April Week 5 - June Week 1: Weekly Reviews Catch Up
Change to Regular Programming
Weekly Catch Ups: There were updates
Transactions: Me the Meddler
So I have been busy (read lazy) - went on a cruise to Norway where they lost all our luggage and my Dad has been over from India and there was also Mello - lot of fun - sorry if I spoiled it for you!
At last I am back, by no popular demand whatsoever.
Started with big plans but unfortunately, much like my portfolio and life in general, I failed to execute.
And to think - there was so much to make sarcastic comments about.
The title for Arpil Week 5 was "We the People".
As it turns out, the more appropriate title might be "Me the Meddler".
There was Monster Tech - ooh that has been crushed - wouldn't suggest back the track up but certainly looking a lot better now than 5 months ago - who'd be an index investor eh.
As it turns out my wife would be better served with that than my tinkering - All World ETF only down around 3% YTD in £ and Energy now 5% of allocation.
Guess we can be grateful to the Bank of England for part of that outperformance (couldn't resist the sarcasm).
TL:DR
Stuff happened in life and the markets - I had thoughts, as many of you who met me at Mello learned - my thoughts are largely irrelevant and I already talk too much!
Market observations
Market moved around, real assets did better than paper assets.
Data was released - inflation might be rolling over or might not, FED may reduce tightening in September or may not, BOJO might be PM or might not, the economy might go into recession or may not.
Some of you may wonder why I am bothering with a dated catch up - I wonder myself but am fairly certain, I will feel a lot better once done.
Portfolio Review April Week 5
Underperformed the index - CWK a major laggard as was Supreme - hope the latter is a function of illiqudity / follow on from the inflation warning.
Only transaction was sale of CCC - which was sold on results. I can't shake the feeling that I am late to the party and that there has been excessive investment which needs to unwind.
Portfolio Review May Week 1
May day, May day as far as my portfolio was concerned - Inflation & general fear kicking my portfolio's backsie. I was rather torn - I think there are so many exciting opportunities for the long term investor, but I can virtually guarantee quote risk & probably some business risk too in the short term.
There were no transactions during the week - part of the underperformance is explained by a consolidation/dividend from Tate & Lyle.
Portfolio Review May Week 2
Portfolio continued to suffer - in particular with some of the more illiquid small caps. SDG is a big holding and probably somewhat disconcerting. Historic results were outstanding, the Mello presentation was reassuring. Balance sheet is sound even with the pension & with the brand strength & price point, would have thought they are relatively well sheltered.
How much of 2021/22 was catch up / sustainable? Will the trends change?
A very popular presentation at Mello - which maybe a double edged sword / explain some of the volatility?
I don't think the quality/heritage of those brands & the business quality is warrants a single digit multiple.
Going back to my comments from the previous week about long term opportunities - I put more money to work in a single week than I ever have done I think - approximately 10% of the portfolio. Cash balances have been increasing with dividends and fresh contributions in the tax year.
Volex was purchased
Ahead of expectations update. Has been on my radar since the directors exercised a lot of share options and didn't sold any to fund the tax liability - which in my simple brain translates into a purchase. This was followed by bonafide purchases.
Still have my concerns around the level of adjustments but the valuation is far more reasonable now than most of 2021.
On the Beach was purchased & sold on 23rd May (Yay Me)
Just did it as a trade expecting a very strong recovery update. When I was on the cruise, one of the things I noticed was that people had spent more on holidays than they ordinarily would because they had not been away for a few years. OTB is a pass through with no balance sheet risk and a lot less operational complexity than the cruise operator (which was at 30% capacity - I thought it was a pretty good deal, ex the lost luggage).
This was done as a short term trade - I'm mindful of consumer discretionary beyond the current year.
Following a strong performance in the run up to results - it was sold the day before results - mainly because I did not want to carry into results as I would not be able to read them during Mello.
Facilities by ADF was purchased (& sold on 6th on reviewing the results)
Seemed very cheap in the context of Adjusted EBITDA and upgrades and wanted exposure to the content theme. Starter position pending results which I thought would be well received.
For completeness - this was sold on 6th June, following the review of results.
Given it was my only transaction on the back of results, I feel I ought to ramble:
The lack of information in the report was shocking - the ID (& 15% dilution) are pretty big numbers, completely glossed over. Either Mgt don't understand capital intensive businesses or they do too well. There was an 800k transaction in equity - not only was SOCIE not presented but even reserves weren't.
Other than my disdain for inept disclosure, feel there is an element of catch up in results (I think) & the fact that there was little mentioned for 2023 while talking about bookings 12 to 18 months ahead made me uncomfortable.
