The Appeal of Long Term Investing
Note - this is not the Blog I promised earlier in the week about my visit to Master Investor - that Blog doesn’t actually exist - so you are getting this one instead !! So, as a change to the advertised Programme, WheelieDealer Productions brings you………
Breaking with my normal method, I am scribbling this quite fast around 4.30pm on a Tuesday Afternoon (blimey, the Markets are about to shut, maybe I should be looking at my Stocks) as I want to watch the ‘Gold Rush’ new series tonight (Discovery Channel) and I know that will distract me from my ramblings (OK, you can see I started this Blog in Draft form way back in October - yes, sometimes they take that long for me to drum up the enthusiasm to finish them off.)
Yesterday I attended the Master Investor Show at the Business Design Centre in Islington. I felt the Show was pretty weak this year with very few Speakers of interest to me and the Company Stands were either trying to sell something (Brokers, Trading Platforms, etc.) or were AIM resources Stocks which are really of no appeal to me (I like making money and these things are very specialist and more for ‘Trading‘ than ‘Investing‘.)
I get the impression that Tom Winnifrith has poached all the best Speakers (Mark Slater, Evil Knievil etc.) for his UK Investor Show next week !!
Fortunately I met up with lots of great Investors who I have met over the last 18 months or so via Twitter etc. and it was extremely valuable simply because of this - I will do a Blog with more detail later this week.
First of all I must apologise to Readers for putting these initial paragraphs in. Today I feel unbelievably emotional (possibly powered by a bottle of Shepherd Neame ‘1698 Kentish Strong Ale’) as Thursday 21st April 2016 marks the death of Prince Rogers Nelson. I am really quite caught out by this - I have several Prince albums (or should I say ‘Symbol’?) and in a way I never realised just how big a Fan I am. This has whacked me way more than any of the recent Celebrity deaths we have endured - I guess he was a huge ‘Star’ for me when I was a kid (he was only 6 years older than I am) and he had a sort of mystical persona and charisma that just sort of hit me. He was largely reclusive and an enigma - the word ‘Legend’ totally applies. I remember him dancing in the ‘Little Red Corvette’ video and I had never seen anything like it - and of course Purple Rain, film and album, were just so unlike anything that had ever been created up until that point.
Obviously any Index is just an amalgamation of its constituent Stocks and I thought it would be interesting to look at the Top 10 FTSE100 Stocks (by Market Capitalisation) this week and to see how they were shaping up - if we are to get a Pullback soon after a powerful Rally in recent Weeks, then these Top 10 will by definition have to fall also. This is even more so with the FTSE100 because it is not ‘evenly weighted’ with all constituents having the same impact on the Index - it is heavily biased towards the Bigger Stocks, as it is weighted according to Market Caps.
Normally when I bash out a Blog I have some sort of plan scribbled down on paper to help get my thoughts aligned and half sensible. However, tonight I was making a cup of Tea (one of about 300 I usually slosh back each day, not to mention the Coffees), and thinking about some discussions on Twitter and it struck me there was a Blog to be written about the pain I am suffering from my FTSE100 Short Hedges which are certainly testing my resolve !!
I am sure many Readers have seen my huge Blog about Hedging and have a reasonable understanding of what it is all about - if you haven’t had the misery of reading it, then click on the ‘Category’ ‘Hedging’ and you should find it.
I am in theory out all day tomorrow attempting to roll around ‘The Long Walk’ in Windsor, weather permitting, and it is MotoGP from Texas in the evening so I won’t have time to look at the Charts, so they are going up on a Saturday Night for a change.
According to the UK Stockmarket Almanac 2016, this coming week, commencing Monday 11th April 2016, is on average Up for 47% of years with an average Gain of 0.1% - so it is usually a pretty flat sort of week. However, April is historically the 2nd Strongest Month of the year before we head into Summer, so it is still quite likely that Stocks can keep rising. However, this year of course we have the Brexit Vote coming up on June 23rd, so this might cause the “Sell in May and go away…….” heuristic to kick in a bit earlier than usual.
Where did the last 3 months disappear to? OK, the Markets have dragged a bit for many of us and been quite tedious, but I find it shocking we are already a quarter of the way through the year. April tends to be a really strong month - according to the UK Stockmarket Almanac 2016, it is the 2nd strongest month historically, with only December beating it. On average, April is up for 71% of Years with an average gain of 1.8% - however, this is often a ‘last hurrah’ for Winter, and May is the 10th best month (i.e., the 3rd Worst).
Normally April sees rises week on week, but I wonder if this year the Brexit Vote will shorten any such rises - we are less than 3 months away now and it is inconceivable that this will not cause considerable uncertainty.
For the coming week, we are up on average for 65% of years, with an average gain of 0.6%.
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