LM portfolio as at 13/01/2023:

Makes a nice change to be able to present a sustantial update. The FTSE 250 has been buoyant so far this year which gives the green light for the LM fund to start buying UK shares again.

Aside from some commodity plays, and a single pyramid (NWG) on the 4th January, I didn't buy any UK shares at all in 2022. This made for a very quiet year and that would've been reflected in the updates so apologies for that!

This website is a diary of my journey from £4k a year to a LISA balance of £1,000,000 by 2039. It is a lofty ambition to get to a seven figure sum and losing money by investing in a falling market won't do any good. I'm taking a leaf out of Darvas's book and only buying shares when the overall market is moving up.

There's no sense in battling against the trend.

Provided the FTSE 250 keeps above its 200 day simple moving average then I will continue to monitor the list of new 52 week highs each week and purchase shares as and when the opportunity arises.

Of course, we could see the index plummet again and in that case I will monitor the positions closely and exit them if they show weakness.

My main worry for 2023 is not being able to add the £4k before April. Times are tough and circumstances mean I don't have lots of spare money at the moment.

It's not that we're on the breadline and struggling to pay bills. Yes, our gas and electric direct debit has more than doubled and our mortgage payment has gone up but the main limiting factor is that we've booked an expensive holiday for later in the year that needs paying for.

So it's our own fault.

My hope is that System 1 continues to flourish and builds up to the point where I can take out a large amount and fund the LISA. Unfortunately System 2 won't be helping in this as it went bankrupt yesterday.

As of 15th January 2023 the initial £200 bank for testing System 2 has been decimated. This follows a long and devastating losing streak that took the bank from a large profit (4x initial stake) to slightly negative.

Completely coincidentally, I have recently been reading a book about gambling and at one point this book talked about expected losing streaks (ELS). It wasn't something that I had ever paid any attention to but it probably explains why the bank is gone.

From my nearly 3000 bets I found that the strike rate was just over 5% - 5.57% to be exact.

Putting that figure into an online calculator shows that in a sample size of 2000 there is an expected losing sequence of 134. For the last 485 bets I have been using a bet size of £4 so that means I needed at least £536 just to cover this 134 long losing streak.

However, just covering this ELS is not enough, it's important to go further to minimise the risk of bankruptcy. The website in question recommends using 3 or 4 times ELS.

Looking back now it seems that one of the issues I had is that I did not reduce my stake amount following a lengthy series of losing bets. I should've reduced it down to £2. Or perhaps I shouldn't have raised my stake to £3 and then £4 because the bank simply hadn't grown enough to be able to handle stakes of that size.

This is not the end by any means. I will continue again starting today but with a new spreadsheet and from "bet 1". I am convinced this is a long term system which will create good profits. The issue is that I increased the stake too quickly from £2 to £4 but did not have any plan to reduce it incrementally as the bank reduced.

Oh well, at least we're back investing in shares - and that was the point of this website when it was created 3 years ago.

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