Coronavirus and collapsing world markets

Well, you haven't heard much from me for awhile, but seems a good time to say a few words.

Seems a long time now since I started blogging and when I look back now my baseline was the 28 December 2009 when the FTSE100 stood at 5412.88, a little more than a year after the start of the credit crunch during which it ploughed a low of around 3800 in Oct. 08 and ran at this level for much of the first quarter of 2009, during which time, in Mar. 09, it had a closing low of around 3500 before starting a long shallow recovery to close 2009 at 5412.88, my starting point.

Almost feels like we have gone full circle in 10 years to be right back where it all began with the FTSE100 hitting a low (current), of 4993.89 on the 23 March.

With health and life the primary concern, I fully appreciate that there is so much more to be worried about at the moment, but our income, savings and investments are also very much at the forefront of peoples' minds as they try to grasp what is happening around us.

I've been invested now through every market rout since, and including 1987, and despite, every rout appearing different and potentially game changing, things have always found a way to come good again.

Whilst we, or I, try to use patience as a main tool, others have been patiently waiting for the turmoil and fear of the current situation and will be making profits in the rout.

I have certainly felt the fear, and anxiety as profits have melted away and the initial leak has turned into a torrent. Logic and reason has also gone out of the window as a very significant (to me), amount of capital has just evaporated.

It hasn't helped losing touch with my monitors and it took me a little time before I even dared look at my portfolio, but eventually a little courage won out and I brought everything back up to date.

The figures are certainly not pretty, I have seen a near 100% amount (based on starting capital), fall in profits from a high of 170% since inception down to (and this is the important part of the message), a gain of 75%. 

The real £note figures have been hugely painful and fearful to accept, but bringing things up to date, has helped me to see that I am actually still up by 75% (dividends re-invested), whilst the FTSE100 has fallen into negative territory after 10 years.

And differently to previous crashes I have lived through, I have actually taken significant dividends out over the last 3 years, in order to finance a house purchase, a kitchen renovation, and a change of vehicle.

In previous crashes, I've often regretted not splurging an amount on a fast car or something before the crash, in order to have had some benefit rather than just paper gains. At least in this case I have, so my living hasn't been held back for a vanished paper profit.

Anyway, I'm trying to give out a positive message that, if world governments and populations can contain the current pandemic, preserving both our health and livelihoods, then markets will find a way to recover. 

With little science or statistical estimates, and just looking at 2008/09, I would suggest a probable 3 year timescale (with various zig zaggy dips and false dawns), for markets to recover back to a level that would make most of us accepting (even forgetful of the pain), of the losses we have all seen in the recent bloodbath.

Stay safe.

As at 17 March 2020

Merchant Adventurer's Index
			Forecast	1 month	YTD	All time
	Price	% holding	Div. yield	% gain	% gain	% gain
Lloyds	33.23p	27.89%	10.11%	-41.49%	-46.84%	-46.19%
Aviva	238.20p	13.41%	13.04%	-32.10%	-43.11%	-34.02%
National Grid	905.70p	28.03%	5.38%	-9.95%	-4.09%	87.15%
BP	240.00p	11.04%	13.71%	-39.42%	-49.11%	-42.31%
Apple **	$273.36	0.00%	0.85%	0.00%	0.00%	0.00%
Fevertree Drinks	1262.00p	0.00%	1.27%	0.00%	0.00%	0.00%
Royal Dutch Shell	1013.00p	2.32%	15.07%	-39.11%	-54.77%	-60.65%
Standard Chartered	441.50p	7.01%	4.74%	-30.03%	-38.03%	-33.83%
Amazon **	1883.75p	0.00%	0.12%	0.00%	0.00%	0.00%
Cash		10.30%	0.00%
		100.00%	8.27%
				1 month	YTD	All time
Virtual Portfolio gain (incl. Dividends)
- 1 month gain   2478.43	1753.28			-29.26%
- YTD gain         2239.00	1753.28				-21.29%
- 123 mnth gain 1000.00	1753.28					75.33%
Unit Price - £	1.75328	(Starting price - £1)
FTSE gain (excl. Dividends)
- 1 month gain   6580.61	5056.31			-23.16%
- YTD gain         6728.13	5056.31				-24.85%
- 123 mnth gain 5412.88	5056.31					-6.59%
Transactions:
09/01/2020	Div	National Grid @ 16.08p per share
17/02/2020	Div	Apple @ 48.37p per share
23/01/2020	Sell	Fevertree @ 147.99p per share
24/01/2020	Sell	Amazon @ 1118.92p per share
24/01/2020	Sell	Apple @ 2440.11p per share

