Wednesday, May 9, 2018

Reflection on companies



The annual reports started with the British sugar, food and retail company Associated British Foods and ended with

the Russian car producer Avtovaz. This marks the end of the annual reports as well as the analysis of the individual companies that I currently hold in my portfolio.

What we can see is that the German banks are still not doing well six years down the line from the initial investment. We have seen that the German electricity companies are having a great year and on top of that are shaking up the entire market. We have seen that some retail companies have been highly successful and others have not. With the chemical companies we have to draw the same conclusion as for retail. The oil companies are doing well but not the oil service companies because they are still struggling as are the mining companies connected to agriculture. The american companies were hit by massive taxes but were besides from that doing very well which is a promising signal for 2018 especially since they will now pay less taxes.

I now hold 25% of my investment portfolio in ETFs and 35% if I include the company pension scheme that I am involved in. I am not yet up at 50% which I would have liked to be but I am moving towards it with giant leaps at the moment since I am saving over 60% of my salary each month. June will however become a month will a lower savings %-age since I big block of annual bills will arrive then.

I once again took a look at my biggest failed investment which was Asian Bamboo to remind myself concerning the size of that failure that I had so early in my portfolio build up period and how long that has had an impact. If only I had started with ETFs instead of making the inverse journey. I saw the signs in Asian Bamboo and yet I did not have the confidence to react on it. Is confidence the correct word? Did I remain due to curiosity? Due to my initial, very stupid, buy rule that I then had? In the final stages I remained due to that I considered that it was hardly even worth it to sell the shares before I finally did push the sell button. In general those initial investments have all performed extremely poorly for me and have lead to a long term drag on the portfolio that I still today have problems to catch up with. 

With each failure I have tried to tweak my investment approach. Is that wrong? Should the focus instead be to look upon the good investments and make up rules based on what I then saw before I made the investment? MüRe, Adidas, Enel and Deere were all great buys but should I have sold them? MüRe and Adidas I definitely should not have sold while I am still not certain when it comes to Enel and Deere. Kernel was a perfect sale but should I have bought it in the first place? One thing is for certain... it is not easy.

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