The Good
Another year of great returns. 16% compared to 5.2% for the FTSE. This takes the Portfolio to an 80% return since 2020 (the earliest date recorded on this Blog). Over the same time period the FTSE has returned 26.7% so very pleased with the performance. Might finally be getting the hang of this investing for growth lark.
I have been trying to pick deep value shares, shares that are undervalued for a variety of reasons, then hanging on to them until they are revalued and/or taken over when someone else sees the value.
Overall there have been 23 specific Sells (i.e. a Stock, that had one or more tranches bought, but all tranches sold together). Not bad, but still some churn there. Reasons for sale are
- Gift Horse sales – jump in price from a (rumoured) bid. Not always at a profit. I sold DLG at a loss because Aviva has made a bid for it, but less than the paper loss before the Bid and I was glad for the ‘out’. It had been deeply underwater for years and this was a way of getting out with less egg on my face.
- Bad choice in the first place. ABRD because, well, it’s ABRD and PZC as I was worried about the impact Nigeria was having (but see later).
- Price had got ahead of itself. I’m rushing less to sell after a climb, but it still happens. STJ is a case in point, after climbing about 65%.
- In retrospect, the share was a bit of a duff purchase in the first place. SSP was an example of this.
So, yes, still trading but overall I’m still managing to thrash the FTSE so a bit of horse trading is fine.
One purchase I did make was to buy into St James’ Place (STJ). This was personal. I mention an inheritance, below. The source of the inheritance was from some people that were not looked after properly by STJ representatives and who were ignored for a long time, despite paying commissions each year. STJ hit the Press when it was found out (this issue was endemic) and the levels of commission paid were made public. The share price plummeted and I plunged. By the time I sold, I had made a 67% return in about 6 months, whereas the investments recommended by the reps had made the recipients about 4% a year – not far off the commission, I expect for doing sod all. I feel vindicated by this and it has helped put the feeling of being let down, at least mostly, to bed.
In November I attended Mello in Chiswick. Mello had combined with the London Investor Show, so there was plenty to see and do. Lord John Lee was one of the speakers. A one-time MP he rose to fame as the first PEP, then ISA Millionaire, turning Circa £300,000 into 7 figures. He diarised his investment journey in the FT Money pages. I felt that a lot of his strategies resonated with me and have since read his book about his investing as well as listened to a couple of Podcasts where he was interviewed. Highly recommended and I’m glad that there is a level of validation to my approach from such an August person. One Business he did mention is PZ Cussons that I sold out of earlier in the year due to devaluation of the Nigerian Naira that was severely hitting profits. He did mention that PZC was working on exiting Nigeria and that parts of the Business (e.g. Carex) were worth more than the current Market Cap. After a bit of digging, I’m back in again. Let’s see what happens in 2025!
Boost to savings. I have come into a decent size family inheritance this year. It has allowed me to put some away for a rainy day and also boost the spread of my investments. There have historically been many investments I’d like to make, but haven’t had the funds to invest a decent amount. That has now changed and my shareholdings have shot up from about 15 – 20 to 48 at the end of 2024. That might seem a lot but, as previously documented, I don’t play this game full-time so am not as skilled as I might be. Spreading the money across many investments mitigates the risk that I have missed a black hole somewhere. Mitigates, not prevents, please note. Unless I have spotted a farm Bet, each holding is less than 5% of my Portfolio.
The Bad
Nothing too bad to report if you ignore the few shares that didn’t do so well – only to be expected in a wide ranging Portfolio.
Politically the Conservatives were falling apart at the seams when they were trounced at the Election, however Labour’s honeymoon period was short-lived. Loading up Unionised Organisations with massive, but no strings attached, pay rises whilst simultaneously pulling the rug from pensioners was a bad juxtaposition. Rachel Reeve’s Budget changes are going to ripple through over the next 6 months and it’s not going to look pretty. NI increases, even greater worker Rights and a lot more ‘me too’ when negotiating pay increases for the various Public Sector groups. Election pledges are broken and they can only blame the preceding Government for so long before they have to hang the mea culpa flag up. I’m still fully invested, but also keeping a wary eye on developments.
The Ugly
Mainly this enquiry into commissions on Bank Loans for car purchases. Two of my holdings, LLOY and STB were hit badly. LLOY has bounced back a bit, STB not yet. It’s about time the government had some balls and realised that adults need to grow up a bit. They were happy to take out a loan to buy a vehicle, they were happy with the repayment schedule. I’m sure that they understood that the Salesperson probably earned a commission for selling them it. So what? Sales staff earn commissions on everything, whether it’s reflected in monthly payments, yearly bonuses or pay rises, or the Business actually surviving / thriving for a year. That’s life. As Vivian said in Pretty Woman to the Rodeo Drive Sales women “Big mistake” when they refused to serve her. She implicitly realised that they were on commission (‘scale’) without ever being told. Had their chance, blew it (bonus point if you know which film that quote is from).
Just because it wasn’t made blindingly clear at the time doesn’t invalidate it, especially when the Organisations were operating within the bounds of the Law at the time. To retrospectively change that smacks of Populism and Rule by Social Media.
Disclaimer: I did buy a car on finance at the time and have put a claim in to see if I’m eligible for a refund. If it’s going to happen, then I might as well claim what is due to me. I’d be stupid not to – and it will still be much less than my losses on LLOY and STB if it goes through.
And finally Cyril
It’s been a good year. Returns have been good, outweighing the odd snafu. The ‘day jobs’ have both gone really well with record figures (I run two, very different Businesses) and have recently invested in a third, a niche directory service. I’ve been able to work less, and delegate more for the Training Business and have started to wind down my operations for the Support Business I run with a view to getting out completely by mid-year, possibly with one final ‘big bang’ project.
I’m slowly, but surely moving away from the exchanging time for money model (working for a living) to having enough money coming in anyway to allocate my time more selfishly.
Happy New Year and let’s hope 2025 is also good, despite the change in the White House and Starmer & his coterie’s attempts to take Britain back to the 1970s Tax and Spend days.
