June 2022 – drawdown breach!

June was gloomy.

Not in London, which is lively, crowded even – and a delight to see. Pavements are busy, restaurants are proving tricky to get bookings in, the river is heaving. I even managed to get to ‘the beach’:

Sand, tides, sunshine – locally in London

I managed to spend a bit of time down around the Coastal Folly too. I’m still finding my rhythm having two homes but so far it is going pretty well. A London kitchen project is running late / badly which gives us plenty of excuses to be down by the coast.

Sandbanks, tides, sunshine – down by the coast

The UK saw a week disrupted by rail strikes but with Working From Home now an option and so many cycle/etc options it didn’t feel too disruptive for me. It was interesting though how positively the union leader Mick Lynch came across in the media and I think if we do find ourselves in a year of employee-driven strikes he will deserve the credit/blame for it. The RMT appears to be asking for about 9% pay increases for train workers. Drivers are coming up next, apparently, along with GPs (asking for 30%!). We are rapidly getting away from ‘inflation is just spiking up temporarily’ to ‘well, if they’re getting it, then I want it’ and that could take years – and a much more competent government – to shake out.

And it is this inflation gloom which is suddenly pervasive. Not just in the UK, though the UK does appear to be taking a particular bruising. Markets got hammered in June and, lest anybody forgets, they hadn’t had a good run of things earlier in the year either.

Continue reading “June 2022 – drawdown breach!”

May 2022 – markets nearing my max drawdown

Australia has general elections every three years or so, and just had its latest one last month. How you can sensibly govern a country when your next election is either 1 or 2 years away always puzzles me, but the Australians have made a decent fist of it over the last 30 years – certainly better than the UK has.

Despite the frequency of elections, it is an unusual Prime Minister in recent times who makes it through to the next general election unscathed – Kevin Rudd, Julia Gillard, Malcolm Turnbull, Tony Abbott etc have all been replaced while in situ. In any case, ScoMo made it to the election, but then got replaced by the opposition – Tony Albanese, a centre left union figure. While his win wasn’t a big surprise, the strength of the defeat of ScoMo’s parties was a surprise. Some folks I know are horrified, but at this distance, he looks pretty similar to me.

Australian general election: One out, one in

The markets don’t seem to have much to report. Somehow I suspect not much will change – let the next less-than-3 years roll on.

Australian equities, bonds (cyan Vanguard line) and selected stocks, last 6 months

Meanwhile, up in the Northern hemisphere, London’s Crossrail Elizabeth line finally opened (it’s great!), and the markets have continued the volatile decline they have been on for a year now. My portfolio dropped 7% in January. February fell too, though the fall was recovered in March. Then April fell 7%. And, at points, markets were down almost 7% in May – see the S&P graph below.

Performance of S&P 500, shown as growth of (hypothetical) USD$10k, during May 2022
Continue reading “May 2022 – markets nearing my max drawdown”

Apr 2022 – London’s swinging, but Tech is down

April was a funny month in the UK. Holidays were back, with a vengeance. Everybody seemed desperate to catch up on overdue skiing, Spanish sun, holiday home action. It was hard getting business done over Easter to a level I have not seen before.

But once Easter was over, boy was London back. The school run traffic is back to not-seen-since-pandemic levels (in fact arguably above – see chart below). Restaurants are hard to book. Theatres are busy. This is all on Tuesdays-Thursdays, note, not on Mondays (which are the new Sundays). And lurgy-ridden public transport is still emptier than pre-covid. The tube is used by workers, but cars are used by school mums. But all in all, a pleasant change is in the air.

London car traffic is back above pre-pandemic levels
London’s public transport remains 20-40% below pre-pandemic levels

Nobody has told the FX markets, with the USD up almost 5% against the GBP. In one month. And up even more against the Euro and the AUD. I don’t quite follow this – though it is obviously something to do with relative inflation expectations and the attitude to the Fed.

In the middle of this, the stock markets are taking a bath, and I am getting very wet.

Most notable for me is that I have lost over £100k just on my AMZN position alone, which finished April just under $2500/share (down from an all time peak of around $3800). Being overweight tech, even ‘blue chip’ tech, has not been a good place to be. And being leveraged at the same time has, literally, compounded the misery.

My portfolio contained, at the start of 2022, over $1m worth of just 4 ‘blue chip’ tech stocks. Which between them have shed over 20% on average in 2022 alone. This stuff is seriously harming my financial health.

Continue reading “Apr 2022 – London’s swinging, but Tech is down”