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This text appeared in DIY Investor Magazine back in August 2017 and there is a link to that article on the Homepage of this Website. However, I think there is some useful stuff in here for Readers so I wanted to add it to the Blog Archive.
Cheers, WD. HOW LONG HAVE YOU BEEN A DIY INVESTOR? I started mucking around with Stocks back in the Dotcom Boom days in about late 1999 - exactly the wrong time to be doing it !! Wow, what a baptism of fire that was - I got lucky with a few but lost some ridiculous amounts of Money on some very poor choices (thankfully after all these years I know a lot better now !!).
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Anyone who has read some of my Blogs and Tweets and followed what I get up to with my Trades cannot have missed my obsession with trying to Hedge my Long Portfolio of Stocks using Short Spreadbet Positions on Major Indexes.
This is all about trying to lower Downside Risk - in essence there are 2 types of such Risk - ‘Stock specific’ which can be diversified away by holding a number of Positions and by such things as Sizing to Volatility, diversity of Strategies, diversity of Sectors, diversity of Stock Types (Income, Defensive, Growth, Value, etc.). The other Risk is ‘Market specific’ - this can only be practically reduced or largely mitigated by the use of Index Shorts - which is what this Blog is about.
I’m always totally thrown by these Clock Changes - I spend most of the day with no idea what time it is and all of the Clocks in WheelieTowers seem to tell me different things - and the confusion isn’t helped by some updating automatically whereas others don’t - hopefully in a few days I will have figured out what is going on !!
One upshot of this is that some ‘normality’ is being returned with regards to the US Markets and what time they Open and Close - in theory they should Open at 2.30pm BST and Close at 9pm. After the drops on Friday maybe it would be better if they just stayed shut !! Last Week Blimey, that was a painful one - after being nicely in positive territory for 2018 so far I got a right kicking last week and my Portfolio ended up down 3.5% on the Week and this means that I am now down 2% on my Portfolio for 2018 - not a situation I like at all. The hit last week was exacerbated particularly by Sprue Aegis SPRP coming out with the News on Friday that BRK has terminated their Agreement early and that SPRP could get stuck with some Stock - there is a lack of clarity on the impact but it whacked the Stock hard and it is a big Position for me. Annoying, but I am not going to panic as the move to new Suppliers is the key to a much improved performance for SPRP but it is frustrating that yet another hurdle has been placed in their way.
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.
This is ‘officially’ the second part of a small Blog Series but in fact an Additional Blog got produced which you can find here along with the first Blog: http://wheeliedealer.weebly.com/blog/eu-supply-eusp-buy-rationale-part-1-of-2 http://wheeliedealer.weebly.com/blog/eu-supply-eusp-response-to-comments-from-andrew-latto Recent Trading EUSP put out a Trading Update on the 25th January which you can read here (although I have put most of it just below anyway !!): https://www.eu-supply.com/Content/Brochures/RNS_Trading%20Update%20and%20Directorate%20Change_20180125.pdf This Update was pretty decent and they said Full Year Results for 2017 would be in line with Expectations and it was following this that I bought my Position. This bit below shows how fast the Revenue is growing and how 2/3 is Recurring Revenue which is growing strongly as well:
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.
First off big THANKS to Andrew for taking the time to write these comments - it is extremely useful because he has asked some very sensible and valid questions and made some important points and as a Holder he clearly understands where he has parked some of his dosh. You can follow Andrew on Twitter at @LTGrowthStocks. I recently bought a small Position in EUSP and as time goes on and I understand the business more and more I might add to this Position, Andrew’s thoughts are helpful for me to assess the Business and to build my knowledge.
I don’t know how long this Blog will be because I spent all of Saturday at the Master Investor show and today we had the start of the 2018 MotoGP Season with the races from Qatar so I am feeling quite worn out and have square eyes from looking at screens !!
There are a few things I want to cover before looking at some Index Charts and the main thing being the upshots of a long chat I had with Richard Wolanski, the CFO of Avation AVAP, at the Show (I hold Shares in AVAP).
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 first started to notice EU Supply (TIDM Code - EUSP) when I saw @MGInvestor on Twitter had bought into them a while back and I find he is excellent at finding very small companies that have growth potential but are actually real businesses rather than the usual Loss-making Speculative rubbish that kicks around in the dark and dismal corners of the AIM Market and is best given an extremely wide berth.
Last week turned out very nice for me and I am really happy to be nicely back in Profit for 2018 after a Gain of 2.1% for the Week. I updated the ‘Weekly Performance’ Numbers for February on the Homepage a couple of Days ago and the story of the Year so far is very clearly shown there with February being a really tough Month but with how my Portfolio has recovered and with the strength in the US Markets particularly on Friday, it looks like we might be in for a slightly nicer period. As we will see in a bit, the Charts are pretty decent looking.
There has been some Media coverage today about The Chancellor’s upcoming ‘Spring Statement’ (I think it is on Tuesday) where he is due to give an overview of how the Country’s Finances are shaping up and it seems to be the narrative that Tax Receipts are better than forecast and this could mean that ‘Austerity’ (what a joke, there has been no Austerity and Government Spending has risen every year since the Credit Crunch) may be eased, but Spreadsheet Phil (or ‘Philly no mates’ as the Brexiteer Tory MPs call him) won’t be easing the Spending Taps until the Autumn Budget - but if he does ease up then that might be supportive for the UK Economy. Something needs doing because clearly the High Street in particular is really feeling the pinch with large ticket Items like Cars not selling.
This is the Final Bit of a Series of Blogs on this Subject which have been very highly praised (up until this one anyway which might be a total let-down) and if you have not read the others there are links to them here:
http://wheeliedealer.weebly.com/blog/evolution-of-an-investor-part-1-of-4 http://wheeliedealer.weebly.com/blog/evolution-of-an-investor-part-2-of-4 http://wheeliedealer.weebly.com/blog/evolution-of-an-investor-part-3-of-5 http://wheeliedealer.weebly.com/blog/evolution-of-an-investor-part-4-of-5 Stage 6 - 2018 Onwards - Where next? I can only write this Section with the thinking I currently have with regards to how my future Learning is going to pan out and to focus on the elements that I am putting my efforts into as we speak or things that I have made a conscious decision to address in the near future. As Readers may have realised from what I have written so far in this Blog Series, there have been several times in my Investing Career where I have flatlined or been unable to instantly find a new direction - but as things turned out something always came up and re-invigorated my motivation and drive to keep on Learning and, more importantly, improving. With what I have just written in mind, here is my current thinking on where my Learning Efforts are going to be focused in coming years, but I am sure the reality will diverge from this somewhat:
2018 has not started all that easily - after another tough Week my Portfolio was down 1.4% and again for 2018 it has dipped slightly into negative territory - although so far nowhere near as bad as it was a few Weeks ago (it would be lovely if it can bounce now and judging by the Charts that looks possible although I am not sure it can be maintained for long).
I am overall a bit nervous about these Markets - from a very quick look tonight I get the view that the US looks better but the UK and Europe Markets don’t look all that happy - I will address these points in detail later but the essence of my worries around Europe and UK are that we are very near Bearish ‘Death Crosses’ on the 50/200 Day Moving Averages and if we get those it could be telling us there is trouble ahead. |
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