18 Aug 2011, 11:27pm
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  • Yay, bloodbath on the markets again

    It’s all red on the screen again. Now one jittery near-death experience could be called careless, but two is a conspiracy. This ship is going down 🙂 There are only two stocks in my ISA which are in the black, MRCH because I bought it damn cheap last year and it’s still got about 7% to fall before it’s below the waterline, and TSCO who are about to fall into negative territory for me.

    So what’s a chap to do, eh. Could sell everything and get into gold and the Swissie I suppose. Unlike the more cheerful among us, I expect a depression for the Great British Public, though not necessarily for companies, who seem to be increasingly decoupling themselves from the state of the nation. So it looks like the Autumn Sale is back on, in spades.

    I still have some space in my ISA, but would have to break into a savings account to load it up. And since I’ve already bought last week (most of which has bombed slightly) I might as well wait until I get paid before hitting the market again, as I want to spread myself out to after October with purchases.

    However, what I do want to do this time is attend to the diversification/asset allocation

    August asset allocation

    I’m heavy in finacials and pharma, which isn’t surprising as I have gone for the two representative companies from each of those sectors which is my target – with the other sectors I’ve either only got one company or nothing at all.

    I could do with upscaling utilities. An oil company or two wouldn’t go amiss, I will start with RDSB but not just yet. Something like ULVR would be nice, but they’re too dear at the mo and the yield isn’t up to much either. Utilities such as the HY favourites SSE could join NG. The contents of the two ITs give me some exposure to the sectors I’m missing, and fortunately both are weak in financials.

    Something else that is puzzling is what the hell has happened to emerging markets? I used to have a Brazilian ETF but sold it a while ago, it’s now down 16% on what I sold it for. L&G Global emerging markets fund which I’m buying in small bits over the months is down 13% since last month. Emerging markets are meant to the the new dawn, a bulwark against the torrent of bad debt swilling out of the burned-out West. At the moment these guys are drowning even faster that the rest of my ISA, which tends to be heavy on FTSE100 firms.

    So here’s to the bloodbath continuing, at least till I have some more money to lob into the great sucking force swilling around the plughole. It is always hard. at times like that to remember that the sturm und drang does eventually quieten down. Those emerging markets boys had better get their act together though, I think it’s going to be a long hard slog for the West to crawl out from the wreckage…

    The *Autumn* sales? Hold your horses, ermine, let’s not with it away even faster than it goes… πŸ˜‰

    If you want to go back to Brazil, you could take a look at Hansa trust. Another of these rich family jobs. Lots of its money in Ocean Wilsons, which is split between Brazilian tugboats and an emerging market investment portfolio, with the rest of the money in UK value companies.

    Discounts on discounts. Puny yield though.

    *Not* investment advice, as ever, just an idea for your own research. But you know that! πŸ˜‰

    Gah! I hates it when teh interwebs eats my postes. Well, it was my fat fingers, not teh intertubes, but it still drove me nuts!

    But to summarise: markets, ouch! Some good, some bad, but everything that is in the red now was in the red before the slump – but some is still in the black :-). The barabarous relic is getting close to 100% gain, so the ‘net worth’ has been relatively stable.

    I too nabbed some Aviva, as I couldn’t resist a 7%+ yield, but Murphy has managed to whack down the SP 9% since I bought in…. But it does pay a dividend in November, filling a gap πŸ˜‰

    Best investment in time this year has been in the garden (hint: never grow more than one marrow plant!) and the ‘pub economy’ – I have obtained an 8x6ft greenhouse and two 45 galllon water tanks for the cost of a few pints. Dinner tonight was 90% from the garden, and the beer I drank was ‘favours returned’. I also discovered I have quite a lot of ‘social capital’ in the community, who’da thunk it?

    So as long as we don’t tank completely this year (I reserve my opinion on next year…) I might just manage to hold on to my sanity, though that’s sorely tested every time I check the S&S ISA. Oh well, another divi due tomorrow, every little helps πŸ™‚

    As to what happened to ’emerging markets’, well, I always thought that a rather hubristic term – what’s ’emerging’ can only be known in retrospect, once it *has* emerged ;-). My concern is that what is crushing the ‘developed’ economies will be just as cruel to the ’emerging’ ones. I’ve been to Brasil, and wasn’t convinced to invest in it.

    @guv,
    Bloodbath, Eh? The title reminded me of this song! πŸ˜‰ I am a strong bear myself about the mid-term, so count me in as sharing your crystal ball! :-S

    πŸ™‚ Actually that post of monevator’s (2020) is one of my favourites, because of the change in leterary style that he adopted πŸ˜‰

    Ironically, the Indian markets aren’t doing very well either and seem to have joined our Brazilian hombres on markets closing for the weekend! 😐

    Have you looked at Peter Navarro’s macroeconomic book, “If it is Raining in Brazil, buy Starbucks”? In your current frame of thinking cap/mind, you might be able to pick more ideas off him. Take a look at your local book store for that book this weekend, and you may well like him.

    Hey @Macs,
    Been a while, eh? Seems you were busy and otherwise productive, Eh! Schumacher economics at work for you I see? I am chuffed to hear that. I am genuinely intrigued and interested in how you make it work in such a tightly regulated economic and social system as the UK. πŸ™‚

    You know what, you ought to do a Guest post on how you’ve gathered your social capital and how you go about your “garden economics” for the benefit of the rest of us (I am dead serious here). Since this is his blog, ermine gets first chance (to accept or reject) to host you. If he is magnanimous enough to let me host you, I would be more than happy. In that case, leave your contact address with a simple message here on my blog, if you are interested. I certainly would love to have a larger readership hear your story — whether it is on my blog or ermine’s. What’d you say, guv? I’m sure you’re game for that?

