Watching the watchlist….

Posted: October 27, 2014 in Watchlist

I’m probably not alone in being guilty of growing a watchlist far beyond a manageable size, ignoring monitoring alerts, and forgetting its real purpose. In fact I’m guessing many novice investors such as myself, probably treat portfolios in a similar manner.

I was perusing through mine today, and realised that I hadn’t actually maintained it in quite a while. There were companies that had already matured past my intended entry point, or had declined enough to be now unattractive.  Yet I had recently added more. It was a sprawling list with a few notes and little value.

All the monitoring tools and alerts in the world won’t help, if as an investor I am not disciplined enough to action the data.

In a similar fashion to my portfolio of owned shares.  I had started my watchlist with an intention of ruthlessly monitoring the companies over a period of time. Culling all those that no longer met my criteria, or purchasing those that became attractive investments. 

I want my watchlist to be a real useful tool, so over the next few days I will revisit the list according to my investment criteria. And will reset my alerts,  and monitors, and actually use my watchlist as intended.

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Tesco Turmoil continues…

Posted: October 24, 2014 in General, Tesco

It seems a very fortunate decision that I sold out of Tesco (TSCO:LN) while still in profit (albeit for personal reasons other than investment prospects).  Admittedly things were choppy even back then, but I’m sure nobody apart from those involved could have second guessed the sheer scale of events and pace of decline in recent months. I was prior to these recent revelations, even optimistic over longer term prospects.

That for me however has all changed anyway. Partly due to a few years of UK economic tightening, and partly due to the efforts by the budget chains to lure a broader spectrum of customers in, with keen pricing, and premium budget offerings.

While Tesco remain an economic gargantuan, I think we may be in for a long period of decline in market share for all the big three. Why? Well in my opinion it is now clear that the UK supermarket sector has evolved fundamentally. The  previous habitual shoppers, faithful to a single store and doing a weekly shop are all but gone, and replaced with nomadic grazers, favouring to spend at the budget chains for the majority everyday items, and visiting premium supermarkets for what remains.  In my opinion this trend is noticeable in the re-balancing seemingly taking place in market share, between the big three and the rapid rise of the budgeteers like Aldi and Lidl. This trend I think will remain set for years to come I believe.

How this will translate in future sales and the bottom-line for the likes of Tesco in the next few years will be critical.  Certainly I’m going to watch with interest, a turnaround I think is an incorrect terminology, we are surely talking in terms of halting a decline.

From an investors perspective,  opportunities will surely present themselves during this transition. I’m just not sure I’m going to be rushing back anytime soon.

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After having started the year with the intention of adding to the portfolio rapidly, specifically to broaden my risk I added Beazley (BEZ:LN) Lloyds (LLOY:LN) and Monitise (MON:LN). Have been happy with at least two of these purchases, and this years’ experience (so far) has only been soured by a stalled price for Lloyds (LLOY:LN) meaning I am carrying a small loss.

However since then I have almost had to have a Fire Sale type situation and have had to sell a percentage of the portfolio for home improvements. So out have gone my holdings in Legal & General (LGEN:LN) Barclay’s (BARC:LN) and Tesco(TSCO:LN) had to go as it crossed the Stop-Loss threshold. Fortunately on this occasion it was a smart move, as Tesco is languishing at just below 300 at time of writing. Longer term I may yet buy back-in but with the falling profits I can’t see how the generous dividends can continue much longer.

Looking at the year ahead for my personal investing journey I have the prospect of having to purchase a new car this year, and funding two overseas holidays, so my stock market ambitions are likely to be limited to one or two further additions this year. Sometimes life just gets in the way.

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