The Investment Thread

[101]

40 minutes ago, MixuFruit said:

In the past perhaps, there's a retail investor effect of course, boosted by app based trading, bored folk stuck at home because of covid etc. But with Tesla entering the S&P500 there is now an institutional obligation for passive funds that track the index to buy Tesla stock, regardless of its fundamentals. As has been said in this thread, a bit of a generous valuation is fine as it is incorporating anticipated market advantage in future as an innovator in this field.

I was scoffing when its PE ratio was 1200, it's now 1700. The whole rationale of passive investing is the market is the most efficient processor of information on the value of equities but f**k me it doesn't seem to be able to fulfil this function just now. 

ETA I mean look at this and tell me it's not eventually going to end in tears

Yes utterly terrifying that not only will it slump eventually it will do so in the trashed world economy.

[arab_joe]

18 hours ago, MixuFruit said:

0.7% on top of the management fees of whatever you're actually buying is very high imo.

Management fees are about 0.15% I believe, so overall it is about 0.85%.  But good to know, thanks.  Will see if it can be whittled down before I make another deposit.

15 hours ago, Sergeant Wilson said:

Lawyers are worth it, but IFAs arent? Isn't that professional snobbery?

Both are worth whatever clients will pay for them, I guess.  

8 hours ago, Granny Danger said:

Do IFAs need to have a recognised qualification?  I think they need to be registered with the FCA but not sure if that registration is dependent upon a particular qualification.

I’ve only had initial meetings with a couple of them and was very unimpressed.

I'm not sure about the UK, but in the Middle East IFAs typically to be uneducated, unregulated salesman.  I've been thoroughly unimpressed.  I met with one in London, once, in the hope he would be a bit more straight-laced, but it turned out that he was actually based in Monaco or something and his fees were exorbitant.  

8 hours ago, Sergeant Wilson said:

So have I been, but I thought it was a bit ironic claiming lawyers were worth what they could wring out of people and the criticise another "profession" for doing the same.

That isn't what I said at all - I am all for the IFA (or any other professional) charging whatever he thinks he is worth.  I just chose not to pay for it,  because in my eyes he was not worth it.

[Fuctifano]

Since 2013 IFAs or tied advisers have had to have CII level 4 Diploma in financial planning (or equivalent) to give investment advice, prior to that it was a lower level Financial Planning certificate. 

I have said diploma (and more) but I'm not an IFA, work on the other side of the fence in compliance. 

Edited January 22, 2021 by Fuctifano

[hk blues]

5 hours ago, arab_joe said:

...but it turned out that he was actually based in Monaco or something and his fees were exorbitant.  

 

If I had a Financial Advisor, I'd want them to be based in Monaco t.b.h.

[beefybake]

On 21/01/2021 at 05:39, arab_joe said:

Anyone use a robo-advisor?  After being put off by IFAs and their fees, in July (about 5 years after I should have done so) I invested some money with Sarwa (it is based out here but I am sure there are UK alternatives).  Their fees seem to be relatively low at 0.7% and the return in 6 months is over 15%, so quite pleased with it so far.  

If what you're referring to is things like Nutmeg, Wealthsimple, Wealthify etc.., then yes, I do.

Not one of those, but  an app-only outfit called Tickr. 

They were set up about 2 years ago; I've been investing regularly each month for about the last 18 months.

They concentrate on 'Impact Investing', and there is a choice of themes.  I chose the Climate Change theme, as it aligned with my values.

Each theme appears to be comprised of about 3  ETF's.   The theme I chose has an ETF devoted to Clean Energy.  Also one on Global Water.

And a third ETF made up of green bonds.  With a small percentage of gilts in there, as well.

You can choose the degree of risk you're prepared to tolerate, Cautious, Balanced, Agressive/Adventurous, and that defines

the percentages of where your money goes within the theme.

PLUSES

The app is easy to use, and investing/topping up is a one click exercise.

DOWNSIDES

They're very sales/marketing focused, and barely 3 or 4 days goes by before I receive yet another email

urging me to subscribe to this or that.  Offset my carbon history etc, etc.  For which I assume they take  a cut.

They also refer to customers and investors as 'users'.   As I generally agree with the quite famous phrase..

"... the only people who refer to their customers as users are software companies and drug dealers...",

being called a user iirritates me.

