LM portfolio as at 05/01/2024:
| Code | Sector | Date Bought | Cost | Value | Gain/Loss |
|---|---|---|---|---|---|
| LM055 LM055-2 LM055-3 |
General Financial | 11/01/2023 02/05/2023 20/12/2023 |
£3850 | £4820 | 25.29% |
| LM057 LM057-2 LM057-3 |
Gas, Water & Multiutilities | 12/01/2023 30/05/2023 06/09/2023 |
£3810 | £4730 | 24.15% |
| LM058 LM058-2 |
Support Services | 17/01/2023 20/07/2023 |
£2540 | £2620 | 3.15% |
| LM061 LM061-2 |
Aerospace & Defense | 20/02/2023 13/10/2023 |
£2540 | £2950 | 15.90% |
| LM071 LM071-2 |
Construction & Materials | 24/07/2023 22/09/2023 |
£2550 | £2780 | 9.14% |
| LM074 | Industrial Transportation | 24/07/2023 | £1270 | £1830 | 43.97% |
| LM075 | Equity Investment Instruments | 02/01/2024 | £1270 | £1240 | (2.39%) |
| LM076 | No Specific Industry | 03/01/2024 | £1270 | £1250 | (1.47%) |
| LM077 | Electronic & Electrical Equipment | 03/01/2024 | £1270 | £1210 | (5.07%) |
| LM078 | Banks | 03/01/2024 | £1270 | £1240 | (2.18%) |
Flushed with enthusiasm as it's a new year I have made plans and written down some pretty lofty goals for 2024.
It does seem daft that most people only do this at the beginning of the year. What's to stop us making resolutions that start on the 24th February, for example? January the 1st is just another day but we all put extra significance on it simply because it's the first day of the calendar year.
I won't detail all my goals for this year but be assured that they are written down in a safe place and I am determined to be able to sit here next January and confirm that I smashed them all. Let's do this!
Christmas seemed to go on forever so I was relieved and very happy to log on to my laptop on Tuesday to get back to work.
Won't say much about New Years Eve aside from; (1) I'm done with it and (2) I'm glad I didn't drink much and got up early feeling fine. It wasn't worth a hangover.
Oh, and (3), on one of my friends chats on WhatsApp an old mate posted a picture of a ticket he had for NYE. It said "Stay Home and Do Nothing and Go To Bed Early". Fantastic - sign me up for the same for every year from now on.
So the portfolio performance for 2023... I'll get straight to it:
Up 4.57%
Not bad, not great.
Typical savings rates on offer at the moment are around 4% so if I get a similar return in 2024 then I may as well give up and just put it all in cash.
For comparison the FTSE 100 was up 3.78% over the same period and the FTSE 250 was up 4.44%.
There have been 4 new additions to the portfolio this week and all 4 are "recovery" bets. The decision to invest in these shares was made after quite a lot of effort.
First I watched a number of shares that were hitting new 52 week lows in the "Top 200 Companies" table found in the Business section of the Sunday Times. Each week I added any shares I could find making new lows to a spreadsheet and after several weeks I had a list of 56 possibles.
Next I went through each one and looked at their price chart. I noted whether they were above or below their 200 day SMA and discounted any that were below.
Any that were in the same sector as an existing position in my portfolio were also discarded (for now).
Finally I went through the handful of possibilities that remained and looked at their 10 year chart. I wanted to see some sign that they had broken out of a trend or range.
This left 4 shares and I decided just to pull the trigger and buy all four (LM075 to LM078). I entered each one into my spreadsheet and also specified a strict mental stop loss.
Compared to my usual trading method - buying new 52 week highs - I feel this technique is higher risk but it uses some of the spare cash that has been sat in the portfolio for several months doing nothing. The stop losses may only be "mental" but they are strict. If LM075 drops to 115p then it will be sold, I've no qualms about that. I'll sell it immediately, enter the details into my spreadsheet and then carry on my day. Even a large comparative loss, for example if it dropped 50% in one day, wouldn't cause me undue stress as I know my maximum loss when I enter the trade and I am comfortable with that risk.
Over Christmas I was reading one of my "festive" books - How to Make Your Million by Jonathan Maitland, I've mentioned it many times on this site and the review can be found on the homepage - and though many parts struck a chord with me, one particular passage was very interesting.
