My performance in Nov ’16 – Trump!

FIRE v London1 Comment

Trump won.  Already, less than a month in, it has a somewhat inevitable feel to it.  After Brexit I don’t think I can be shocked by politics any more, but from a market-watchers’ perspective the reverberations haven’t all been what I expected.

I had thought the USD would fall a bit.  It hasn’t.  Well, OK, it fell about 2.8% versus Sterling but it’s up against the Euro and the Aussie.

I had thought US equity markets would fall (from protectionism, policy freefall, etc) but in the shower the next morning the biggest driver seemed to be Trump’s seeming determination to reduce US corporation taxes to 15%; the subsequent market rally suggests I’m not the only person focusing on the impact this could have on equity valuations.

I hadn’t really thought about bonds.  But of course (hah! Ed.) with Trump suggesting a massive increase in the US fiscal deficit and national debt, along with a potential infrastructure boom, interest rates are on the way up.  The US bond indices fell almost 3% in the month, the third month in a row that bonds have fallen in the UK and the US.  UK bonds, which account for 20% of my target weighting, are down almost 9% since August; this alone has hit my portfolio by about 2% over the last three months. But let we become too fussed by end-of-the-bond-bubble chatter, bonds are still up during the year.

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I’ve just been fired by Goldman Sachs

FIRE v London12 Comments

Our relationship began almost twenty years ago, when I was in my impressionable twenties. I was young, free and, erm, approximately single. It began almost by accident.  I was working for an American firm, I had shares in the company, there was a public markets event which I took part in and the next thing I knew I’d begun a long distance relationship.

It wasn’t ever a particularly passionate, intimate relationship.  In fact I got much more involved with another member of the same family, in London, in a brief fling that left me hurt, scarred and financially damaged.  But somehow the long distance relationship continued.  Occasional phone calls usually with me asking for something. A few letters – an annual ritual, for the most part.

I considered splitting up earlier this year.  I was trying to buy a house and I needed some help, some support.  I picked up the phone, and I made my feelings clear.  I had worked out what I wanted and I asked for it. I was told No, not if I wanted to stay in London.   When I realised I couldn’t rely on the relationship, and in fact got more support from other relationships in the UK, I almost broke it off.  But somehow I just reduced my involvement even further and kept going through the motions.

The phone calls had now become only occasional events, and were always about money.  I can’t remember the last letter I received.

So imagine my surprise when I got a letter, last week.  With the familiar postmark.  When I opened it, I couldn’t quite believe my eyes – what I was reading.  No personal greeting, even.  Just cold, impersonal prose.  Not even an ‘it’s not you, it’s me’.   Just complete clarity that our past relationship (!) is over, and a request for me to remove my stuff by the end of the month.   If possible.

I’ve never been dumped before, let alone this way.  Thank God there wasn’t a request for money.

The letter’s below – judge for yourself.

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My Dream Home: after the morning after 

FIRE v London12 Comments

In my last post in this occasional series about my tribulations buying my Dream Home, I left my story at 9am on Friday 24 June – The Morning After – having just received an offer for £100k less than the ‘actual’ value of my old house.  I asked for views on what I should have done next.  And I got some wonderful comments with real wisdom – a real testament to the amazing insights in the UK’s FIRE community.

The first comment came from RIT, suggesting I should have taken the money and run:

“Looks like either a very illiquid market or the price was to high to me. From where I sit I would have had their arm off and pushed for an exchange very quickly.” Retirement Investment Today

My approach wasn’t what RIT advocated, even though I think it is a very sensible perspective. I had several people giving me the same advice at the time.  In fairness to RIT, as LondonRob commented, the ‘right’ answer “partly depends on how much [I] really need the cash. It would also be good to know what the rental value could achieve.”  LondonRob said he felt a 10% discount to the asking price was too much, and so provided cash wasn’t an immediate issue he recommended turning the offer down.  This is indeed what I did.

What I hadn’t explained in my last blog is that yes I would like the cash from my old house, but no I am not desperate for it.  I have emotional ties to the property and do not want to sell it ‘under duress’.  I am pretty confident I will get a reasonable price for it at some point and can afford to wait. I also was wondering about its potential as a rental property, and felt pretty sure I could rent it out – albeit possibly at a low rental yield.  Had the rest of the market tanked between January and June I may well have been feeling more desperate for cash.  But in fact I had already made almost £1m in paper gains this year and this had boosted my resilience, so I was not in much of a mood to compromise.

Continue reading “My Dream Home: after the morning after “ →