LM portfolio as at 10/03/2023:
| Code | Sector | Date Bought | Cost | Value | Gain/Loss |
|---|---|---|---|---|---|
| LM053 | ETF | 09/01/2023 | £1280 | £1260 | (1.93%) |
| LM054 | Banks | 09/01/2023 | £1270 | £1290 | 1.77% |
| LM055 | General Financial | 11/01/2023 | £1280 | £1370 | 7.23% |
| LM056 | Media | 11/01/2023 | £1270 | £1330 | 4.66% |
| LM057 | Gas, Water & Multiutilities | 12/01/2023 | £1270 | £1370 | 7.49% |
| LM058 | Support Services | 17/01/2023 | £1270 | £1190 | (6.35%) |
| LM059 | Industrial Transportation | 30/01/2023 | £1260 | £1240 | (1.38%) |
| LM060 | General Retailers | 06/02/2023 | £1270 | £1180 | (6.99%) |
| LM061 | Aerospace & Defense | 20/02/2023 | £1270 | £1310 | 2.97% |
| LM062 | Food Producers | 06/03/2023 | £1290 | £1250 | (2.85%) |
Saturday was the last straw.
It had been pitiful for several weeks but Saturday's results finally made me realise that enough is enough. System 2 (the Betfair one) is now abandoned due to hideous results dragging it firmly into negative territory.
Nearly 4000 bets were placed and it still couldn't create a profit. I gave it a decent try, it didn't work and now it's time to quit.
There were some good times - it worked VERY well during the World Cup with a couple of upsets creating some great profits - but overall it would be foolhardy to continue using a system that doesn't make any money.
System 1 on the other hand is still producing consistent profits. Not spectacular but so far it's in the 11th month of the experiment and only one month has ended with a loss.
The big positive about this system is that it is completely automated. I turn on a PC, open up the software and click "Run". The software finds the qualifying bets and then places them for me without me having to intervene at all. It's the ultimate tool in creating true "passive income".
Now that System 2 has failed I have been spending the time it has freed-up considering the idea of "passive income" and methods of making money without having to do anything.
System 1 is the closest to an automated wealth machine I have found in years of looking. I'm coming up to the anniversary of following the system and I am confident it will continue to provide returns.
Obviously there are other methods of generating passive income and so I decided dig out some old newsletters related to this to refresh my memory.
In the mid to late 2000s I was very interested in business opportunities and especially the idea of making "passive income". I quickly ended up subscribed to a monthly newsletter which came through the post which had a relevant title - the "Passive Income Newsletter".
It wasn't particularly expensive at £57 for a year. Thankfully it has survived several house moves and I was able to find it in the garage.
Here's what was promised in the sales letter:
"...receiving cash, cheques, postal orders, bank credits, royalties, commissions, dividends, prizes... in fact any kind of money which [you don't] have to work for..."
Postal orders? Brilliant. Do they even exist anymore? I must remember to ask next time I'm at the post office.
Now dividends immediately spring to mind when you think about passive income. It's very simple; you buy some shares and sit back whilst they pay you cash every so often just for holding them.
Looking at my LISA I can see I have received a reasonable amount of this "easy money" as below:
| Tax Year | Dividend Income |
|---|---|
| 2017/2018 | £0.00 |
| 2018/2019 | £81.72 |
| 2019/2020 | £236.94 |
| 2020/2021 | £365.62 |
| 2021/2022 | £515.14 |
| 2022/2023 | £33.64 |
But there's a problem - in the 2022 to 2023 tax year my dividend income dropped off a cliff. I sold my shares as I didn't want to be invested in what I felt was a declining market. Whilst I successfully avoided losing 20% of my capital by doing so, I no longer qualified to receive any dividend income from those shares.
Although dividends may be a good source of income, there's no point getting a payout of 5% in a year if your investment drops 20% during the same period. You can't be certain that any share will keep its value so in a rising market it might be a good idea to rely on dividends but not in a falling market like that of 2022.
I will certainly return to this topic when I've finished re-reading all the newsletters.
From my hazy memory, the articles printed in the newsletter didn't quite match the initial promise from the very compelling sales letter - they never do. However, I'm sure there will be some interesting info in there and it is certainly quaint to read about websites that were popular in 2006 before the dreaded "social media" websites caught on and ruined the internet.
The portfolio
More bad news in the markets as a bank in the US ran into trouble last Friday.
The "Silicon Valley Bank" has collapsed which apparently came as a shock to Wall Street and the bank's customers, many of whom are tech companies.
Makes sense given the bank's name.
I had to search around on the BBC website for more information as this didn't even make the front page. The BBC decided that above the fold they should feature the latest on Gary Lineker as well as last night's Oscar winners.
Obviously with news like this there had to be a little tremor over here and the FTSE 250 is, as I write, under 19,000 and therefore under its 200 day simple moving average.
But we don't worry too much about intra-day moves as we aren't day traders. Should it close below the 200 day SMA today, tomorrow and also on Wednesday then I will likely take action but for now I will put it to the back of my mind and let the market do its thing.