Musings

Lots to catch up inside my portfolio having spent the last few months financing home improvements etc.
But, as we get beyond the traditional May milestone "Sell in May da-de dah...etc. etc." and are still mired in the various trade disputes, and Brexit trials and Tory leadership turmoils there are various sectors under watch as they plough recent lulls and lows due to cyclical and uncertainty reasons.
I've developed a constant question when faced with rhetoric and newsflow that some of you might be able to bring to mind, that being "what's in it for them?" and this is generally aimed at reporters, analysts and politicians!
It seems more strongly prevalent than ever, particularly when we look at the House of Commons, the ongoing fight for no. 10 from both outside and within the Conservative party.
Brexit really seems lost amongst personal and party ambitions.

I see various quotes about supporting a second referendum and letting the people decide, and it seems this is being used a shield with a pretence of democracy. Unfortunately, the people had already decided but this historic fact seems lost amidst the personal ambitions of our so called representatives.

Anyway back to the game, retailers, house builders and many other sectors are being hit by uncertainty and with many household names amongst them they are at valuations that might be termed attractive in recent and in some cases historic timeframes.

Both Ted Baker and Associated British Foods are amongst these having been affected by trading conditions and uncertainty, will they or can they bounceback?

Tobacco stocks are also in the midst of perfect global storm of negative newsflow and statistics and there is much uncertainty about what these companies may look like in the future?

The uncertainty around these sectors is also affecting many others in a similar groove, yet overall markets are still holding good levels with the FTSE comfortably above the long held ceiling that was 7000.
It seemed to spend the best part of 20 years trying to break through (beginning in 1999), but has managed to maintain a hold (apart from a blip or two), above that mark since the end of 2016. 
Anyway, I'm still managing home improvements but had these trails of thoughts following ABF news today regarding Primark which gave me pause for thought particularly given its global presence in retail now.

Strained times!

Dow - 25,324.99, - 617.38 (-2.38%)
NASDAQ - 7,647.02, -269.92 (-3.41%)
FTSE (as at 10:03) - 7,211.76, +48.08 (+0.66%)
Well I switched on this morning expecting a bloodbath after hearing that the US markets had fallen following further ratcheting up of tariffs on US and Chinese goods.

Bizarre then to see the FTSE up in positive territory and most of my watchlist green (what remains of it anyway after the Digitallook decimation).

Of course, there was a continuing, and growing impact to Apple which fell a further -$11.46 (-5.81%), to $185.72 as the huge Chinese market is seen as a key frontier to Apple.
After the company's second quarter report seemed to re-assure markets that it had sufficiently stabilised things after the shock of a profit warning in its previous reporting, the share price had staged a recovery back up to around $212. 
Growth and profits really cannot continue on an increasing trajectory, without some form of re-calibration.

Strange times indeed, or should that be "strained" given the pressures on global trading relations. In a generation that has seen companies seemingly span the globe making billions, we are now being reminded what the underlying web of tariffs that countries and governments have in place.

On another front is the UK's Brexit debacle and future trading relationship with Europe. I'm not even sure why this is up for debate given the promotion of free trade by the EU. 
It complained to the WTO following US tariffs increases on EU imports why then are we even having a debate on its future trading relationship with the UK, as it should remain as open and tariff free as possible given the regularity and frequency (steering clear of the word dependency), that has become standard practice and custom.
The fact that the UK has said "no more" to the need for an increasing sovereign state Bloc control of Europe (in my mind at least), this shouldn't be an obstacle to trade.

