Becoming more bearish

MichelleN

Alexland said:

MichelleN said:

You recently changed from CTY to MUT - do you only want to consider IT’s for this part of your portfolio? If you could invest in an OEIC you may want to consider Royal London Sustainable Leaders Trust C either Acc or Inc versions.
Also, your point on stocking up on good quality companies that are underpriced at the moment, I have recently taken a position in GSK, AZN and UVLR all at in my opinion decent ‘buy in’ prices so I’m hoping their share prices improve over the next few years as well as the yields they produce. I would be interested in your thoughts on this?

Most of our money is in global tracker ETF/funds so we are only using ITs as a 'style tilt' in our S&S ISAs. GSK, AZN and ULVR are all in the MUT top 10 but I don't have the time or inclination to do the mountains of research required to be active in buying individual shares and keep track of movements in earnings or dividend yield. They obviously each have their own risks so running a sufficiently diverse portfolio would be important.

RL Sustainable Leaders seems to be a good active fund but with a heavier weighting to the growth style the key ratios are less attractive and the OCF is probably more than I would be willing to pay. Do those companies have superior prospects? Probably but then as usual that already seems to be priced in.

You are most probably right in your assumptions. I just feel if you buy individual shares in good companies at the right price then sometime in the future (who knows when) the share price should improve over time.
Regarding the RL fund, I don’t think the OCF really puts investors off, in my opinion it is a really good fund that only invests in well established companies and its results over 1, 3, 5 and 10 years are better than CTY or MUT.

BananaRepublic

Voyager2002 said:

BananaRepublic said:

There is certainly a minority, I have no idea how large, of self hating people on the soft left. I've spoken to countless remainers and a common theme is distaste for our politicians, and great respect for EU politicians. Another theme is a distaste for the British working classes. Several people told me with a straight face that people below a certain intelligence level should not be allowed to vote. Many have said you should not allow the 'people' to vote, only 'educated' politicians who know what they are doing should be allowed to vote. And often these people express massive guilt about the 'crimes' of the British Empire, but ignore the fact that countless empires, including non European ones, have committed worse crimes. I don't assume most remain voters hold these views, but they are very common among the vocal opinion formers, including those interviewed on the radio.

There is no element of self-hatred in anyone who compares Boris Johnson unfavourably with Angela Merkel. It would be a perverse kind of patriotism that obliged one to deny that the former was a scoundrel and liar simply because he is our scoundrel and liar.

Brexit is baffling for anyone who believes in democracy. Perhaps the lesson is that questions whose analysis requires a certain amount of technical knowledge should not be put to a popular vote: we do after all have a system of representative democracy. Politicians are paid (handsomely) to put in the time required to get to grips with such issues: ordinary people with full-time jobs and family commitments are not in a position to do this.

QED.
You don’t have a clue what democracy means. By the way, Merkel is a German politician, not an EU one. And she is known for having stabbed her mentor in the back. 

Alexland

MichelleN said:

Regarding the RL fund, I don’t think the OCF really puts investors off, in my opinion it is a really good fund that only invests in well established companies and its results over 1, 3, 5 and 10 years are better than CTY or MUT.

Yes that's because according to Morningstar X-Ray it's 38% weighted to growth, which over the past decade was the right place to be (until we saw the recent style rotation for however long that lasts), compared to MUT at 25% and CTY at 8%. The below images (from the Investment Trust Handbook 2021) of the relative performance of value versus growth might help explain. You can see why boards ran out of patience and started to pull the plug on value managers like Mark Barnett for accelerating poor performance during 2019.

HHarry

Brexit is baffling for anyone who believes in democracy. Perhaps the lesson is that questions whose analysis requires a certain amount of technical knowledge should not be put to a popular vote: we do after all have a system of representative democracy. Politicians are paid (handsomely) to put in the time required to get to grips with such issues: ordinary people with full-time jobs and family commitments are not in a position to do this.

  They may be paid handsomely, but they don’t seem to be able to get to grips with the issues.
  With the same set of data each party can come up with a different solution, which unsurprisingly will probably reflect the underlying policies of that party.

Alexland

Good article on CNBC this morning

https://www.cnbc.com/2021/01/09/stocks-enter-the-manic-exuberant-bull-market-stage-but-that-doesnt-mean-its-near-ending.html

"The tape looks near a point where the only plausible next move is a bit of a cool-off period or an overheating phase that threatens to scorch the careless down the road" and "Tesla’s valuation has outpaced anything observable in the business by such a distance that it’s become almost a pure abstraction".

BananaRepublic

Voyager2002 said:

Brexit is baffling for anyone who believes in democracy. Perhaps the lesson is that questions whose analysis requires a certain amount of technical knowledge should not be put to a popular vote: we do after all have a system of representative democracy. Politicians are paid (handsomely) to put in the time required to get to grips with such issues: ordinary people with full-time jobs and family commitments are not in a position to do this.

