Angel investing (1): 10 top tips for a virgin

Sooner or later, it happens.

Maybe your superstar young colleague quits his (it is almost always his, not her) well-paid job, to start his own company. And gently lets it be known he is raising a bit of money, with tax breaks….

Maybe you have just had your biggest yet annual bonus, and the tax consequences are making you sick. Your mate at work mentions a startup he is putting money into, which “reduces his income tax bill”. So you google ‘investments that reduce your income tax bill’….

Maybe your mate’s boy wonder kid is setting up his second business, and in the first one your mate made five times his money, so presumably on his second time around he’ll make even more….

Maybe you have been reading the weekend papers columns about angel investing….

Maybe your IFA has suggested if you don’t like VCT funds, you could consider EIS funds….

Or maybe you’ve sold a business, and not very long after some of those great characters you hired are starting to branch out on their own. They wouldn’t mind some help, and that money you made wouldn’t have been all possible without these folks, so it’s only right to put a bit of it back to work in their hands….

Sooner or later, an angel investing opportunity will cross your door. After all, you’re financially savvy, you’re in the London eco-system, and you are intellectually curious.

I first started angel investing almost twenty years ago. I have made a number of angel investments since then. I’ve made some mistakes, and I’ve had some successes.

Read the rest of this entry »

Why the market’s about to drop – and what I’m doing about it

This time is different.

We’ve been at market highs before. Staring at unprecedented multiples, unhinged presidents, central bankers finally increasing rates, comedians winning elections in G8 economies, the first serious trade wars in decades, and more.

We’ve heard how a big drop is imminent before. We’ve muttered, whispered, tutted, gawped and clicked our tongues.

Yes, as we predicted those times, market corrections often followed soon after (except, just a couple of times, when they didn’t).

But this time really is different.

This time my portfolio is running red hot, at a new high water mark.

Amazon’s just crossed $2000/share. $2000, per solitary share.

Apparently US company earnings are falling, and, not unsurprisingly if so, dividends are heading down. This hasn’t happened before, since, well, just before the last market correction/crash/similar.

In the UK, the (120,000) people have spoken and we have a new Prime Minister. And Brexit no deal/etc looming on Hallowe’en’s day. As if the world economy wasn’t giving us enough to think about.

So, obviously, now is the time to run for the hills.

Image result for hills in london
Head for the hills! If you can get a spot – this is London after all.

Which hill to run to?

Read the rest of this entry »

June 2019/Q2 review

We live in extraordinary markets. Time for a quarterly look back at my portfolio.

What’s been going on?

In the last three months:

  • Theresa May has finally thrown in the towel. Her replacement, either BoJo or Mr Hunt the Culture Minister, will take over on 22 July, barring upset. This follows a European parliamentary election, in which nothing very surprising occurred.
  • Huawei has been in the news a lot. As has Mr Trump.
  • The conservatives won an Australian election, against the odds.
  • Neil Woodford, a person in the UK, suffered a run from depositors.

The markets

June saw some of the most benign market movements I can remember. I don’t have a clear sense of why. Here’s the outcome for the month:

Taking a slightly longer view than one month, one of the most notable features of Q2 was the fall in the pound from $1.31 to $1.26, on the back of UK political nonsense. Equities rose in April, fell in May, and more than recovered in June; FTSE moved in Q2 from about 7279 to 7426, and S&P 500 from about 2830 to about 2930. Bonds rose much more smoothly, up over 2%.

My portfolio

The June market movement, weighted for my target allocation, was up 4.0% (with FX pretty much flat). My portfolio rose by almost exactly this.

What’s extraordinary about this year so far is that markets, as a whole (as weighted by my allocation), have risen over 15%. In six months. These returns are pretty extraordinary. But you wouldn’t catch it in the mainstream media, what with the Woodford/etc woes to read about instead.

Read the rest of this entry »