    […] Yay! Bloodbath on the markets again – Simple Living in Suffolk […]

    @Monevator, thanks for drawing Hansa to my attention (and yes, usual T’s and C’s apply πŸ™‚ ). They’re quite a good fit for several of my viewpoints, not just the Brazil part. Ocean Wilson is a narrow sction of Brazil but an interesting area. Biggest down is their dividend policy πŸ˜‰

    @Macs, you did better than me on AV., I am down 11% πŸ™‚ If I weren’t over-heavy on financials I’d be tempted for another bite of the cherry, but I haven’t really got any space in that slot before getting the balance right. And yields of > 6-7% disturb me, some things are too good to be true…

    Like the performance of your non-financial investments – you’ve done well there! I need to diversify into trees a little bit too this year, it’s the time of year to start thinking about ordering these.

    The biggest plus for emerging markets that I see is the demographics, with a second plus being the better work ethic. I don’t want to come over all Calvinist, but we do carry a lot of unproductive passengers in the West, including far too many who have never been productive πŸ™ Emerging markets just don’t do that. Brazil and Inda have good demographics, but I am bearish on China despite everybody else saying they’ll take over the world because of their demographics.

    And the barbarous relic is the gift that keeps on giving, eh? I’m out of that totally, I will direct my investment in the direction of trees and growing, because I really hate the yield on gold πŸ™‚ And I’m far too late into that party anyway.

    @Surio I’ve downloaded the book to feed the Kindle. I’d be interested in a fund for the Indian stock market when I start to break out of the yield chasing mode, but I don’t know how to interpret what looks to me like a very high inflation rate.

    @Surio + @Macs – Surio, you had the idea so go for it!

    @surio – it has been a while since we last crossed paths. I’ve been around but probably commenting less πŸ˜‰ And I’ve been trying to be a bit more productive as well and of course gardening has taken up more time as the weather has been nice, not to mention re-building a greenhouse. And foraging around the woods and hedgerows. I’ve currently got some apples and blackberries bubbling away, en route to becoming a few jars of bramble jelly. Mostly for the store cupboard – it’s a great reminder of summer and a source of much-needed vitamin C during the dark, cold days of winter. And some of it will be used to bolster my social capital – or ‘gifted’, to use a less self-conscious term!

    “I am genuinely intrigued and interested in how you make it work in such a tightly regulated economic and social system as the UK. :-)” Well, the jury’s still out on whether it’s working or not – but it’s just one strand of my overall portfolio approach, as opposed to the old ‘all eggs in one basket’ approach of having a full-time job. I still need to get to the point of more money coming in than going out, but what is sure, is there is a LOT less going out this year.

    I’m flattered by the offer of a guest post, and will be in touch via your own channels πŸ˜‰

    @ermine – I quite agree on the yield for gold, but my view has always been ‘it’s insurance, not investment’. As for being late to the party, I’m sure there’s still more upside to be had, but I also stopped buying back when it was around Β£700/oz. Hindsight says I could have carried on, but it was starting to look expensive to me then.

    I think with AV, I’m now a bit overweight on insurance (also have Catlin and Resolution), but every time I think about more diversification, I come over all bearish and get cold feet πŸ™‚ Still, I think a bit more into utilities might not go amiss (UU or SWT, maybe…)

    I hear you on the demographics of the emerging markets, but am beginning to get heretical thoughts. Isn’t that a similar demographic situation to that in the ‘West’ at the beginning of the Baby Boomer era? So it looks like demographics cause booms / growth / development, whereas we now know what propelled the West was a massive bonanza of easy, cheap energy. Demographics would have done diddly-squat without that I suspect, and China will probably bear* that out, too. Which is part of what I was thinking behind saying “what is crushing the β€˜developed’ economies will be just as cruel to the β€˜emerging’ ones”.

    And thanks for the reminder, I really ought to start sourcing more trees and fruit bushes a bit earlier this year! Now that’s an asset with tangible growth πŸ™‚

    *sorry, pun really not intended! Caught in proof-reading πŸ˜‰

    […] Yay, Bloodbath on the Markets Again from Simple Living in Suffolk. […]

    @Macs, yes, I’ve been weighing up the pros of gold or trees πŸ™‚ Gold is more concentrated and more exchangeable, though also more nickable for it. Trees are less concentrated, and in some ways because they become a business asset as well it looks more favourable than if I were looking towards just my own consumption. Mind you, in the latter the produce still does something for your social capital. In some of the older terraced house gardens in Ipswich the Victorians alternated apple trees with pear trees so presumably neighbours could swap.

    Take your point on the peak oil/energy squeeze vis a vis demographics issue, this could well play out that way. That’s what diversification into non-financial investments is for πŸ˜‰

    […] gold, and talking of the barbarous relic everybody’s buying. Oh and it looks like Mr Market is feeling depressed Meanwhile, over in Euroland there seems to be a deathwish of exploring every single bad idea under […]

    […] a fine tree, and along with Macs observing how much better his graden investment has been doing compared to his ISA it seems a good time to […]

    […] This is despite clocking up two definite cock-ups in retrospect – following my old mate Warren Buffett into Tesco and jumping the gun on the deeply troubled Vladimir Putin’s operation. However, I am saved by […]

     

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