Picture the scene; it's the year 2000, Maitland has re-mortgaged his house to take out £50,000 and has invested the lot in several companies. He has no real money management strategy and invests 60% of his entire bank in just one share. The rest he spreads across a handful of investments although there's little diversification as he has only a dozen positions, if that.
Four months into the experiment he decides to open a spread betting account and within three days of doing so he is down £7,220. At the same time he receives a letter from the spread betting company asking for margin of £21,709.85.
Rather than call up and close all the positions, swallowing the loss, he formulates a plan to sell the market for £300 A POINT. His reasoning is that the market has been falling so if it falls another 100 points then he makes £30,000 and is out of trouble.
The next update is on the following Monday morning at 07:59 i.e. one minute before the market opens as he readies himself to pull the trigger.
Common sense prevails, he doesn't sell the market but instead calls customer services and closes all his positions, losing £8,000 in the process.
It's the next diary entry that is very interesting: "Curiously, my overriding emotion is now one of relief. I've only lost £8,000."
Maitland started spread betting to try and make a quick buck but it quickly turned against him and he was staring down the barrel of such a huge loss that when he managed to escape at a cost of eight grand he was relieved. All the pressure of a massive losing position was gone when he cemented his loss, but that pain was far better than the uncertainty that came with holding his losing trade.
In my case all the failed trading experiments, all the lousy share purchases, the ups and downs of spread betting, testing different betting methods, daft wagers on Betonmarkets - they have all helped to shape my trading/investing methodology. If there's one thing I've taken away from all the times I lost it's this; cut the losers and let the winners run.
I've no problem at all taking a loss as I know that the more losing trades I have, the more winners I'm due. At the same time, no matter how many losers I've had, it doesn't put me off from entering new positions. I have no issue buying more shares because I know my worst case scenario.
Take a look at the "Completed Trades" link on the homepage. The LM portfolio currently has 13 losing trades in a row but none of those trades have significantly affected the bank because (1) I limit my risk on any one initial "pilot" trade to just 5% of the bank and (2) I cut a trade if it goes too far in the wrong direction, or it doesn't rise in value, or if the price crosses a particular technical indicator.
Of course, we are yet to see any significant profits from this experiment even though the website is over 4 years old and the portfolio is nearly 7 years old. The profits WILL come and in the meantime it's very important to preserve the bank so that there is still sufficient capital with which to take advantage.
This morning I have been watching a financial seminar from 2002 and, funnily enough, the seminar host shows a slow and steady investment example that would end up with one million pounds "in 22 years". Here we are in 2024 and I would love to know if any of the attendees are now sitting on a portfolio worth £1,000,000 or more.
At the time of that seminar, the year 2024 would have felt like a long, long time away but it comes soon enough.
Whilst I don't want to wish time away I can't help imagining myself reading this passage in 22 years when I'm 67 years old. Hopefully I'll be sitting on a seven figure sum at that point. And hopefully there are some people who have followed this site all the way.
Looking at the statistics behind the scenes I can tell you that there is barely a tumbleweed coming past this website even after 130 or so updates.
A contact email address has been on the bottom of the site for the vast majority of the time it has been online yet I've received a grand total of 4 emails - all of them junk. One was some daft attempt at blackmail - "We have hacked your website and extracted y0ur databases" - where I was supposed to pay them bitcoin. I imagine they sent the same email, slightly edited for each different website, to thousands of email addresses. The bitcoin wallet address where I was told to send $3,000 has never received any funds so their plan failed miserably. Morons.
The other 3 emails were supposedly from my hosting account - "Payment Required for Invoice 57348839". Obviously my hosting company wouldn't write to me starting the email "Dear Customer Lisamillionaire" as they know my real name and the actual email address I use day-to-day.
In short, I don't think anyone is reading these updates. The site regularly receives several hundred unique visitors a month but I imagine they are bots as per the "Dead Internet" theory.
Saying that, I would love to be proven wrong so please feel free to drop me an email to the address below even if it is just to say "I visited".
Happy New Year to anyone reading - and that includes you bots - but not you email scammers, I hope you have a terrible year.