PERFORMANCE

Underneath it all, they're not really doing much different to other robo investors, except that as far as I can see

they are ahead of the game in terms of Impact Investing.  As I have been investing regularly and steadily, that

smooths out the ups and downs.  One of the ETF components of my theme has been something of a star in the last

year ; the Clean Energy ETF has been, I think, the best performer of all the ETF's out there.  So I have done rather well.

Not sure if I'll stay with them, as I dislike being heavily marketed at.

The majority of what I invest goes into Vanguard ETF/Index funds.  I like the company, their fees are low, they're not constantly

pestering me, and their reputation is solid.

 

 

 

Edited January 22, 2021 by beefybake

[IrishBhoy]

Never seen this thread before, had a good read through there. I’ve got the majority of my money invested into Boeing, Airbus, Boohoo Group and Tiziana Life Sciences, and smaller amounts in various others. TILS is my biggest holding by a good margin, but the price has been pretty volatile lately which is worrying. I got in at a good entry though so happy to hold long term, certainly until at least the end of this pandemic. 
 

Boeing has obviously been an absolute disaster, and having their planes fall out the sky on an almost yearly basis isn’t great for the old share price. Topped up after the 737-max debacle seemed to be sorted, but the incident last week has sent the price down. Expected Airbus to react positively against the Boeing incident, but that didn’t happen. Possibly the pandemic and the state of that industry at the moment playing a bigger part in holding it down. If, as expected, the holiday and air travel industry booms after the pandemic ends then these current prices are going to look on the low side, although I’m unsure how much the current price already reflects that. I know Airbus had a large order book before the pandemic hit but I can’t find too much information out there around when/if they plan to have these planes built and sold as some carriers have cancelled their orders. 

Also got a bit in some safer investment funds and a big tech tracker, which have actually done surprisingly OK in 2020 considering what has been happening in the world. 

[hk blues]

2 hours ago, IrishBhoy said:

Also got a bit in some safer investment funds and a big tech tracker, which have actually done surprisingly OK in 2020 considering what has been happening in the world. 

Wasn't 2020 a good year for funds in general, given the performance of stock markets?

[Granny Danger]

15 minutes ago, hk blues said:

Wasn't 2020 a good year for funds in general, given the performance of stock markets?

The performance of funds during 2020 and into the first few weeks of this year has shown the total disconnect between the stock market and the real world.

I can only assume there is going to be a correction sometime soon.

[IrishBhoy]

29 minutes ago, hk blues said:

Wasn't 2020 a good year for funds in general, given the performance of stock markets?

There was a massive dip around the first lockdown, which recovered quite quickly. And also a sharp rise on the announcement of the vaccine. I don’t have enough money invested to see any sort of serious gains, it’s a bit of a safety net if something was to come and wipe out my other investments. Without checking I think the tracker fund was up around 8.5% for the year, and the investment fund was heavy on the big pharmaceuticals which haven’t risen as much, maybe 3%. 
 

Edit - Just looked at the 1year graph and there wasn’t a particularly sharp rise on the vaccine announcement, although there was a slight rise. It grew steadily across the year, with the only noteworthy dip being a 15% fall on the announcement of the first lockdown, which then recovered its price within days. 

Edited January 23, 2021 by IrishBhoy

[Granny Danger]

1 hour ago, IrishBhoy said:

There was a massive dip around the first lockdown, which recovered quite quickly. And also a sharp rise on the announcement of the vaccine. I don’t have enough money invested to see any sort of serious gains, it’s a bit of a safety net if something was to come and wipe out my other investments. Without checking I think the tracker fund was up around 8.5% for the year, and the investment fund was heavy on the big pharmaceuticals which haven’t risen as much, maybe 3%. 
 

Edit - Just looked at the 1year graph and there wasn’t a particularly sharp rise on the vaccine announcement, although there was a slight rise. It grew steadily across the year, with the only noteworthy dip being a 15% fall on the announcement of the first lockdown, which then recovered its price within days. 

I’m assuming your in U.K. stocks/funds.

You should have been in US technology.  Here’s the NASDAQ for the last 12 months.  42%.

 

[IrishBhoy]

3 minutes ago, Granny Danger said:

I’m assuming your in U.K. stocks/funds.

You should have been in US technology.  Here’s the NASDAQ for the last 12 months.  42%.

 

My tracker fund is top 10 US Big Tech; Google, Apple Facebook etc. I said earlier that, from memory, I thought it was up around 8.5%. I just went and checked and it’s actually up 35.45% for the year.
 

