Monday, February 5, 2018

Summary of January 2018


Summary of January 2018

January became even more of a challenge than what I had anticipated. My wife applied for and received a job in Germany so she has gone back. Future is uncertain. My manager is slowly, by the look of things, getting pushed out from the company. I am not happy about that since he was one of the founders and I know how painful it is to leave once baby behind and even worse to be pushed out of it which is now starting to happen. I hope that he will remain.

When it comes to the stock market then there has been full excitement during January. Started off pretty ok but since then it has seriously gone down hill. On top of that my large investment in H&M turned out to be less then well timed. I can not emphasise strongly enough that no one should ever by the stocks when I do because there are always worse news arriving after I have bought them.

For the previous summary please visit Summary of November 2017 and here you can see my stock portfolio as it is.

Invested vs Current January 2018

The total invested value is now up at: 99,014 €. No further investments were made during January.

Current investments January 2018

The value of the portfolio is today: 108,310 € and spread out I now have around 7,506 € in cash on the different accounts. I have a realised gain of 2,857 € and the combined realised and unrealised gain is now at: 9,295 € (9%) which is not as good as one would have liked and a drop since last month.

Me vs DAX January 2018

DAX dropped down a little during the month to 12,785 points which means that the it decreased by -1.0% which should be compared to my drop of -1.3%.

Conclusion: Not a significant difference against DAX this month which is good but I still want to be on the other side of that coin. I am sitting on cash and it is time to make some investments now in February so I have to think carefully about what I decide to do. The drop in H&M annoys me but I have spent large part of the weekend reading up on retail and I consider many people to be wrong. Some financial people claim that it is a company and not branch issue which I do not agree with. We have had a lot of chapter 11 in the USA in retail. Especially on smaller retail chains that are dependent on, to a large extent, the US market. the US market have ten times (10x!) the shopping surface are of for instance Germany. They over expanded to try to deal with it which failed big time and on top of that in my opinion it has become too easy and gives too little pain to file for chapter 11. Inditex has been brought up as an example how they are still doing well compared to H&M and yes, they are doing better but they are one step bigger, one price level higher and yet they have had increased inventory and decreased margins. I see similar margin drops with Hugo Boss but they have managed to keep inventory under control. Primark have also had decreased margins. The online companies such as ASOS and Zalando have significantly increased their revenues but also they have seen decreased margins. Some bloggers have claimed that they live on their investors which is not true. They make money but they are only traded at P/E of 100+. So is it company or is it branch? Fast retailing (Uniqlo) had these very same issues two years ago. They were forced to close down several stores in Japan and Asian to start getting margins again. From what I see H&M are now starting up that journey to decrease their stores where they have over expanded and I know that they have done this. I have seen it with my own eyes of them having four stores on ONE shopping street in Berlin. Too many! Amazon are currently building brick stores. They have a value. So is it branch or company? I say branch but future will tell and I need to continue thinking about what I will do. Some were annoyed about the new dividend payments. The big investors will take shares and strengthen their grip of the company while we mortals take the cash payment. This will lead to less shares in "circulation" which often leads to higher share price. I need to think what to do with my cash...

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