Friday, 22 May 2020

Weekly links...including a new asset allocation 'rule'

By far the most thought provoking graphic I have come across in recent days has been this one:


Admittedly a ratio between a major US equity index and the gold price is hardly rocket science but it certainly made me think - as should most graphics with a time duration of over a century.  Looking at the ratio (and the 'traffic light' colour lines) should give you an instinct about how to think about shares, green for 'go' and above red for 'more caution'.  I looked on the graphic though in a more nuanced way - which feels relevant and correct for today's world.  A lot of people have asked me what I believe a correct gold holding in a diversified portfolio should be currently.  I tend to end up saying 'about ten percent', which got me thinking about the above ratio, mainly because today's approximately x14 ratio between the absolute level of the Dow Jones Industrial Average and the gold price (both in dollar terms) is about the same number as the percentage of my pension fund I hold currently in gold and cash combined i.e. essentially my non-equity positions per se.  And then when I traced back the line over the last nearly 24 years I have been involved in the professional investment game, I realised it told me about the right percentage over that period too, building up positions when more prudence was required...and building them down when equities had more natural attractions. 

Something for me to keep an eye on...among everything else. 

This week I appeared on the VOX Markets podcast here where I talked about some UK stocks that were reporting plus generally updated some general thoughts on the markets. 


On ShareProphets three of my favourite articles are...

Do I pony up for more Whitbread stock?

Chillax Imperial Brands shareholders, your dividend is not (completely) up in smoke...

Intu plays the zombie card...


...which you can read here, here and here.

 


Friday, 15 May 2020

Weekly links

With earnings season starting to slow down, there was a little more time to think dynamically and strategically this week.  We have all seen things over the first five months of this year which - back on 1st January - we could not have anticipated.  Such is the rich tapestry of life...and the soap opera known as the financial markets. 

There are always tactics and strategies out there or - as we often refer to it in the financial markets (to borrow from Benjamin Graham) - 'voting machine' investors and those who are more 'weighing machine' focused.   Naturally the best idea is to draw from both perspectives...which means in today's world you need to be a virus specialist too.

Pull it all together and it makes a good analytical challenge.  To this end, I was pondering how I would fill out the outstanding 2020s box in the graphic below...


...answers in my next series of institutional presentation set for June!! :-) 

This week, I have appeared on the Vox Podcast here talking about the markets and some specific UK equities that have just reported. 


Otherwise on ShareProphets my three favourite articles I wrote were...

The latest on continually stuttering rich man's plaything, Aston Martin Lagonda...

Land Securities and those oh-so-tricky June rental payments...

Is Trainline ever going to make sensible profits?


...which you can read here, here and here. 



Friday, 8 May 2020

Weekly links

Busy week...lots of analysis to do, reports to write and conference calls to participate in.  All good fun though.

Naturally though still time to undertake my normal roster of publicly available investment commentary and insights.  I appeared on the Vox Markets podcast here and talked about many pertinent matters in the UK investment markets, including the suspension for around 18 months of the BT Group dividend. 


I also kept up my regular flow of articles on the ShareProphets website.  My three favourite articles were...

Hotel Chocolat is still reaping the benefits of panicking early...

Halfords suggests I am not the only one getting on my bike

Metro Bank continues to not help itself

...which you can read here, here and here. 


You can also read my article After Lockdown for one of my corporate partners here. 

As I note in the article (and with reference to the graphic below)

Not all of the answers will become apparent in May or even this year but for investors looking out over the totality of the 2020s, there is clearly opportunity after the coronavirus. All you have to do is stay calm, consider new/regular investment flows and believe in human ingenuity over time.


Schroeder Research