Those companies have benefitted from the pandemic so it’s not actually that surprising to see that figure. Netflix is another one that’s seen their share price grow this year, and it could rise further yet the longer the pandemic continues and the cinemas are shut. Films due for cinema release in the first half of this year will surely need to be sold to a streaming service unless it’s something big, something that’s expected to bring in millions from box office sales. Netflix will be in a good position to hoover up some of these titles, although I did read that they would only be available for a limited time and then removed so that the studios could claw back some more money from the cinema sales. 

[Granny Danger]

4 minutes ago, IrishBhoy said:

My tracker fund is top 10 US Big Tech; Google, Apple Facebook etc. I said earlier that, from memory, I thought it was up around 8.5%. I just went and checked and it’s actually up 35.45% for the year.
 

Those companies have benefitted from the pandemic so it’s not actually that surprising to see that figure. Netflix is another one that’s seen their share price grow this year, and it could rise further yet the longer the pandemic continues and the cinemas are shut. Films due for cinema release in the first half of this year will surely need to be sold to a streaming service unless it’s something big, something that’s expected to bring in millions from box office sales. Netflix will be in a good position to hoover up some of these titles, although I did read that they would only be available for a limited time and then removed so that the studios could claw back some more money from the cinema sales. 

The 35.45% for the year is virtually identical to my collection of 10 funds.  Crazy stuff tbqh.

[IrishBhoy]

4 minutes ago, Granny Danger said:

The 35.45% for the year is virtually identical to my collection of 10 funds.  Crazy stuff tbqh.

Had a look at the Nasdaq composite index chart for 2020, and it’s showing a total growth of around 43%, so our returns are both tracking slightly under its market growth. If you have a broad range of funds then you would expect it to be in the same ball park as that figure. 

[beefybake]

13 hours ago, MixuFruit said:

Good article about some of the more down-market sources of investment information. Reddit looks terrifying.

https://www.epsilontheory.com/off-wall-street-and-off-off-wall-street/

 

 

Having watched 'The Big Short',

several times,

I'm not too sure I'd put much faith in the Wall Street Journal either.

[thistledo]

Looking at Bitcoin recently makes me absolutely sick tbh. The price earlier on in the week was around £28k. I've worked in technology for close to two decades and thought I was better off with corporate bonds, funds, shares and ETFs rather than, in my own head, cryptocurrency nonsense. Having money available and not going for any crypto was a massive mistake. I'm now thinking look at the next up and coming crypto and invest hard. So many now though it's a tough call. Vechain and Cardano are two I've gone for, a bit puntery, but also these have real value in the world if they really start to take off. 

Anyone else venturing into crypto?  

[Granny Danger]

26 minutes ago, thistledo said:

Looking at Bitcoin recently makes me absolutely sick tbh. The price earlier on in the week was around £28k. I've worked in technology for close to two decades and thought I was better off with corporate bonds, funds, shares and ETFs rather than, in my own head, cryptocurrency nonsense. Having money available and not going for any crypto was a massive mistake. I'm now thinking look at the next up and coming crypto and invest hard. So many now though it's a tough call. Vechain and Cardano are two I've gone for, a bit puntery, but also these have real value in the world if they really start to take off. 

Anyone else venturing into crypto?  

I have tried a few times to get my head around crypto and cannot.  Wouldn’t invest in it because I cannot understand it.

I think it’s a house of cards, if you can get in and out at the right time then good luck to you.

[IrishBhoy]

1 hour ago, thistledo said:

Looking at Bitcoin recently makes me absolutely sick tbh. The price earlier on in the week was around £28k. I've worked in technology for close to two decades and thought I was better off with corporate bonds, funds, shares and ETFs rather than, in my own head, cryptocurrency nonsense. Having money available and not going for any crypto was a massive mistake. I'm now thinking look at the next up and coming crypto and invest hard. So many now though it's a tough call. Vechain and Cardano are two I've gone for, a bit puntery, but also these have real value in the world if they really start to take off. 

Anyone else venturing into crypto?  

I have dabbled in Bitcoin but I would need to do some research before I put any sort of serious money in. I still don’t fully understand what is backing up the price, if it’s simply a case of supply and demand and people are buying in the expectation that it will become an accepted currency in the future. The price is so volatile over these past few months that if you enter at the wrong time you could be left holding a bad trade. There’s a lot of people certain it’s going to hit £100k, £500k, £1M in the future, I don’t know enough about it yet to say if it will or won’t. 
 

Im like you in that I’m kicking myself a bit for not getting involved when I first became aware of it. That was back when people were still ‘mining’ Bitcoins, and I had a look into how to do that but it seemed to be something well above my head, and I think you needed expensive computer software to do it. That was back when it was about $1.50. 
 

