We seem to have been continuing our ‘purple patch’ almost to rather embarrassing levels in some respects. I have shared before how ‘you’ can go through all-good or all-bad patches – just coincidences sometimes too and not a reflection of ‘style’ but when we have ad hoc investments at the bottom of the list on some strategies and saw them at 20p last March and they are still ‘cheap’ at £1.40 less than a year later…
I have also said before it is as if the coin reminds us it only has two sides – positive or negative and little between. What we have found however is that many investors elsewhere have seen their values stagnate or fall these last five months whereas we have enjoyed one of our best periods in the Firm’s thirty-five year history – not from speculative positions but because undervalued, unloved assets in sectors too many avoided (like banks for example) have begun to regain their fairer values again (more than doubling in the year) whilst the speculative froth has been blown-off the top of things like ‘tech’.
It’s not about ‘winning’ versus ‘losing’ either or the occasional speculative position which comes good. Here is a little lesson for investors aside from the usual of spreading your eggs across different asset classes and also then within the asset classes themselves (ie shares and funds covering the world’s opportunities and different styles and company sizes, etc).
1. If you have the odd exemplary winner, it can make a tremendous difference to the whole pot’s result, such as paying all the management fees on your whole account for a year just because that ‘one thing came good’. We’ve had many of these this last year.
2. If you avoid having too many ‘bad ones’ – so the over-priced falling a great distance. We have been blessed here too – a few small casualties from the unexpected pandemic of course but no-one will ever secure perfection.
3. In terms of your overall investments, if you don’t have some losers, you are not investing properly. Remember then that so often your portfolio’s good overall results are also from those which had fallen recovering lost ground – this, when added to other exemplary gains which you have banked previously, creating an overall better result than ‘apathy’ (doing nothing, sitting on your hands, or panicking to the bank at the worst time) does.
If you want to find out more please do contact us for a no obligation conversation.
