Shoot at the elephant and miss, and it may trample the jungle for years: Thoughts from Douglas

Boris Johnson’s departure from the role of Prime Minister must now be a certainty. However, this has been curiously conducted, and will he really leave politics by being forced to stand down from being a Member of Parliament?

It’s wait and see time, but I think that the media and people that orchestrated his departure would do well to remember the above saying about the elephant.

I am not a Boris fan, but I do give him credit for working hard on the problems of Brexit, Covid and the Ukraine. What I struggle to forgive is his lack of integrity, and his inability to form a strong, knowledgeable, and directed cabinet of Ministers capable of implementing a long-term plan to improve the country.

They have thrown vast amounts of tax-payers money at every problem without sufficient investigation into who will benefit from this largesse. This borders on the criminal. How many companies’ fortunes and millionaires have been made from this approach, and how much of their product was not up to scratch? Planes, Aircraft Carriers, the HS2, and Covid PPE come instantly to mind, but there are a raft of others.

At the present time, I struggle to see who in politics from any political party can lead the country forward to a more equal, constructive, financially secure, and honourable future. Hopefully, fingers crossed, whoever wins between Sunak and Truss to lead the Conservative Party, will be that person.

I am not finding life easy at the moment, and one of my great comforts and enjoyment comes from gardening. Well, blow me down, if the other morning I was told that I had to look forward to a hose pipe ban. Now I do understand that the lack of rain and the imminent declaration of a drought does require some sort of action.

This information was however being given by the CEO of the Thames Water Board who has just paid (not earned) herself, £3 million for a year’s attendance in this role. Then I find out that the combined wages of the UK Water Authorities Board Members is in excess of £120 million per annum! This is an obscene amount, especially as these people calmly accept losses of 40% of our available water supply through leakage. Surely, a better use could be found for a substantial amount of these wages, such as the improvement of dams, water delivery and better sewage control. These come easily to mind.

My favourite sectors of energy and commodities have taken quite a caning over the last few months (even the wonderful TB Guinness). Fortunately, perhaps some of you will remember that I halved my holdings shortly after the start of the collapse, therefore reducing the pain. I still believe in these sectors, especially where the fund is invested into new energy and commodities for future technologies.

Many of these funds have a large percentage of their holdings in American Companies and therefore the relative value of Sterling to the Dollar becomes important. For the last few months the raising of American interest rates lowered the value of Sterling against the dollar. This reduced the fall in sterling terms for these funds, otherwise it would have been greater. I intend to cling onto my existing holdings in these funds until a clearer picture emerges.

What comes next is the question? Will the “Kraken”, now awakened, continue its rampage or return peacefully to its home in the sea. Hopefully, it will be the latter. Certainly, the last couple of weeks have shown some stability in the sterling/dollar relationship, resulting in some growth in the UK Mid-Cap funds. This should not be surprising as the FTSE 250 fell 17%, considerably more than the 3% of the FTSE 100 during the recent market collapse.

Last week’s Saltydog numbers and graphs showed some nice upward movement, sufficiently to encourage us to make small investments into the Schroder UK Mid-250 and Franklin UK Mid-Cap funds. If the recent improvement in the markets turns out to have substance, and is not a “dead cat bounce”, then it will certainly be time to increase the size of these investments.

In my case it will also include an increase in my TB Guinness holding, and some pondering over the other commodity funds that I hold. Last week’s numbers also indicated an upward movement in the technology funds, another sector to watch.

Being invested over recent months has certainly been a cause of worry and concern, be you in the markets and suffering the fall, or in cash and worrying about missing the eventual upturn. This reminds me of a true story of two American investors (sorry I cannot remember the names), but one was older and more sage, the other younger and more aggressive.

When the rich list was published the younger one always tried to be higher in the list than the older, and eventually it happened. He then crowed to the older, “I have more money than you”. To which the older replied “I have something you will never have.” The younger said “what is that?”, and the older said “I have enough”.

This is something I remind myself of when under stress.

Best wishes and good luck with your investments.

Douglas.


Founder & Chairman

saltydoginvestor