I often think of subject matter that is way too short to justify its own blog, yet at the same time far too long to just send out via a Tweet and also I would like to store such stuff in the Website Archives so it can be retrieved by anyone who wants it; and of course with Tweets they tend to be quite ephemeral and soon lost in the River Twitter. On the basis of that, I am envisaging that this blog will cover a few possibly unrelated subjects but at least they get captured in ‘black and white’ electron imagery for the future.
Stay in control of your Position Sizes This is something I see so often and I know I have fallen into this trap many times myself in the past. It’s a very simple concept where we buy into a Stock, and we quite like it, and we give it perhaps 4% of our Portfolio and then we leave it to do its stuff. Then it turns out that this one is a real beauty and it keeps steadily pushing higher and after a period of time we find that it has grown to be much larger and could even be up to 12% or our Portfolio or more. If we have a very focused Portfolio with maybe just 10 Holdings or something, then a Stock like this could easily grow to be 20% or more.
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The inspiration for bashing out this WheelieBlog came whilst I was reading an excellent article written by Philip Ryland in the Investors Chronicle from 16th August 2019 (the one with the Chameleon/Lizard thing on the cover) entitled ‘Debt by any other Name’ and starting on page 33.
If you have access to the magazine in whichever format, I suggest you have a good read of it and perhaps it is best to read my (hopefully simple) blog first and I also suggest reading these excellent Guest Blogs by Justin Scarborough which are particularly useful if you need to brush up on basic understanding of Accounts (this is to Part 2 and there is a link inside it at the top to Part 1): https://wheeliedealer.weebly.com/educational-blogs/guest-blog-from-justin-scarborough-finance-for-non-finance-people-part-2-company-valuation
This is the Second Part in a small Series of just a couple of Blogs and you probably need to read Part 1 first for this to really make much sense. You can find it here:
http://wheeliedealer.weebly.com/educational-blogs/you-dont-want-to-be-over-thinking-things-part-1-of-2 Macro Stuff This is personally a tough one for me. I am fascinated by Macroeconomics and Politics and as a result there is a huge problem that I most likely give far too much weight to Macro issues when it comes to managing my Portfolio. I envy people who just seem to be able to blindly ignore Macro and as much as I try to do it, I just tend to find something in the Outlook that worries me.
I am sure that in much of my scribbles over the years I have touched on the subject of ‘Over-thinking’ but perhaps not really brought it all together in one blog that hopefully puts the subject nicely to bed. The essence is that I get a strong sense that I have spent many many years learning things about Stocks and Markets and Investing and Trading, and all the related stuff, but it is only in more recent years that I have been actively trying to ‘un-learn’ much of the stuff I know and be a lot more basic and elemental in my approach.
Less is More. Keep it simple. Complex is bad.
A few months ago I produced a series of Checklists to be used when Buying particular kinds of Stocks and then some while later it hit me that I ought to produce one for those very high risk, often loss-making, start-up type businesses on AIM that I avoid on the whole but occasionally I will buy into one. Before getting stuck into this particular one, here are Links to the other ones I produced – in fact this is the final one but it has Links to the others:
http://wheeliedealer.weebly.com/educational-blogs/normal-portfolio-buy-checklist-quality-at-a-fair-price-buffett-stock
In the Investors Chronicle dated 17th to 23rd May 2019 with ‘The Activist Effect’ as the main headline on the front cover, on page 32 there is an article called ‘Fund Managers are human after all – that’s the problem’, which makes a very good read although it is perhaps a bit ‘academic’. I guess that is where I come in and if I am doing my ‘job’ correctly then I hope I can convert what seems academic into something that normal people can digest.
It was written by Nilushi Karunaratne and the high level summary would be that Portfolio Managers make good Buying Decisions but make poor Selling Decisions – and the interesting bit is that some of the conclusions are perhaps worth taking onboard ourselves as Private Investors (assuming you are not a Portfolio Manager reading this !!) because, contrary to what many people think, institutional investors are often no better than we are (and many are worse). And the simple fact is that human psychological biases apply whoever you are. Later in my Conclusion bit I will address what we can learn.
Clearly this is Part 2 of these particular Blogs and you can find Part 1 here if you have not already endured it or you need a refresher:
http://wheeliedealer.weebly.com/educational-blogs/only-the-unprepared-panic-part-1-of-2 What can we do to control ‘Panic’? However much experience we have and however much we prepare and work to reduce the negative impacts, to an extent I think feelings of Panic are pretty much inevitable although perhaps with time we Panic less and it is more a feeling of mild anxiety than a full-on Panic Attack. Anyway, bearing this in mind, it is really about what can we do to lower the dangerous occurrences of such feelings and to reduce their severity when they do strike? I suspect the ‘solutions’ come in 3 categories: Forward Planning, Careful Portfolio Management and Psychological Techniques.
Back in early 2017 my mate Phil wrote a couple of Guest Blogs about Peer-to-Peer (P2P) Lending which are very good as they describe in detail the ins and outs. Anyway, since then a lot has changed in the sector as it has matured and Phil has bashed out the following Guest Blog which updates where we are now. The original Blogs can be found at the Links below, and Big Thanks to Phil for providing this refresher,
Regards, WD. http://wheeliedealer.weebly.com/educational-blogs/guest-blog-peer-to-peer-lending-worthy-of-consideration-in-an-environment-of-low-interest-rates-and-rich-stockmarket-valuations http://wheeliedealer.weebly.com/educational-blogs/guest-blog-from-phil-sloan-how-to-protect-your-p2p-earnings-from-tax-the-ifisa
The ‘working title’ for this Blog when it was just a mere whisp of an idea in the WheelieBonce was ‘Only the Inexperienced Panic’ but the more I thought about it the more I felt this was a bit insulting and in reality we all panic but there are ways we can reduce such episodes and I wanted to talk about how to do this.
As usual with my Blogs, a lot of the ideas just come out of thin air and no doubt my Brain is triggered by something which seems unrelated that I then twist (probably much too far) into a topic loosely related to Investing !! My inspiration for this one came from the icon Thomas Weekes on ‘Misfit Garage’ on Discovery Turbo when he came out with the line, “My old daddy used to say, only the inexperienced panic”, and that cemented the thought in my head.
As always, if you have not endured Part 1 yet, you really should read it first or none of this will make any sense (I am not guaranteeing that it will make much more sense even if you do read Part 1 but at least you might have a fighting chance) and you can find Part 1 here:
http://wheeliedealer.weebly.com/educational-blogs/you-cant-time-the-market-part-1-of-2 In Part 1 I outlined why “You can’t time the Markets” comes about, but what are its flaws? |
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