Feb ’17 returns: Kraft + Unilever? !$£€

Another month, another stream of Trump headlines.  You have to hand it to him, he certainly knows how to drive the ‘ratings’.

However for me the biggest news of the month was Kraft/3G’s aborted bid for Unilever. Unilever is one of the biggest companies in Europe/UK.  Its share price has done pretty well of late, courtesy of the ‘flight to safety’ and the ‘bond proxy’ trends towards the reliable defensive inflation-proof stocks that it represents. But the fact that Kraft, a company with less than half its revenues, can table a bid for it including a takeover premium suggests there is obviously significant room for further value creation. I’ve got a reasonable position – of a ‘buy and hold’ type – so I’m paying attention.

Meanwhile, how have the markets and my portfolio done this month?  Read the rest of this entry »


Capital gains vs income, and living within your means

Something’s been on my mind quite a bit recently, and I realise I don’t read much about it. At it’s simplest, it’s how to think about my portfolio’s income versus capital gains.

What I think I know about Capital gains vs Income

I have always liked Income.  I see it as something which is hard to fake; it is closely related to a company’s cashflow, not some mumbo jump Snapchat-like handwavey numbers.  If a company increases its dividend from 50p/share to 55p/share that tells me quite a bit about its profitability and prospects; if a company share price rises from £10 to £11 that tells me next-to-nothing about the company’s performance or prospects.

Read the rest of this entry »


My financial goals for 2017

In my professional life I’m a big believer in having clear objectives.  I want these objectives to be SMART – i.e. measurable, timely, relevant and so forth.  I first practised what I preach on my investing side last year, and found the exercise helpful but flawed.  So I’ve been pondering what goals to work towards this year.

Last year’s goals: no longer useful

My three goals last year (debt reduction, sticking to my target asset allocation, income) reflected the major change I made to my portfolio in January 2016.  I had taken on significant debt, which I wanted to know I could control.  I had shrunk and restructured my portfolio, and wanted to know it could generate a certain level of income.  And asset allocation is probably the single most important aspect of managing my (any?) portfolio so that needed to be in there too.

Read the rest of this entry »