Anyway, strange and strained times indeed.

Apparently: Treasury may rule out online tax that 'could save high street'.

https://uk.webfg.com/news/news-and-announcements--/treasury-rules-out-online-sales-tax-that-would-save-high-street--3708294.html

"as official felt it would have broken European Union rules."

"Mel Stride, financial secretary to the Treasury, wrote to Nicky Morgan, chairwoman of the Treasury select committee to warn her there was a high “risk” that the tax would not be compatible with EU regulations, the Times reported on Friday."

Breaking EU rules? Incompatible with EU regulations?

Is it just me, and am I missing something, or does the Treasury seem certain of our future relationship with the EU? 

Perhaps they didn't get the memo?

If they do, perhaps they should share that information with the rest of us, or start working towards a potentially different outcome instead of talking just the present and using language that gives the impression they are doing nothing about Brexit.

No surprise then, that the UK seems so ill prepared and that there is so much talk of a negative fall-out if key Government departments potentially aren't preparing for change and different scenario outcomes. 
Would that practice and lack of vision survive within a business? Not for long, or at least the business wouldn't.

RIP Digitallook

Tough time all round waiting for markets to settle after the bears wrest control of markets. Even more disconcerting is the loss of my watchlist and favoured research resource of many years.
I'm trying to think of a time I didn't use it but can't recall how long it has been up and running or how long I have been using it, perhaps 15 years or more?

Anyway, looks like the new owners have stamped their mark and swept away the old which has unfortunately deleted my account and my historic global watchlist which served me as a litmus test of all my thoughts, strategies, and legacy investments.

So in having to start again, the new site appears less user friendly and slower given the new graphics etc. Although, the old site has been unwieldy too given the amount of animated adverts that it was being asked to bear.

Can't complain too much but now on the lookout for new tools and resources.

Utilities: risk v. value.

Given the ongoing falls in UK utilities and the inertia effect it seems to having on my own portfolio, its interesting to read Citi's comments that much of the risk is now being discounted and value has appeared (uk.webfg.com: Downside for United Utilities now limited even if nationalised, Citi says).

Is this enough to sway investors and begin a fightback for these companies?

Melrose musings.

Given the current low level of global sentiment and its completed takeover of GKN, Melrose has starting to interest me today  (uk.webfg.com: Melrose happy to find 'no black holes' in GKN business). More musings and analysis needed.

October 2018: Dividend Pipeline and Apple comparison

As mentioned, after a bumper couple of months, expected October dividends will be a little scarce on the ground, as will the run to the end of the year.
Through August and September, all 4 of my big hitters, Lloyds, National Grid, Aviva, and BP delivered a payout, ably supported by a number of other chunky yielding companies.

As things stand though, for the year to date and v. the start of the year portfolio figure, actual dividends received have amounted to a yield of 4.12% (not adjusted for any funds removed), which is a figure I'm happy with. Although, it also has to be noted that this may have been at the expense of some capital growth, so I continue to look for a happy balance.

One thing that occurred to me to check was my current yield on Apple, which has a historic figure of 1.6% for the year ending Sept 2017, and a consensus forecast estimate of 1.2%.
After the 15% US withholding tax and a weaker sterling exchange rate, the net yield to me is around 0.9%, and a forecast estimate of 1.03%.
However, this does not always show the bigger picture given the strong long term capital growth that Apple has given. 
Just for a little comparison, if I was to take the current forecast net yield (incl. 15% withholding tax and an exchange rate of $1: £1.3), and pitch it against my original investment in Apple, I see that I am actually receiving a net yield of 6.15%. Perhaps the best of both worlds and long may it continue to appreciate its share price and increase its dividend.

