Earlier today our Australia Correspondent @nicktudor100 sent round a link on the tweets to a YouTube video by Tony Seba entitled ‘Clean Disruption - Energy & Transportation’, which lasts slightly over 1 hour but I strongly recommend you grab a brew of some sort (or a FEVR enhanced intoxicant if you prefer) and take a bit of time out to watch this:
It covers how ‘Disruptive’ technologies can grow exponentially (the ‘S’ curve) with plenty of examples like Smartfones and it makes the point that once the economics of switching make sense to the End-User, then adoption is extremely rapid. As always he cites the usual example of how fast Kodak declined - believe it or not they reported record Results in just the year 2000.
For a variety of reasons I have got a real nervousness about the Markets, with probably the main factor being the Seasonal Trend of September and the Autumn often being historically the worst period of the Year for Stocks. I just re-read my slightly old copy of the ‘UK Stockmarket Almanac’ (2016 edition) for its comments on the ‘September Market’. I am sure we all know by now that September is historically the worst Month but it also makes a few other points:
Of course these are just historic trends and could easily not occur this Year but after such a strong run and with Valuations on many Stocks at elevated levels, it seems pretty likely to me that this Year we will get a Pullback. The severity of course is pretty much impossible to know but with such a Strong Bull Trend Channel on so many Global Indexes, I would contend that we could have quite a drop (10% ish) and yet still keep within those Major Uptrends. It might be nowhere near that bad of course.
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. WATR IS A PARTICULARLY SMALL STOCK AND IT HAS A HUGE BUY/SELL SPREAD AND IS HIGHLY ILLIQUID AND THEREFORE HIGH RISK.
I have been interested in this Stock for a while - I think it first came to my attention when my mate @MGinvestor on twitter bought into it and I seriously rate his abilities to find very good undervalued small Stocks so it got my attention. The thing I particularly like is that I have been aware of all the stories about Environmental stuff and how Water will be the most valuable commodity on Earth soon and how there will be Wars fought over Water and all that Armageddon type nonsense - but however much of such bilge I read, there is clearly a grain of truth here somewhere but I have found it extremely difficult to find a Water Stock to actually enable me to play the Mega-Theme. There are of course the usual Water Utilities but they are of course hemmed in by Regulation and are more like Dividend Income Stocks than the Growth Play I really want.
I’m still finding the Markets a bit hard going at the moment - last week I eeked out a small gain but the significant moves were really on Thursday and Friday when Stocks were pretty weak and choppy - it just seems like usual late Summer Markets where many players are probably on Holiday etc.
The Worst Month of the Year, September, is now not far away - it wouldn’t surprise me if we get more selling next Week in anticipation of this and I will look at the Index Charts in a bit to see if there are any signs of this happening yet - there were definitely some hints that the strength we have seen for all of 2017 so far might be easing.
October can be a strange month on average - it usually returns a decent result but its quirk comes from having been the Month when some significant historical Stockmarket Drops have occurred - such as the Wall Street Crash and the 1987 one known as ‘Black Monday’.
Without doubt I am certain none of this will make any sense unless you have read Part 1 which you can find here:
And even then don’t be concerned if you are wondering why you are left in a state of utter bewilderment !!
I am utterly trashed this afternoon as I have had to dig out a collapsed Compost Bin (oooh, that’s sound pleasant !!) and both my arms are aching like crazy, which is rather awkward when your Legs are a bit rubbish. Anyway, I guess shovelling Sh*t in my Garden is very much like dealing with the Stockmarket (Top Tip - if you have one of those sort of upside Plastic Bin things don’t take the door off and then hollow it out - the door is structural and mine just fell over).
Last week was pretty bad for my Portfolio with it losing 3.2% overall including the Overseas bit. Much of that was just the general malaise in Markets and some ExDivs on Thursday (those are not too worrying as obviously I will gain when the Divvys get paid out) but the Criminal of the Week Award has to go to Telit TCM which just fell off a cliff after a Profit Warning and then revelations about a Fraud Indictment for the CEO Oozi Cats from 25 years ago.
There’s a high chance you will think I have been tripping on Acid after you’ve read this - or perhaps been crushing up the Horse Pills.
It’s only Tuesday Evening when I am getting this Blog under Starter’s Orders and already I have had a terrible Week betting on the Nags with both my AA. and UTW Shares tumbling at Fences and taking up the rear of the field. I have really been through the Meat Grinder with these (since writing that chunk TCM has been involved in a dramatic series of events with firstly an awful Profit Warning then the CEO having to take ‘Leave of Absence’ due to historical Fraud Indictments - what a week !!).
I’ve often had a Horseracing analogy in mind with Stocks. People who don’t muck about with the Stockmarket regularly call it “Posh Gambling” and suchlike and say “you might as well put your money on a Horse”. It gets me thinking because in some ways they are right, but in many others, which I will go into in this Blog, they are very wrong and Stocks could hardly be further away from the kind of ‘Win or Lose’ Bets that Horses entail.
I am doing this on Saturday night because I am off to the British Superbikes at Thruxton tomorrow and I doubt I will be back in time (or be in the mood !!) to look at Charts when I normally do. Time is a bit tight so I won’t waffle much and there are quite a few Stock Charts I want to run through.
Last week was a bit of a non-event for me - it started very messily with both UTW and AA. giving me grief but by the end of the Week I was flat and back exactly where I had started. Of course I am pleased to have got away with several problems but I was quite disappointed that a few of my Stocks that reported Results didn’t respond to the upside - in particularly I thought the Aviva AV. Results were good but the Stock did pretty much nothing. This is a shame because AV. has been moving horizontally for many months and I was hoping the Results could trigger a Breakout to the upside - the Stock certainly looks cheap enough and a Dividend Yield around 5% is well worth having.
If you have not already read Parts 1 and 2 of this Blog Series (or if your Goldfish Brain needs to swim around the Bowl again……) then you can read them at these links:
We often hear about ‘Dopamine’ but chances are we don’t really appreciate the mechanism around this inside our Brains. The TV Programme went into this and explained about how when we have an enjoyable experience and get excitement and pleasure, we get a hit of the chemical Dopamine as a natural response. I think the Dopamine gives the pleasure and makes us feel happy and it is the Brain’s way developed over eons by evolution to encourage Human’s to behave in certain ways and to follow certain pre-programmed behaviours. Obviously it is in the interest of the Human Species for individual Humans to want to have babies so the Dopamine is provided when we do activities which lead to this outcome !! (calm down you lot).
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