Is it the End of Times or the Start of the Greatest Boom Ever?

2016 rolls to a close with the FTSE100 closing on all time high of 7142. So have we hit peak times in the UK or is this the start of something truly great?

When I started investing (or at least started keeping proper records of my investing) in 2007, the FTSE was at 6607. So in the 9 years since, it has crept up just 8%. Hardly an indicator of a booming economy. Of course, we've had the Great Financial Crisis in that time and several other mind-blowing black swans like Brexit, Euro Crises, wars, and terrorism.

Every bit of finance reading I do tells me that it is foolish to try and time markets or even worse do your own stock picking, yet if you had bought a FTSE tracker you'd be just 8% better off over those 9 years. That is truly awful performance for your money. No wonder cash still holds its appeal even with its derisory interest rates.

This year the Team Dave Fund of Fun-ness finished up 24.7% - the best year for quite some time.

This result was all due to timing the market - going big with two chunks of money - once in January when markets were nervous about Fed tightening and immediately following Brexit. The rebounds after each drop have been huge and represented excellent opportunities. In January buying anything in the US market was the thing to do while in July buying anything in the UK was the correct option.

I got 'lucky' both times I guess. And so for this year, I can't help but feel we have hit the top and will probably bob around this level for a while. America seems massively over-valued and Trumptimism could be sadly mis-placed - how quickly can he genuinely make changes? And does anyone actually believe he knows what he's doing?

In the UK, there is no catalyst for a boom to come - everyone here is stretched massively by housing costs while business is equally poorly treated by appalling business rates and high rents. Meanwhile savers continue to be pillaged by Mark Carney's ridiculous behaviour at the Bank of England. How does he sleep at night while the pound is ravaged, companies and intellectual property are sold off to the world. Someone really does need to point out to him that currency / exchange rates are only useful to business when someone actually wants to buy your product / service. If you make something no-one wants, it doesn't matter how cheap it is in exchange terms.

This year's massive devaluation was the third one I've experienced here and every time, it provides only VERY short term boosts. Meanwhile it destroys savings, imports inflation, and reduces internal investment. Who knows how Brexit will turn out this year. Maybe that will be the catalyst for a boom? It's a fingers crossed time though and hugely reliant on people in the civil service and government actually caring and doing their best rather than feathering their nest. Maybe we'll see an actual real redistribution of income because of it but I doubt it.

My guesses for 2017:
Cocoa - it was destroyed in 2016 - bound to make a comeback eventually.
Gold - again decimated - got to be an option if inflation makes a re-appearance.
Any decent internet based world focussed company. eg. Boohoo, Superdry, Microsoft.
ITV to be taken over.
Samsung to fire a bunch of people and return from the ashes.

What does Insider Trading look like?

This!

 

This is Creighton's share price for the last few months this year. You may remember I tipped them as my small cap guesstimate for this year in the year-end review post.  See them plodding along doing nothing until April 19th this year. Then a steady week of increasing share price. For no reason whatsoever. Until an RNS on the 30th April about them selling their Real Shaving business.

How is it possible for the world to know of these events before they are released to the share market?

2014 Year End Review

“I don’t like piggy banks – I’m afraid of change!”

That time again to tie it all up and see if it was worth having my money in equities, rather than sticking it in the bank.

Here's what happened:

FTSE100 fell 2.7%
FTSE100 up 1.3% (total return, GBP)
FTSE-All World up 12.69% (total return, GBP)

Investimouse's fund which is a holding of investment trusts, tracker funds, bonds, fixed interest, and individual company shares is called The Team Dave Fund of Fun-ness. The individual company shares are generally high yielding quarterly paying shares (income is everything) but occasionally I do have a punt on something little. It is compared to the FTSE All-World each year rather than the UK only indices.

The Team Dave Fund of Fun-ness is up 14.76% this year (total return, GBP).

So slightly ahead of its comparative index. Still feel it needs more international exposure, but very pleased to do so well when everyone else is having a bad year.