Looking ahead:
	Rate
Company	c.	p.	Xd	Paid
National Grid		15.49	23/11/2017	10/01/2018
Vodafone		4.84	23/11/2017	02/02/2018
BAT		48.8	27/12/2018	07/02/2018
Apple	63		12/02/2018	15/02/2018
SSE		28.4	18/01/2018	16/03/2018
Berkeley Group		56.75	01/03/2018	23/03/2018
RDS 'B'	47		15/02/2018	26/03/2018
Imperial Brands		59.51	22/02/2018	29/03/2018
BP	10		15/02/2018	29/03/2018
Galliford Try		28	15/03/2018	06/04/2018
BAT		48.8	22/03/2018	09/05/2018
Aviva		19	05/04/2018	17/05/2018
Apple	73		14/05/2018	17/05/2018
Lloyds		2.05	19/04/2018	29/05/2018
RDS 'B'	47		10/05/2018	18/06/2018
BP	10		10/05/2018	22/06/2018
Imperial Brands		28.43	24/05/2018	29/06/2018
Vodafone		10.23	07/06/2018	03/08/2018
BAT		48.8	28/06/2018	08/08/2018
National Grid		30.44	31/05/2018	15/08/2018
Apple	73		10/08/2018	16/08/2018
RDS 'B'	47		09/08/2018	17/09/2018
SSE		66.3	26/07/2018	21/09/2018
BP	10.25		09/08/2018	21/09/2018
Aviva		9.25	16/08/2018	24/09/2018
Standard Life Aberdeen		7.3	16/08/2018	25/09/2018
Lloyds		1.07	16/08/2018	26/09/2018
Imperial Brands		28.43	23/08/2018	28/09/2018
Standard Chartered	6		09/08/2018	22/10/2018
BAT		48.8	04/10/2018	15/11/2018
Galliford Try		49	08/11/2018	05/12/2018
Imperial Brands			22/11/2018	31/12/2018

September 18: Dividend Pipeline

After a bumper month in July for dividends, can I really expect to see a better August?
I can indeed as a positive rush to pay out comes from RDS, SSE, BP, Aviva, Standard Life, Imperial Brands, and Lloyds.
In particular, Lloyds, BP, and Aviva, are 3 of my 4 big hitters (the 4th being National Grid which delivered last month).
As a newer holding, Standard Life Aberdeen will also make its maiden payment into my portfolio.

All of that being the case, September's payments will almost (not quite), double that of August's which is very satisfying following the unusual drought in July, courtesy of my portfolio pack being reshuffled and dealt over the last year or two.

It also means that the flow of dividends will start to slow for the remainder of the year until National Grid starts 2019. I can see a resulting yield of around 4.1% based upon my 2017 starting value but we will see how that actually stacks up come the year-end.

	Rate
Company	c.	p.	Xd	Paid
National Grid		15.49	23/11/2017	10/01/2018
Vodafone		4.84	23/11/2017	02/02/2018
BAT		48.8	27/12/2017	07/02/2018
Apple	63		12/02/2018	15/02/2018
SSE		28.4	18/01/2018	16/03/2018
Berkeley Group		56.75	01/03/2018	23/03/2018
RDS 'B'	47		15/02/2018	26/03/2018
Imperial Brands		59.51	22/02/2018	29/03/2018
BP	10		15/02/2018	29/03/2018
Galliford Try		28	15/03/2018	06/04/2018
BAT		48.8	22/03/2018	09/05/2018
Aviva		19	05/04/2018	17/05/2018
Apple	73		14/05/2018	17/05/2018
Lloyds		2.05	19/04/2018	29/05/2018
RDS 'B'	47		10/05/2018	18/06/2018
BP	10		10/05/2018	22/06/2018
Imperial Brands		28.43	24/05/2018	29/06/2018
Vodafone		10.23	07/06/2018	03/08/2018
BAT		48.8	28/06/2018	08/08/2018
National Grid		30.44	31/05/2018	15/08/2018
Apple	73		10/08/2018	16/08/2018
RDS 'B'	47		09/08/2018	17/09/2018
SSE		66.3	26/07/2018	21/09/2018
BP	10.25		09/08/2018	21/09/2018
Aviva		9.25	16/08/2018	24/09/2018
Standard Life Aberdeen		7.3	16/08/2018	25/09/2018
Lloyds		1.07	16/08/2018	26/09/2018
Imperial Brands		28.43	23/08/2018	28/09/2018
Standard Chartered	6		09/08/2018	22/10/2018
BAT		48.8	04/10/2018	15/11/2018
Galliford Try		49	08/11/2018	05/12/2018

