Tickets, Passport, Wallet…Mask?
My Dad always had a three-stage process for leaving the house…’tickets, passport, wallet’ he’d say while patting his pockets and standing in the hall looking around with a vacant expression. Sound familiar?. What he was actually checking I now know was that he had his car keys, some money and his briefcase ready for work but the holiday mantra stuck for years and is now a fond childhood memory of mine.
Maybe the latter-day version of this is Smartphone, Charger, Mask!
Just as a few old-fashioned things become staples of modern life to remind us of where we’ve all come from it seems that masks are here to stay and we’d probably better get used to it. For me, I can’t help wondering how glasses wearers like myself can stop their lenses steaming up…practise I imagine!
Over the last few weeks, I have been reading up on the so-called ‘K’ shaped recovery. The simple concept is that as there has been a huge economic shock and life has changed, perhaps irrevocably for some businesses, any recovery is perhaps going to be (K) shaped by winners and losers…hence after the downturn (the down part of the K), winners might be the new businesses’ stocks such as BooHoo, The Hut Group and Pharma companies – these being the upturn of the K, whereas the losers might be the traditional stocks of M&S (recently fallen out of the FTSE 100), Thomas Cook and Easy Jet as the free world attempts to make a correction. These stocks for the down part of the K.
I’m no soothsayer and don’t pretend to guess markets. In these times though I find it useful to hear what the wise old sage, Warren Buffet might say, remembering of course that in 2008 his company Berkshire Hathaway lost its AAA rating and he personally lost a fortune.
He is though still a good yardstick methinks.
Buffet has a few ‘golden rules’ of investing; here are a few to whet your appetite:
Rule #1 Never lose money
Rule #2 Never forget rule #1
If a business does well, the stock performance will follow
It’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price
Our favourite stock holding is forever
What can we learn from this conjecture? Well, as we always say about our role here at TWP ‘we are not stock pickers’. We have forged relationships with a few trusted advisers with whom we work closely to establish a safe and predictable return for any investment our clients might make. We would always advocate time in the market and not timing the market. History tells us it’s a wise thing to do. By coming out, and selling up, all one does is crystallise the loss…not a good idea.
TWP always talk long term; Buffet talks forever…I like that synergy.
Buffet also talks about buying a wonderful company at a fair price, not the other way around. That is where we at TWP are keen to deploy the experts who can assess those ‘wonderful companies’ and provide a rounded approach to investments via investments that make sense to you and spread any risk.
If you are worried about the slow or U, W or K shaped recovery and its impact on your investments, the best place to start is by referring back to your financial plan…that roadmap will tell you if you’re on track or not. Be less concerned about how your next-door neighbours garden looks; check your own first and be happy.
If you want to talk please give us a call…we are all ears and want to help dispel any myths and help you make sense of a complex world.
Happy Autumn.
Mark Shotton
Managing Director
Don’t forget the fish – August 2020