This week was rather uneventful and it’s probably due to the Olympics helping the world focus on something different for a welcome change! I admit to enjoying the distraction in between home schooling, government schemes to help us during lockdowns, and trying to figure out when we will be given our freedom to move again as numbers continue to rise despite the month of lockdowns? Our leaders are disappointing with poor leadership and solutions that give us hope for a way out of these situations. To me the answer is quite simple, people should be given notice that by a specified date, we will no longer have any lockdowns. With adequate time and supplies of vaccines being the pure maths side of determining the date – based on how many people should be vaccinated each day to reach the target. That way, it becomes the responsibility of those who either do or don’t want the vaccines to deal with the consequences of their decisions as I don’t believe we can sustain any more lockdowns in future. The mental stress is reaching a critical point – people can only put up with so much un-natural disconnection and restrictions for small amounts of time. We had to cancel our ski trips, despite Northern beaches not even having any cases, and already went through the unnecessary Christmas lockdown when other parts of Sydney enjoyed their freedoms. In other words, these long lockdowns do not seem reasonable, are unfairly targeted when they are not based on actual case numbers but more on FEAR. Let’s hope someone in power realises the solution soon!
So regarding the portfolio, there’s not much overall change, as we continue to preserve funds during these unusual times. Shares are generally over valued and unless earnings rise, the market is unsustainable. However, it’s not uncommon for values to rise due to the excess liquidity from government assistance to help businesses through Covid but these also don’t last for long. We expect that some businesses will continue to do well and can ride whatever happens like Health, wellbeing, technology, finance/investments, and consumer staples but other sectors are more uncertain. Again the problem is having a good opportunity to buy into the sectors without over paying and having a higher risk of price falls (we never know when it will happen but it only needs a trigger event for it to happen). That remains the challenge going forward but it’s good that we now have many positions that could take time to realise the potential gains but we are slowly getting there! The spredsheet provides some details of the unreconciled numbers here.
Here’s the Interactive Brokers holdings, with an additional investment in ADN from an additional capital raising (Share purchase program – SPP) to expand their facilities. The interesting things to look forward to are takeovers – these are part of the regular cycle and a sign that the markets are probably overpriced. It has already started and another reason to be cautious (eg. Boral has effectivel been taken over by SGH). This time we are providing a more detailed report for you to review here.
Our Bell Direct portfolio is expected to be a laggard for the next few months but after that anything is possible. The fund managers have moved us back a bit and shows why I am often disappointed by the inability to time both entries and exits from them. However, they are good as long as we hold them for more than 12 months and allow enough time for the benefits to come through. I am continuing to review other fund managers and the minimums they have for investors because many of them are now yet offering access via the low cost MFUNDS option. That means we either need to invest directly with them or via a third party platform (who obviously charge for the priveledge) but this will continue to change. More about this soon.
The good news this week is that cryptos continue to bounce back – especially BTC and ETH. Could this be the beginning of the trend resumption? XLM and ETC are still not back to our buy levels and we may look at buying more of these soon? Either way, it’s now helped offset the fund managers losses and hold our overall position. Let’s hope that “the seeds are now sowed” and in time we will “reap” the benefits!
