOCK SELECTIONS WILL WORK OUT BADLY.
I had the great good fortune of being able to attend the Shares Magazine ‘Growth and Innovation’ Forum at the Business Design Centre in Islington (same venue as Master Investor) on Tuesday 30th January and as always I was very focused with regards to which Companies I spoke to and I spent the majority of my time there meeting up with some truly top quality Investors that I talk to regularly in the Virtual Twitterworld etc. but sadly get rare opportunity to speak to in ‘The Real World‘.
I always approach Shows in this way - to me the Value is in knowing well beforehand which Companies you want to meet with and doing at least a small amount of Research so that you have a fair understanding and are able to quiz the Personnel on the Stand with relevant and meaningful questions. I then make sure I spend a lot of time with them and explore all areas of the Business to get a full understanding and it is a very efficient use of time. This means I can get a lot more out of my discussions but also I find that the People exhibiting are much more friendly and open to talk in a relaxed manner because they actually appreciate someone who goes a level deeper and isn’t just a fresh face who has presented themselves in front of their Stand and wants the Company People to trot out the same old Introduction and Blurb over and over again, before picking up a Free Pen and a Brochure. I feel for these guys because in my murky past I have done a fair bit of Exhibition Stand work and it can be soul destroying sometimes - especially when Punters ask you the most stupid Questions or worse still tell the Directors how to run the Business !!!
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