Slightly annoyed last year about:

- Tesco - Clarke should probably be in prison, along with many of his cohorts.
- Bankers - I hate them all. Crowdfunding and individual finance can't come along soon enough and kill off their corrupt industry.
- The US justice system which continues to pick on BP despite their having made all of Florida an infinitely better place to live. Quite how BP are continually blamed for something American companies and employees caused is beyond me.
- Russia and Putin - madness
- Crawshaw - on the day I had researched it, Crawshaws price was 6p. At the last second I bought Tangent instead as my punt stuck for the year. Tangent earned me 25%, however Crawshaw would have ten-bagged my money. Sleepless nights.

Things I'm looking at this year:

- When exactly to go big on oil again. How long will Putin be happy with just fighting the Ukraine?More than likely his best option is to either rile the Iranians into attacking Israel (big risk) or start supporting ISIL and helping them create a larger conflict in the middle east, specifically by riling them up in Saudi Arabia. More unrest = higher oil price.
- Finger poised on the buy BHP button. Big divs, exposure to energy and all commodities.
- Creightons is my punt stock
- B&M European in retail looks good (I think...)
- Others which have me intrigued for 2015 are CityFibre, Telecity, Shell, Tungsten, Porta, Accumuli

Here's some share tips from round the media for 2014:

Daily Mail - This is Money tips
Guardian
Stockopedia - Top Naps
Independent - Top Ten to Follow in 2015
Telegraph - Questor share tips for 2015 (plus here's last year's results)
iii - Aim share tips for 2015

Some of the other blogger 2014 'year in review' style posts:

DIY Investor
Retirement Investing Today
Investing Sidekick
DIY Income Investor
Wexboy
Adventures in Equities
UK Value Investor


Good luck for the coming year!

And to end a superb cartoon from XKCD:

Portfolio Review - 2013

Man,its been ages since I posted on Investimouse. Shame on me. I've still been active in the market and trying to make more money through investing, saving and financial austerity, yet the real world, and work have intervened to stop me posting.

Anyway, how did 2013 go for the Team Dave Fund of Fun-ness portfolio?


The fund ended up 20.51% in 2013. Damn pleasing and the best performance since 2010. Considering the number of fixed interest holdings and dividend income shares I have now this seems a very impressive performance. But how did it do against the benchmarks? After all, unless you compare yourself to the market, you may as well have been buying a single FTSE100 tracker or similar.

According to Google Finance:
- the FTSE100 was up 13.9% for 2013.
- the All Shares Index was up 16.2% for 2013.
- the S&P500 was up 38.1%
- the World Index was up 26%. (although I'm not sure if this is accurate - struggling to find a perfect measure).

Clearly the place to be was the US in 2013. I've been gradually reducing my exposure to the US (mistake!) as I felt it was incredibly over-valued. The PE for the S&P is a good 25% above the average and that has to mean that things are going to go wrong soon, or so I thought.

The continuing improvement in the World Index continues to nag me. My portfolio consists of a bunch of investment trusts and low cost emerging country tracker funds that could probably all be done away with and replaced by the iShares World Index ETF.

Investimouse holds its shares in the Team Dave Fund of Fun-ness ISA through the iWeb platform. Loads of changes are happening right now due to the implementation of RDR in the UK, basically meaning we all pay a bit more for buying funds, holding shares, etc in our ISAs. I'm sure this wasn't the intention of the good natured law makers but that's what is going to happen to me. I've investigated moving the ISA again but feel that overall iWeb will probably still be just about the best platform to stay with for the size of my holdings. Plus the drama of it all when moving last time from iii to iWeb has put me off ever wanting to do it again!

The last time I had to shift platforms I produced a Google spreadsheet that was a big online hit with people caught up in iii's platform fee charges. This time the good folks at Monevator have an excellent comparison tool that could help you with figuring out who to hold your shares with and place your transactions through.

Portfolio - March 2013 Update

The Team Dave Fund of Fun-ness portfolio has continued to consolidate in 2013. Now up 6% this year which is nice.

There was a bit of action on the portfolio this month. I freed up an extra batch of money to put in the ISA before the cut off point of the 5th April (today). Most of that was put to good use but have held a little back in cash in case we get the normal sell-off in May and I can pick up some cheaper shares then.

