by The Investor
on November 16, 2009
With the markets up over 50% from the low point, my net worth has risen accordingly. Happy days!
Dangerous days, too, with the usual warning signs:
- I enjoy checking my portfolio’s value
- Some of my individual stock picks have delivered excellent returns
- Even bombed out sectors like commercial property and banks have recovered
- Barely any holdings have fallen for months (I sold one that did, Clapham House)
- I’m daring to dream of freedom from salary slavery again
As a buyer during the bear market – and very positive on equities during the March market low – it’s tempting to permit myself a self-congratulatory moment.
Tempting, but experience tells me to resist. Gains lead to complacency, and as an only-halfway passive investor (the head is willing, the heart says not entirely) I need to stay alert. What the market giveth in six months, it can easily taketh away.
Worse, having gone ‘all in’ on equities during the bear market, I’ve not got a properly diversified portfolio.
In particular, I want to buy and hold some government bonds. I currently have none.
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by The Investor
on November 14, 2009
My regular Saturday comment followed by this week’s blog and financial site links.
I can’t decide whether I should feel frightened at no longer having any exposure to gold, or pleased I’m not taking part in a bubble.
Generally I subscribe to the Keynesian view that gold is a ‘barbarous relic’. I sold my holding in Blackrock’s Gold and General fund during the credit crisis to buy more cheap shares.
Like many modern investors I don’t like gold because it’s a near-useless lump of metal that’s only worth what someone will pay for it.
But equally, I can see that’s what gives it special status when diversifying a portfolio. Gold is uniquely useless, and that makes it a potentially pure bet on money supply, compared to say copper or silver which also have industrial uses.
This week saw the gold price fly past $1,100, and the usual justifications trotted out:
- There’s an inflation timebomb ticking away, so buy gold
- Quantitative easing and cheap money threatens the survival of paper currency
- Central banks in Asia are buying more gold
- Supply is diminishing while demand is increasing
- The future is more uncertain — only gold gives certainty
Most of these don’t stand up to scrutiny.
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by The Investor
on November 13, 2009
I have been enjoying my iPhone for a few months now, although as I told blogger Len Penzo for this article:
…buyer’s remorse kicked in over my iPhone almost as soon as I bought it.
For a start, I’m not using anything like enough of its functions. The camera isn’t as good as I expected, and 3G coverage is poor where I live. Adding to the misery, like any good money blogger, I worked out the total iPhone bill in advance for my 18 months minimum ownership, so I know I am paying over $1,500 in your U.S. pesos for the pleasure of this disappointment.
Finally, to buy it I had to track it down via multiple shops and phone calls — there was a run on 3GS iPhones in London at the time — which reminded me how time-consuming buying stuff is.
Since then, I’ve started appreciating my iPhone a little more.
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by The Investor
on November 11, 2009
Most times in life, it pays to think long term. There are a few exceptions:
- If you’re trying to decide whether to kiss her, kiss her
- If you’re wondering whether to go to the party, go to the party
- If he’s big and mean and about to hit you, duck out and live with the shame
- If given the chance to stop over, stop over (I’m thinking cities here, but do extend this rule to suit your own personal level of debauchery)
That’s about it for times when short term thinking should overwhelm long term goals. If you’re not about to kiss, party, be hit or hit New York, look to the far horizon.
Long-term thinking is especially important if you’re planning to escape the rat race. This famous scramble is aptly-named in honour of experiments in which the hapless rodents pull levers for sweets and run nowhere in wheels to avoid electric shocks.
I doubt the rats think for more than two seconds beyond their next tasty treat or miserable let down. What an apt metaphor for today’s wage slaves and Saturday morning consumer warriors.
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