LIO & HL. were purchased
Of my purchases, these are probably the two I am thinking about where the long term opportunity is exciting. Famous last words, but I am virtually certain that both these companies will prove to be sound investments over the investment horizon. I am also virtually certain that they will have a drawdown on my purchase.
The latter has been proven.
HL. - I see a couple of WB parallels with AMEX & his willingness to put a 100% of his net worth into Wells Fargo post banking crash.
If my net worth was greater than HL's M/Cap, then I might also be so bold.
I appreciate they are not the most popular broker, but kind of suggests you are all customers. Their actions as detailed in the Capital Markets Day specifically address the customer feedback & now that FinTwit is less hyper, there has been a substantial improvement in Trustpilot.
In the meantime, they did disrupt the brokerage industry by being a cost leader no less.
I don't think it is beyond the realms of possibility that they do the same to the advisor industry - which certainly leaves a lot to be desired especially around costs.
LIO - As I said when I sold CLIG, I felt the sector had de-rated as opposed to CLIG re-rating, but such is life. I think LIO deserves a better valuation given the diversity in AUM (albeit very retail heavy) which has been added to given the acquisitions. It was between this & Polar, but again there has been a substantial de-rating.
Also, I heard a podcast about how Polar was founded (funded) - if fund managers are willing to do that to clients, I dare say management might be willing to do it to shareholders - remuneration report & share options might be worth a deeper dive.
I am very concerned about earnings risk.
Vertu Motors was purchased (& sold on 23 May)
This was purchased small the day before results & added to on the bell.. Clearly popular with retail investors and felt the pull back in the share price was unwarranted given the balance sheet backing & momentum in the results.
So blatantly cheap it is untrue - almost felt like easy money and allowed me to make up for the FOMO from watching it rally from the 20s to the 70s.
Made some money - didn't really have a target so sold - probably just jitters from the fact that I put a lot of cash to work.
Portfolio Review May Week 3
Looks like there was a benefit to timing the market, with rallies in a number of volatile stocks that were popular with retailers.
I notice that PFD responded positively to results - remember some guy pitching it at Stockslam. As it turns out, I have a bit too much exposure to the food space and probably need to do some rejigging.
If I was not loss averse, Unilever would probably leave but now they have an activist on Board, clearly all is well with the world.
FNX was reduced by 20%
With the rally in the week, the position was getting a little uncomfortable for me given illiqudity and of course the jitters by the heavy buying the previous week.
From a business perspective, I am concerned that their underlying service is consumer discretionary.
Text donations / competitions - very expensive texts when you can enter online for free.
Much to my chagrin, it has rallied more than 10% since my reduction.
Portfolio Review May Week 4
Maybe it was Mello that got investors their Mojo back or maybe it was month end re-balancing the but the last week of May was strong across the board, or was it that the earlier weeks in May were not so strong.
As mentioned above, I did some selling pre Mello as I would not be able to read results and was concerned about position size.
I am pretty confident if I had not invested as much in early May & felt jittery as a result, I would have been less active pre Mello. Certainly less of a Yay Me moment given the recovery in the week.
On The Beach & Vertu Motors were sold.
As covered above - I only glanced at OTB results - didn't seem as bad as the share price reaction would suggest.
Calnex - reduce by 20%
Similar to FNX, the position felt top sized and did not want to carry it in that size the day before results, especially as I would not have time to read them properly.
Also, and in a wonderful instance of searching for reasons to take an action, I noticed that the Free Spirit fund had Bloomsbury and Calnex as it's largest holdings, same as mine and I was concerned that potential redemptions would make it a forced seller.
Bloomsbury - reduce by 25%
No good reason for the reduction other than the position size was making me a little uncomfortable and the usual reduce risk pre Mello.
Free Spirit fund was the trigger, at least so far as the justification is concerned.
Portfolio Review May Week 5
An end to the May meddling to finish the month of May / start the month of June with a shortened week.
There were no transactions in the week, thankfully.
SDG got some respite post Mello and for me it was a week of catch up after the holiday and Mello and that continued into this week.
Fortunately the portfolio benefitted from a rally in Fonix, which is still a reasonably large holding (although not sure why).
Unilever - activist investor appointed to the board - all is well, clearly!
And Finally,
If you made all the way here, I am incredibly impressed - thank you.
The country celebrated the Queen's 70 years of service, which was swiftly followed by a leader who is shall we say a little less dignified.
I'm not really a For Queen & Country kind of guy but I am grateful to Her Majesty.
For many years the country has been divided for various reasons and many leaders on all sides have used it as an opportunity to further their ambition as opposed to serve the public.
The Queen has dealt with a plethora of personal issues & I expect she is pretty disappointed with her staff in Westminster but has remained the epitome of calm dignified leadership throughout.
LONG LIVE THE QUEEN
Adieu
Comments
Post a Comment