A new addition to the fund was:
Foreign and Colonial Inv. Trust which met the criteria of global investment and quarterly dividends, plus they have a buyback going on at the moment which should be supportive.

Other purchases in existing holdings:
Merchants Trust - been a good long term earner for me with quarterly dividends
Henderson International Income Trust - quarterly dividends, decent yield and global exposure.
Man Group - trying to average down so that on a rally I can finally exit this nightmare
HSBC Asia Pacific Tracker Fund - the future of the world is in here. Keep piling in money to to this to get the general uplift of both the collapse of the pound and global rebalancing.
L&G index gilts tracker fund - with inflation set to go supermegahyper.com I'm trying to protect some of it with this.
Invesco Pepetual Income Fund - Mr Woodford has done pretty well with my money over the the last couple of years. I've rewarded his diligence with some more.

Dividends in from the following:

Newton Asian Income Fund
Marlborough High Yield Fund
Utilitico Emerging Markets
BP

for a total of £27.59 of FREE MONEY.

All in all, it's going ok at the moment.

Portfolio - February 2013 Update

A very solid February for the Team Dave Fund of Fun-ness Portfolio. A nice £38 in free money was added to the ISA by dividends from Schroder Real Estate, Merchants Trust, Henderson International Income Trust, City Merchants High Yield Fund, and Ecofin. All of that lot is getting reinvested into the individual shares.

I finally sold out of Legal & General which was a nice small earner for me. It just felt like time to go and I had far too much exposure to the insurance industry. The money from that along with a small fresh injection from redundancy went into more Ecofin and Utilico Emerging Markets helping to bump up their weightings in the portfolio to more meaningful amounts.

I took RSA's decision to hack their dividend amounts by 33% as a hint that they are in deep shit and so bailed on them. I've made good money from them in the last few years and their dividends have been most appreciated, but if they aren't going to pay loads any more and they have no growth prospects either then ... BYE! I whacked the money into my portfolio superstar stock, Beazley. I love them and the latest annual report just confirmed how brilliant they are performing, growing in new areas and inventing new markets to push into. They are great innovators in the insurance sector. They've also decided to give me 14p per share dividend in the next payment. What great guys.

There's just one bit of bad news. I still have a large lump of rubbish in the shape of the worst run company in the entire world, RBS, sitting in the portfolio. I still hope against hope that one day it will come good so haven't bit the bullet and cashed them in yet. However, this week they announced they managed to lose £5bn last year. Astonishing. The share price has sunk again and there seems little hope that unless they can completely shed themselves of the crappy investment bank that they will ever make money again.

As the rally now seems to be fixed in place with the gains consolidated from late last year, we are now in a FTSE 100 holding pattern of 6200-6350. Which is a hell of a lot better than where we were in the dark days of 2011. The fund is now earning good money in most months and is only exposed to complete crap in one area now. In metaphorical terms, my fund now has its head clear of the water, and is striking for shore.

Portfolio - January 2013 Update

Not much happened during January. Watched the snow fall outside and pondered my navel about what to do with my life now my job has ended.

In the meantime, the fund rolled on and had a nice little tick up from the continued FTSE rally.There was just one dividend payment in January, from Raven Russia Pref shares of a massive £5. Not exactly going to get rich from that! New money was put into the HSBC Pacific tracker fund bumping that up a little.

The really exciting news is that the fund has now fully recovered from the financial crisis and is now in positive territory again.

Of interest in other people's blogs over the last few days:

Mr Money Mustache reviewed his progress in the Lending Club - a peer to peer lending site for business funding. As an early lender with Zopa I found this interesting. However, I couldn't believe the rates he is getting for his money (13% after defaults!). Thinking I might be missing out on something I checked out Zopa (max 8%), Funding Circle (exact rate hidden but guessing about 7.5% after defaults) and Rate Setters today (max 5.8%). None of them have returns even close to the claims in Mr Money Mustache's article.

The Share Centre blog continues to churn out interesting information. Last week's post took an alternative view of what's wrong with the economy, comparing it to evolutionary change, and the need for something out of the ordinary to happen before it can break out of its busted cycle.

