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Still the Market Gods are smiling on me and I managed to eke out a small Gain last week - but from looking at some of the Charts which I will show in a bit, I suspect it might be hard to keep adding to these Gains. Last week I looked at the August Month history and it tends to be ok but a typical August often falls in the first couple of weeks and then recovers in the second half - this would certainly line up with a lot of what the Charts are suggesting.
I mentioned last week how I was intending to lower my Leverage and to prepare for some sogginess in the Autumn (September is historically the Worst Month) - having seen these Charts, I will most likely push my plans ahead and sell some stuff early next week. I have already drawn up a List of Spreadbets I want to reduce and I will work off this list.
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If you haven’t read Part 1 or you want a refresher, you can read find it here:
http://wheeliedealer.weebly.com/blog/price-vs-value-think-like-an-owner-part-1-of-2 Stoplosses Oh gawd, not that topic again….. I have been refining how I see Stoplosses and their usefulness (or not) and I have written a Blog Draft about this although I have not yet published it and it needs a lot more work. In terms of this current Blog where we are talking about Long Term Investing and Value as opposed to Price, I just see no place for using Stoplosses - in fact, I think they are a downright bad idea. The whole ethos of what I do is to buy Shares of Quality Companies at an Entry Price which gives me a decent Upside Target and a large Margin of Safety. If the Price of the Share falls after I buy the Stock, then all the time the Potential Upside is INCREASING and the Margin of Safety is also getting better - so the idea of a Stoploss where you sell because the Price might be 15% lower, is plain silly - the Price for the Value you are getting has just dropped a lot !!
In keeping with my usually pattern of being quite focused on the Markets for Monday through to Wednesday and then starting to lose interest on Thursday and doing very little on Friday, I spent yesterday up at Duxford Aerodrome near Cambridge where they have loads of Historic Planes (both Military and Civilian) and it really is an excellent day out from the grind of our tough lives battling the Markets. Of course as it happens I met up with 2 Traders/Investors from Twitter (@aimprospector and @LairdElmski) so I didn’t manage to fully avoid thinking about Stocks and it was very productive and interesting to get their views on many Shares and how the Markets were panning out. And of course I can never get too much of the SR71 Blackbird………
The Market Gods certainly dolled out the love to me last week with my Portfolio rising 2.7% which is a big move for a collection of so many Stocks and with relatively Low Risk compared to a far more concentrated approach. It is especially good when considering how all my Losses for June have now been fully recovered and my Portfolio Value has pushed on to Fresh New Highs - a really sweet position to be in.
I had the great pleasure of watching Johanna Konta play Simona Halep in the Ladies Quarter Finals at Wimbledon on my TV on Tuesday afternoon of the Second Week (the Markets are simply best avoided at the moment) and Konta’s whole approach struck me as remarkably relevant to our task as Investors.
I had not watched a full Match with Konta up until now but I had seen odd bits and I have been really impressed by how she talks to the Camera after her Matches (she is such a contrast to that miserable Murray) and what is really remarkable is how she has gone from being an ‘ok’ player to someone who is now in the Wimbledon Semi Finals and ranked Number 4 in the World.
The immense turgidness of Summer seems to be grinding on but the most noticeable thing is how the Markets are totally following the usual Textbook Monthly Patterns and so far July (after 2 weeks) is working out a shed load better than June !!
I am quite pleased because I managed to squeeze out a 0.9% Gain on the Overall Portfolio last week and despite still being down on where I was at the end of May, I am gradually clawing things back. I am in no eager mood to be particularly buying stuff (although I have my eye on a TopUp of one of my Stocks tomorrow) but equally I am not desperate to sell either. With the Year so far being so Textbook, I am keeping my eye towards September (historically the Worst Month of the Year) and my plan is to TopChop a few things that have done very well once we get into August so that I can lower my Overall Exposure (particularly with the Spreadbets) and also to give me Firepower to Buy if we do get a decent Drop in September.
There has been quite a change to my normal ‘Modus Operandi’ here (I have no idea what that is - probably some sort of Italian Car maybe; I hope it doesn‘t rust too much and the electrics aren‘t too dodgy), and as a total about-face of the usual logic, Part 2 of this Blog has already been published and you should be able to find it not far below on the Blog page. I take the view that it is good to have flexible thinking…..
I had been thinking about a Blog that stresses how important it is for us to try to peep into the near Future and it had merely got to the stage of being on the List of potential Blog Ideas (’The Slate’) but the recent fiasco at Utilitywise UTW has given me fresh impetuous to start work on this one because I see particular relevance as Everyone and his/her Mutt hate UTW but it is quite often the case that when something is collectively hated by the Herd, it is time to be buying.
Finally I got a bit of decent Luck last week - things were looking a bit iffy but right at the last minute Cape CIU received a Takeover Bid kicking the Stock up 46% and this saved my Week with the Portfolio gaining 0.8% overall.
I am so pleased about this because June was a really grotty Month for me - the main culprit was UTW and its collapse which hit me for 2.6% last Week on the Portfolio after a certain amount of “Death by a thousand Cuts” in the earlier Weeks of June. With Markets in a bit of a mood and the Portfolio getting hit I always find it is best to take a breather and stand back and look at things from a longer perspective. Although my Trading ISA is down about 4% from the Peak it hit just before June started, overall it is up 15% so far in 2017 which is not too bad at all - if I can repeat this in the 2nd Half of the Year then I will close out the Year in a very good mood - we shall see no doubt but I am happy with my Stocks in the main and a lot of them look very undervalued.
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 VERY 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 - MAKE SURE YOU UNDERSTAND THIS.
Now I’ve confused you. I bet you’re about to look through my Blog Page desperately hunting for Part 1 - but don’t bother - it is not published yet and you know how I love playing little dirty tricks…. I started writing a generic Blog Series about how the Past has gone and although it has its uses with regards to credibility of a Company and Management etc., it is really the likely Future that we as Investors need to focus our minds on. This Blog, Part 2, comes into its own here because I am going to use Utilitywise UTW as an example of precisely what I mean - because it is obvious to anyone that UTW has had a terrible recent History but my contention (and I am backing this with a chunky Long Position) is that the Company is undergoing a significant and profound Transformation that will take it into a serious stage of Growth. And it looks extremely cheap……
The US Markets close at 1pm their time tomorrow (Monday) and are closed all day for the 4th of July stuff they do (I have no idea what it is for - I think it is to celebrate Tom Cruise or something - after all, he did do ‘Top Gun‘…..) So the chances are we will get a fairly dull start to the week and with Fridays usually being a bit ropey anyway, it might end up being a pretty tedious week. There are US Non Farm Payrolls on Friday (usually around 1.30pm our time) which might cause a spark of fun for the Traders.
I had a right ropey week last week - I screwed up on a Long DAX Trade and I got a swift kick in the goolies from Utilitywise UTW - I will look at those in a mo. June had up until then been a sort of ok month for me but then things went rapidly downhill and my Portfolio got spanked 2.7% on the week which is most definitely the worst Week I have had so far in 2017. Ah well, these things happen and at times like this I find it is best to keep the bigger picture in mind and I am still up nicely over 2017 so far so I am not going to get too stressed about it. |
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