I posted a topic on the gambling forum about a platform called Sorare that uses Ethereum as its currency. It’s a fantasy football game where you can win ETH as a prize, as well as player cards that can be sold on their market and then either withdrawn or put back into the platform. If you are into crypto as well as football it might be something you enjoy. 

Edited January 23, 2021 by IrishBhoy

[Zetterlund]

Bitcoin should be looked at purely as a high-risk speculation imo, with no 'real' fundamentals other than the brand advantage of being the first mover. Despite what the maximalists say it will never be adopted by the mainstream as a payment network, as it just doesn't work when the network gets busy. By that I mean the transaction fees get more expensive the busier the network gets, so in times of hype like we're seeing now with the higher prices it can cost more in fees than the amount you're moving. This is an issue for Ethereum too.

There is more of an argument for it as a store of value, or a 'digital gold' as the marketing goes. Basically buy it, hold onto it and hope someone pays more for it later. The value supposedly comes from its fixed supply so it can't be inflated away in future like other currency. The problem with this is that an infinite number of new cryptocurrencies can be created, including tweaked copies of bitcoin like the other ones already in existence (Bitcoin Cash, SV, Gold, Diamond, etc). So market share can always be diluted.

I think the biggest risk overall is regulation. If it really got to the point that bitcoin was damaging the banks and stock markets, eg stocks were selling off and the bitcoin price was benefitting, they would simply make it illegal. This would put off the vast majority of retail buyers and all institutions.  There's a very good chance it will keep going higher for a while before that happens though.

I'm still interested in cryptos and some do have real utility. I'm mining coins at home for a project which is little-known but has real potential. If it doesn't lead to anything it has at least been an interesting hobby learning to build and operate the miners etc.

I think if you're building an investment portfolio there is a place for cryptos as a small part for speculation purposes, but in reality the huge values assigned to many coins  are based mainly on FOMO and the greater fool theory. Maybe the traditional stock markets aren't too different these days in some cases.

[sparky88]

20 hours ago, MixuFruit said:

Good article about some of the more down-market sources of investment information. Reddit looks terrifying.

https://www.epsilontheory.com/off-wall-street-and-off-off-wall-street/

 

 

Been folowing r/wallstreetbets since last week. They've caused the price in Gamestop shares to nearly double in 2-3 days. Sorely tempted to buy on Monday,but probably won't as against all my instincts. But price will most likely go to something ridiculous again.

[IrishBhoy]

5 minutes ago, Zetterlund said:

Bitcoin should be looked at purely as a high-risk speculation imo, with no 'real' fundamentals other than the brand advantage of being the first mover. Despite what the maximalists say it will never be adopted by the mainstream as a payment network, as it just doesn't work when the network gets busy. By that I mean the transaction fees get more expensive the busier the network gets, so in times of hype like we're seeing now with the higher prices it can cost more in fees than the amount you're moving. This is an issue for Ethereum too.

There is more of an argument for it as a store of value, or a 'digital gold' as the marketing goes. Basically buy it, hold onto it and hope someone pays more for it later. The value supposedly comes from its fixed supply so it can't be inflated away in future like other currency. The problem with this is that an infinite number of new cryptocurrencies can be created, including tweaked copies of bitcoin like the other ones already in existence (Bitcoin Cash, SV, Gold, Diamond, etc). So market share can always be diluted.

I think the biggest risk overall is regulation. If it really got to the point that bitcoin was damaging the banks and stock markets, eg stocks were selling off and the bitcoin price was benefitting, they would simply make it illegal. This would put off the vast majority of retail buyers and all institutions.  There's a very good chance it will keep going higher for a while before that happens though.

I'm still interested in cryptos and some do have real utility. I'm mining coins at home for a project which is little-known but has real potential. If it doesn't lead to anything it has at least been an interesting hobby learning to build and operate the miners etc.

I think if you're building an investment portfolio there is a place for cryptos as a small part for speculation purposes, but in reality the huge values assigned to many coins  are based mainly on FOMO and the greater fool theory. Maybe the traditional stock markets aren't too different these days in some cases.

You seem to be pretty clued up about it, informative post. Is there an entity out there who actually mint Bitcoin? Where does it come from? If the price was to reach a new high of say £50k, who, or what, is issuing the shares at that price? It starts to hurt my head when I think about it too much, it’s hard to get your head around the fact it’s not backed up by anything tangible.