McTurra had a nice little run-down of Google+ vs Facebook. As a devout Facebook hater I enjoyed his comparisons.

The Technology boom - too late to get on board or is it just beginning?

Every time I try and think of something to do with my life, it invariably gets countered by thoughts of 'that thing is now done in the cloud', or reading about places where factories are now operated by 12 robots rather than 100 people.

Yep, technology continues to interfere and change the game in all our lives. Earlier in the week another high street retailer died (Jessops) as a result of a technology change. Who needs cameras? Everyone. Why don't they buy them anymore? They do is the answer, it's just they buy them connected to phones these days. And anyone with any real requirement for a high end camera does their endless research online and then buys from the cheapest source with the best warranty. Jessops is just one example of technology affecting change in our lives. Look at the music industry and how much life has changed for record companies and music shops even just over the last 10 years. With the digitisation of music and movie files, there's no need to have shops on every street of every town selling the latest cd / cassette / vinyl album. Everything can be delivered online and instantly.

But are there any useful technological advancements happening?

Yet for all the technological advancements going on it is hard to think of any relatively useful ones in the last few years. I can only think of the internet (and the proliferation of information) and satellite navigation that have truly changed the world (think back just 10 years ago - travelling anywhere was all about getting lost, map books on the passenger seat, panicked phone calls and planning routes days in advance). Both of these innovations are more than 15 years old now. The majority of other tech changes seem to be all app and internet based frippery, or miniaturisation of already existing equipment. It seems the world's geniuses are being swallowed up by the Facebook, Google, Apple and Microsoft monoliths who all basically compete in the same reasonably narrow and dull field of information technology.

Where are my flying cars?

As is oft mentioned in the world, by now we should really have been enjoying the benefits of flying cars, robot butlers, holograms, fusion power, etc. Blade Runner was set in 2019 - it had flying cars - just 6 years in our future, yet they still seem so far off. At the 1984 LA Olympics a flight suited chap with jet pack whizzed over the Coliseum and landed on the track. That was 29 years ago. These things should be everywhere by now. Here's the coolest named band in the world:



There was a good article recently at something called Pando Daily (stupid name) which was trying to list some of the most promising 'real world' technological advancements. It came up with:

A flying car - which was a plane with wheels and frankly ridiculous.
Electric cars - which have been with us for god knows how long but are still basically crap.
Solar panels - what? Was this guy born yesterday. Solar panels have been on people's roofs since I was a boy.
A rocket that can fly for 29 seconds - NASA probably have this on repeat in their office just for laughs.

But for all the useless inventions on the cards, there is reason to be truly hopeful that technology can and will change our world for the better. Here's a few:

Google have recently had their driverless car licensed to be used in most of California.
These cool robots can figure out what what is useful trash from our rubbish, and therefore how to turn trash into cash.


I recently had the pleasure of seeing Futurologist Mark Stevenson speak at a car manufacturer's conference. He talked of the real advancements going on in the world, such as 3D printing (see here for plenty more on the subject), carbon neutral fuel generation including companies like Air Fuel Synthesis, human genome sequencing and the benefits of stem cell organ generation.

Obviously all these cool things are going to render loads of us unemployed. eg. Driverless cars are going to replace taxi and truck drivers. But unless a truly socialist / communist government arrives and demands we head back to the stone age, there is little point fighting the change. So embrace it, invest in it and try and make some money from it.

So my investing theme for the 2010s is to put money into technology. 

Well, food, technology, water, and demographics. But this article is about technology and as I'm trying to go down the passive investing angle these days and work less on managing all those shares then it's best to leave the picking of these next big thing stocks to the market. Here's a look at a few ways to buy into the technology world.

L&G Technology Tracker - possibly too dominated by Apple, which appears to have had its day, but as all good index trackers should operate, this will obviously be replaced by other up and coming companies. It has a ridiculously high TER of 1.15% but appears to be the only index tracker available on the UK market. Alternatively you could choose Herald Investment Trust or Polar Capital Technology Trust. All three however are focused just on information technology.

