Brexit Causes ‘Humbug’ to Throw in the Towel

Monday 26th September. Its never easy making money from the market, but even when I’m doing badly I love almost every minute of it. Its therefor with sadness that I’ve decided to close the DIY Investor Portfolio, for reasons I’ll detail below. I originally set it up with £50k, the idea being to trade/invest in Small Cap and Aim shares, looking to make 20% a year.

I’ve failed and  whilst it hasn’t been a disaster nor has it been a success. I over traded and lost money in 2014, had a rethink and calmed down, making money in both 2015 and this year. I don’t think there’s any point in giving you a blow by blow account of exactly what happened trade by trade as its history, but the bottom line is that I took 68 trades, 43 of them lost money and 25 of them made it. Because I tried to ‘stop the bleeding quickly’ aiming to cut loss’s in short order but run profits, the overall position from start to finish is a profit of £3004.

Notable success’s were AB Dynamics and Cranswick where I doubled my stake in each case, my biggest failure was Tungsten where I lost three quarters of my stake when I broke my own rules as it got away from me. DUH.

‘post Brexit I’m finding it almost impossible to value these small companies’

The reason for closing the portfolio isn’t principally its lack lustre performance, but that post Brexit (which I totally support) I’m finding it almost impossible to value these small companies, as there are now too many imponderables. Compounding my problem is that its always been a dark art timing the trades because price action isn’t as reliable a guide as it is with the bigger more liquid shares. Small company prices are ‘controlled’ by the market makers to quite an extent, they are also very susceptible to tips and rumours.

Adding all these together makes the current portfolio ‘the tooooooooooooooooooo hard file’ and signals its time for me to not just move on, but hopefully to MOVE ON UP. I’ve enjoyed the high and low points of the last two and a half years greatly, I hope you have as well.

The new plan is to refine and extend the SWING TRADING that I do in conjunction with my trading partner Simon and report the results here in as close to real time as busy lives permit. Currently I’ve got two trades running, a long position (betting the price will rise) in Petrofac (PFC) opened at 805 and currently 830 as I write. The first target to take partial profits is 850, the final target is 875 and the stop is 779. The second position is in Spot Gold via a contract for difference. Opened at 1322, first target was 1340, I say ‘was’ because I closed half the position when it reached that last Thursday (it since fell back) and is currently 1337.5. Final target is 1360, the stop was moved up from 1295 to 1322 when the first profit target was met.

Visit Diary of a DIY Investor to share Humbug’s highs and lows