August 2018: Portfolio Update

August brought further swings with my portfolio falling a smaller -0.51% v. a -4.08% fall in the FTSE 100.
YTD that leaves my index marginally positive for the year to date at 0.93% v. a -3.32% decline in the FTSE.
The big movement and news coming from Apple (in my portfolio at least), which once breaching $207.05 became the first US company with a trillion dollar market capitalisation which was enough to see it run as high as $227.
This came as Apple reported consensus beating 3rd quarter results (www.apple.com: apple-reports-third-quarter-results).
Elsewhere there were widespread falls led by Vodafone (-11.56%), and BAT (-11.41%). With just 2 other gainers in Standard Life (+1.47%), and Galliford Try (+4.02%), in addition to Apple, the falls managed to outweigh the gains.

And after last month's dividend drought, it was nice to see a good contribution this month with National Grid leading the way.

Merchant Adventurer's Index
			Forecast	1 month	YTD	All time
	Price	% holding	Div. yield	% gain	% gain	% gain
Lloyds	59.30p	23.61%	5.60%	-4.94%	-12.87%	-3.96%
Aviva	485.00p	12.32%	6.04%	-3.00%	-4.24%	35.59%
National Grid	810.00p	11.89%	5.84%	-0.41%	-7.14%	67.37%
BP	547.30p	11.95%	5.64%	-4.54%	4.71%	31.55%
Apple **	$227.63	12.82%	1.02%	20.54%	39.73%	503.33%
BAT	3721.50p	2.48%	5.41%	-11.41%	-25.84%	10.95%
Imperial Brands	2744.00p	3.85%	6.85%	-6.09%	-7.25%	14.45%
Royal Dutch Shell	2540.50p	2.75%	5.65%	-4.90%	1.28%	-1.31%
Vodafone	164.50p	1.87%	8.26%	-11.56%	-27.79%	-32.14%
SSE	1253.00p	1.21%	7.78%	0.24%	-5.08%	8.87%
Galliford Try	970.00p	2.62%	7.21%	4.02%	24.42%	19.16%
Standard Chartered	627.10p	2.97%	2.72%	-8.85%	-11.36%	-11.36%
Standard Life Aberdeen	316.90p	4.20%	7.49%	1.47%	-6.10%	-6.08%
Cash		5.46%	0.00%
		100.00%	4.95%
				1 month	YTD	All time
Virtual Portfolio gain (incl. Dividends)
- 1 month gain   2633.40	2608.23			-0.51%
- YTD gain         2583.68	2608.23				0.93%
- 104 mnth gain 1000.00	2608.23					160.82%
Unit Price - £	2.60823	(Starting price - £1)
FTSE gain (excl. Dividends)
- 1 month gain   7678.20	7432.42			-4.08%
- YTD gain         7687.80	7432.42				-3.32%
- 104 mnth gain 5412.88	7432.42					37.31%
Transactions:
03/08/2018	Div	Vodafone @ 9.09p per share
08/08/2018	Div	BAT @ 48.80p per share
16/08/2018	Div	National Grid @ 30.44p per share
20/08/2018	Div	Apple @ 48.69p per share
31/08/2018		Funds Removed @ 2.60823 (Aug.18 Index close)
Notes:
*     US Dividends are adjusted for exchange rate and 15% withholding tax
**   Sterling : Dollar exchange rate = £1: 13 as at 31/08/2018
*** Sterling : Euro exchange rate = £1: 1.11 as at 31/08/2018

Click to enlarge, close to return.