You could also look at iShares Global Clean Energy ETF which tracks an index of 30 clean energy companies. However, as you can see it has been an excellent way to lose money so far!

As to future biotech innovations, you could try Franklin Biotechnology Fund or International Biotechnology Trust. Both have decent track records and you have to hope that they have truly clever people there doing the research and buying into the next big thing.

However, there really doesn't appear to be a way to invest in a trust or fund that buys into the future technology of the world. For some alternative ideas you could look at IP Group, which spins startups out of UK universities or Oxford Catalysts which is doing clever stuff with fuel processing.

If you've got loads of money and want to risk it all, you could opt for one of the Enterprise Investment Schemes (EIS) like Parkwalk's Technology Fund., which invests in Cambridge University startups, or its Oxbridge rival Oxford Capital Partners similar Gateway funds that support Oxford university startups. Not for the faint of heart, nor the non-wealthy, they are a way to buy into possible future technology successes.

Alternatively, you could get all international and choose to buy into IBM, General Electric or 3M in America. All have a decades long track records of innovation.

Here's the coolest use of new technology I've seen for a while. 

The Terminator looks more and more like a documentary every day!

Portfolio End of Year Review 2012

The Team Dave Fund of Fun-ness had a half decent year in 2012. Of course, this was part of a general uplift in the world economy, but at least I didn't have another disaster like 2011.

Overall, my ISA fund is up 9.79% this year. Not a massive result but fairly pleasing (considering last year's -25% figure).

In comparison the FTSE 100 was up 5.84% for 2012. However, that probably isn't too valid to my fund as although I have some UK shares, there is also plenty of emerging and global trusts and funds in there too. Probably best to compare it with a World Index which is up 9.52%. So I'm basically tracking a global uplift.

If investing weren't so much fun the obvious thing to do here would be to just buy a World Index tracker fund or ETF like the iShares MSCI World. But then you wouldn't get the buzz of those lovely dividends and worrying about share prices, dodgy company management, new equity issues, etc. Actually the more you think about it the better it sounds.

Here's my tiny fund as it stood on Dec 31, 2012. Still slightly under water following the crash but making gains now on a regular basis.

My new stockpicker - a global investment trust

So following on the debacle with GTL, I have set about looking for somebody else to do my investing for me. There was a timely article from Morningstar last week wrapping up the best Global Investment Trusts of 2011. Here's the chart:

Can't say that I know too much about any of these but the first thing that stands out is how few of them are making real gains on the money invested with them. Still anybody who ended up with positive returns in 2011 is obviously doing ok. I have been for some time toying with the idea of putting my money into just one fund and letting that appreciate instead of trying to be a stock picker, so this article came at a good time.

Clearly a fund / trust that has the name 'global' in it somewhere is going to have the best chance of finding success in the investing world. With all those companies and assets to choose from, surely a globally focussed manager is going to enjoy the freedom of investing outside the zero growth economies of the UK and Europe.

There's no way I'm going to investigate everyone on that list. So let's look at the top three. Past performance is no guide to future performance but it's as good a place as any to start.

Lindsell Train
Management Fee - 0.65% plus a long winded load of gobbledygook about performance fees and taking the dividend as fee?! I didn't understand it. The 0.65% sounds ok, the rest sounds bad. Interactive investor has the TER down as 1.10%
Investment Approach - mostly invests in itself and the funds Lindsell runs. The newsletters describe how brilliant the fund managers are at Lindsell and the trust they have in the excellent stock picks. They're keen on Nintendo. I'm not. One black mark against them. There's some gearing involved, up to 50% of NAV, sounds bad. Normally invested in 80% equities. The reports are a bit dull, loads of graphs and numbers. Trust runs at a premium.
Returns - pretty good. Since 2005, they've increased share price by 145%. Yield is a paltry 1.4%.
Website doesn't have a lot of information.