So you think that the invasion of Iraq is an example of Parliament being wiser than the plebs?

MaxiRobriguez

HHarry said:

Brexit is baffling for anyone who believes in democracy. Perhaps the lesson is that questions whose analysis requires a certain amount of technical knowledge should not be put to a popular vote: we do after all have a system of representative democracy. Politicians are paid (handsomely) to put in the time required to get to grips with such issues: ordinary people with full-time jobs and family commitments are not in a position to do this.

  They may be paid handsomely, but they don’t seem to be able to get to grips with the issues.
  With the same set of data each party can come up with a different solution, which unsurprisingly will probably reflect the underlying policies of that party.

That isn't a problem though. We vote for our representatives, and whichever local representative gains the most votes in their constituency goes to WM to vote based on their views. Views will differ but the majority view in WM will be able to pass votes.

That's how our democracy has worked for the entire time everyone on this forum has been alive. 

Brexit was put to the electorate to settle an internal problem in the Tory party. Cameron thought he'd win the referendum easily and it would quell the dissenting eurosceptic voices within his own party and allow him to lead with impunity for longer. That Cameron misjudged the mood of the electorate and left WM with a house of commons broadly in favour of EU integration, was his fault. The 80 seat majority election in 2019 was sort of inevitable when those MPs were not able to come to an agreement on how we were to proceed, and when the Lib Dems decided to fight Labour in every marginal seat. 

What we now have is a Government composed solely of people put in place to do one thing, which has already been achieved. Now they get three and a half years at least, without any real opposition, to do whatever they like. That isn't good for UK democracy. 

coastline

Alexland said:

Good article on CNBC this morning

https://www.cnbc.com/2021/01/09/stocks-enter-the-manic-exuberant-bull-market-stage-but-that-doesnt-mean-its-near-ending.html

"The tape looks near a point where the only plausible next move is a bit of a cool-off period or an overheating phase that threatens to scorch the careless down the road" and "Tesla’s valuation has outpaced anything observable in the business by such a distance that it’s become almost a pure abstraction".

All the stuff I look at points to a correction of some kind but as we know markets can move higher to bursting levels. For drip feeders and buy and hold these things don't matter but I can well understand some posters being cautious about investing large lump sums. When it's not your money it's easy to reply to posts on here about such cases. What's plain to see is " buy the dips " has worked every time in history as yet again we are on all time highs.
Markets are at short term extremes as indicated in many articles out there. 
ErwTjajXUAArVeN (900×537) (twimg.com)
Everything's Too Expensive: Stocks, Bonds, You Name It - Bloomberg
Technically Speaking: S&P 500 - Trading At Historical Extremes - RIA (realinvestmentadvice.com)

itwasntme001

Alexland said:

MichelleN said:

Regarding the RL fund, I don’t think the OCF really puts investors off, in my opinion it is a really good fund that only invests in well established companies and its results over 1, 3, 5 and 10 years are better than CTY or MUT.

Yes that's because according to Morningstar X-Ray it's 38% weighted to growth, which over the past decade was the right place to be (until we saw the recent style rotation for however long that lasts), compared to MUT at 25% and CTY at 8%. The below images (from the Investment Trust Handbook 2021) of the relative performance of value versus growth might help explain. You can see why boards ran out of patience and started to pull the plug on value managers like Mark Barnett for accelerating poor performance during 2019.

That is a sample size of exactly 2.  Don't think it is sensible to make investment decisions based on that (not saying you are personally).

For all we know we could be in a new paradigm where automation and AI is the new norm and that can continue to be good for growth stocks at the expense of value.

Alexland

itwasntme001 said:

That is a sample size of exactly 2.  Don't think it is sensible to make investment decisions based on that (not saying you are personally).

For all we know we could be in a new paradigm where automation and AI is the new norm and that can continue to be good for growth stocks at the expense of value.

Yes agree it's about absorbing as much information as possible to understand what's going on. Investment styles are complicated one of the arguments for the recent underperformance of value is that the increased rate of disruption is making established business models obsolete but then we only need to look back at the US stock market 120 years ago to see how much has changed.

coastline said:

All the stuff I look at points to a correction of some kind but as we know markets can move higher to bursting levels. For drip feeders and buy and hold these things don't matter but I can well understand some posters being cautious about investing large lump sums. When it's not your money it's easy to reply to posts on here about such cases. What's plain to see is " buy the dips " has worked every time in history as yet again we are on all time highs.

That "Everything's Too Expensive" article was good and yes a correction looks reasonably likely in the next few months. They happen every year or two and are more likely when markets are high so valuations have room to drop. Despite a few tulip bubbles a lot of companies look okay so there's nothing that would lead me to think we are about to go into a deep crash while interest rates remain low. Where we differ is that I am going to stay invested rather than risk selling out and never getting back in again at below the current price.