Second year of freedom

And some market comments

Tough year ? no doubt, but what now ?

My base view hasn’t changed since the covid bubble burst and my best guess is still several years of anemic stock markets mainly due to central banks tightening and China decoupling. Once major trends like these do reverse, they tend to feed on themselves and last for many years. However, it’s very important to understand that events can change the course of the markets very fast, so I always keep an open mind and adapt . Thinking of covid, for example.

But even in a bear market there are plenty of trading opportunities and companies that do well, we just have to work harder to find them. Outperformers come out of nowhere, and always the ones I least expect them to: LOAD, MSI just 2 examples.

Takeovers - beware when co’s put themselves up for sale, or they “received interest”, or gets leaked to the press. 99% of the time it’s an orchestrated pump and dump operation, a bit like on AIM but at a higher, more sophisticated level. Genuine takeovers just release the rns when it’s finalised and that’s the end of it.

As for my own strategy, I’m sticking with dual portfolio : investing and trading. In a way I’m hedging against my own self. What I mean by that … if I knacker one account, I’ll still have the other one to fight on with. So when I take more risk with my investing acc, I tend to stay more in cash and trade less in my trading acc, and vice versa. It just works well for me. Also, what am I to do without trading ?! Life would be too boring. There is also a v small SIPP , from my last employer. Too embarrassing to talk about it yet, but the strategy with that one is boom or bust. Nothing in between. It has about £8k in it and I’ll either turn that into at least £200k by the time I’m 57 or lose it all. Right now it has suspended Evraz in it and Poly, two russian roulette plays.

The trading account keeps me busy and provides excitement during the week: I mainly trade rns’, special situations, or something that’s popular. It has to have some sort of short term catalyst, but it has to be something that I understand and I’m in control of, never play someone else’s game again. This type of discipline is critical as a trader. Keep CNBC in the background and also check ADVFN regularly in order to stay in tune with the markets. But personally I’ve not posted anything in about 18 months, just don’t feel the need anymore, which is great. I find playing a game of chess online less stressful.

My investing acc has a more passive approach, longer term and well researched co’s:

BVXP- the largest holding is returning to growth, formidable co and management, I’d quite happily put 100% of the acc in it.

AMS- solid mid-long term defensive compounder.

GNS- another solid mid-long term compounder in animal genetics.

POLY- special situation, its fate is dependant on Russia/Ukraine resolution.

WINE- special situation, change in strategy from revenue growth to profitability. They basically have to prove they can make money from selling wine on line. I mean, how hard can it be ?!

CASH- will get invested as and when the opp is there.

2022 was my 2nd year of freedom and I’m still here fighting the markets, still love it just as much as my first day of freedom. I can’t say it’s easy, mainly because I made the step way earlier than planned. I honestly thought I’d be back in full time employment by now, but it must have been written in the stars for me as I genuinely believe in one’s fate…. there is a written path to follow for all of us, so when covid gave me a taste of freedom, I knew that was my chance. I knew that if I didn’t take it then, I will regret it forever. Financially I wasn’t quite ready, but ever since I read “Free Capital” by Guy Thomas, it was always on the back of my mind and I was quietly accumulating towards financial freedom. It’s a must read for anyone considering making a living from the markets. Family expenses are high at this stage of my life therefore I’m not making much headway in terms of capital appreciation but if it works out as I hope it will, in a few years expenses will fall and then I’ll concentrate on growing the pot rather than living off it, which is the case right now. This is why protecting capital ( which is not “free” anymore) , is vital at this stage if I am to succeed. So I’ll keep on fighting by doing more of the same for now, but reflecting on strategy, … something I’d really like to do is to get involved in a start up or very early stage project where I can invest in but also be part of the story. It’s something that I’ll be exploring into next year.

I thought I’d share my experience as I’d like to read other folks’ journeys especially on financial freedom and different paths to success in the markets. Wishing all fellow investors and traders a healthy, prosperous and happy new year.