Personal Assets
Management Fee - 1.15% TER - not so good.
Investment Approach - tends to run at a premium to NAV which is a pretty good sign of investors trust in the returns. They invest in only the biggest, safest stocks in the world plus gold and cash investments. Nice safe stuff.
Returns - not too bad. Since 2005, they've increased share price by 58%. Yield is a paltry 1.6%.
Not such a fancy website, but the reports and presentations on the site are brilliant stuff. Full of good quotes, feelings about stocks and investment judgement. Well worth a read. The only real black mark against Personal Assets is that its stock trades at £350-ish. Woah. One for the wealthy amongst us.

Fundsmith
is the new kid on the block. Terry Smith (who the fund is named after) is the boss of Tullet Prebon, the super successful brokers in the City. He knows his eggs and the fund has got off to a stellar start. Their website is by far the most open and honest thing you've ever seen in finance. Also not sure why it made the Morningstar list as it is a fund not a trust but never mind.
Management Fee - 1% - hmmm... seems quite a bit.
Investment Approach - taken straight from the website. Invests in equities on a global basis, be a long-term investor in its chosen stocks. It will not adopt short-term trading strategies. The Company has stringent investment criteria: -
high quality businesses that can sustain a high return on operating capital employed;
businesses whose advantages are difficult to replicate;
businesses which do not require significant leverage to generate returns;
businesses with a high degree of certainty of growth from reinvestment of their cash flows at high rates of return;
businesses that are resilient to change, particularly technological innovation;
businesses whose valuation is considered by the Company to be attractive.
There's a bunch of other good stuff which I like too on the front page: No performance fees, no hedging, no shorting, no leverage, no derivatives. These are all mega positive things.
Returns - Fund has only been in operation since November 2010 so not a lot of long term success to judge. It's up 20% from launch though. Yield is 2.5%.

Here's the returns for the last 12 months according to Trustnet.

The first two trusts will incur trading costs each time I put money into them on my normal trading platform. Personal Assets loses even further as I've got to find £350 just to buy one share, although they do have a savings scheme that allows you to put money in and they buy a share once you have enough funds. All can be held in ISAs. Personal Assets run their own one as do Fundsmith. The Personal Assets ISA you have to chuck in £10k all in one go. Phew. Fundsmith demand just £1000 at a time or monthly savings of £100. Nice for the personal investor. As a fund, Fundsmith has no trading fees, just the annual management fee which while high isn't that bad. 

So for me it's a no-brainer. Fundsmith clearly have the greatest potential to succeed. The fund is gaining popularity rapidly, has a genius at the helm, is starting to produce results and has the right investment attitude for long term gains and hopefully to make me wealthy. I think I'm in on this.

Check your ISA rates

Stay still or he'll see you

If you've watched Jurassic Park then you know that avoiding sudden movements can be just as important as running fast. This week I've had that lesson play out in real life.

I've been hunting around for the last couple of weeks looking for a new cash ISA as I was pretty sure that Natwest were ripping me off. With inflation running at somewhere between 4 to 5% at the moment (if you believe the stated figures, personally it feels more like 10%), you've got to do all you can to protect your hard-earned emergency fund.

Anyway, I used the usual comparison sites like moneysupermarket.com and the others to hunt out a bargain. Even went on that charlatan Martin Lewis' site, who I'm not going to link to as he doesn't need any more business, but wasn't able to find much.

My criteria for a cash isa is:
 - no lock in
 - monthly interest (IMPORTANT - I want to see my money growing and compounding all the time).
 - transfers in
 - no fixed rate - there's only one way interest rates are going and that is up. Fixing now is madness.
 - no bonus, initial period rate - I want the most they are going to give me forever.
 - managed online

Right, there were bugger all options with those criteria. I think Barclays had an account for 3% but with restrictions and everyone else had 2.25-2.5%.

As it is though, Natwest are running two rates with their E-ISA depending on when you opened it. If you opened on or before 14 May 2009 (like I did), you get a higher rate and a even higher one applies if you put more money in to pass a balance of £10,000. So rather than move things around and face all the drama of Natwest forgetting to move things or the new provider not quite understanding what I want, I've decided to stay put, pop some extra money in that has come my way courtesy of HMRC and reap the benefits of a tiny bit more interest - 3.01%.

Moral of the story - do nothing, stand still and watch the pennies roll in.