Since my interest in the financial markets started in around 2013, I have been bombarded with lectures on ‘the only way to make money investing is….’ mainly from time served investors and with the occasional guru thrown in, who came into the market two weeks ago. All opinions are the opposite from each other, some promoting fundamental analysis, some swearing by technicals, a lot promoting some dodgy gold miner in the deepest depths of Indonesia and some saying just buy amazon. I believe all are right, but right for them, not for me and probably not for you. It’s best to build experiences and find where you fit.
I do not believe I am one of these experienced Investors by far, and have just a basic understanding of the economy. I did poorly at school, as you are probably able to pick up reading my blogs but I write to help me more than anything.
In my learning journey in the financial markets, which is still in it’s infancy, I have tried and tested different markets to see where I best fit, from forex, to commodities, from investing in small caps, to trading the big players. I have, at times mostly lost money, but more valuable to me is, I extracted that one little gem that I implemented in my strategy today.
I was watching a rerun of ‘Homes Under The Hammer’ this week, the presenter asked a property investor what his main profession was ‘I’m a sports better’ the investor replied, the presenter pulled a face and replied ‘sounds a bit risky to me’, Who are you, with your unqualified opinion to judge how someone makes their money, especially when that person is stood in front of you buying his seventh property! Sports betting is probably not for me, I don’t think it would suit my personality or risk levels but for this individual he found something he enjoys, makes money on and no one should tell him he’s wrong.
I was mainly prompted to talk about this area when I heard of highly respected, time served investors having a discussion this week, regarding how to invest. Apparently you can’t be a long term investor and a short term trader at the same time. YOU can be anything you want to be and as long as you put the work in, understand the market you’re in, understand the risks and beat the chosen metric you have decided to measure yourself against, whether this is the FTSE, the S&P or the interest you get in your savings account.
Don’t get me wrong, there’s a lot of highly respected investors out there who, without them I wouldn’t be making money today, but choose wisely. On the property side I can’t recommend Rob & Rob from The Property Hub enough and my investing knowledge would be nothing without Paul Scott, from stockopedia, The contributors to the Investors Chronicle and stateside Meet Kevin and the Popular investor from youtube, are all but to name a few, i’ll do a review on my favourites at a later date. Ever so oftan i come across someone, who seems very intelligent but swears that his way is the only way because he’s survived several bear markets and you’re stupid for doing anything else. anyway end of rant, lets review the week.
This week I added to my BOOHOO position, BOO now represents 20% of my portfolio with an average price of 230p. A little bit more exposed than I originally wanted to be, but I understand the company and the risks. I am happy to increase my position and monitor the situation closely. I still believe that the current supply chain problems are transitory (word of the moment), and will get back to some normality in the near term albeit some say this could take at least two years. I am seeing the Baltic dry index and container shipping rates coming down slowly with ship numbers queuing at ports reducing, the US is back open (for now) and oil prices are leveling off. All good for BOO who are expanding to the US.
The downtrend on the stock price is following the whole sector with ASOS and BOO falling in tandem. I think BOO can navigate this better than some companies such as AO who have lost nearly 80% of their share price since January. Their bulky products requiring two people to deliver and massive import costs, the majority of BOOHOO products are small and light and sent through the Royal Mails solid delivery network. As I work with the Royal Mail I can see BOOHOO products quickly processed.
The problem mainly is getting the products into the country from the manufactures worldwide, but BOO seems confident it has this covered, charting a jet to bring in its products and maintaining strong relationships with its importers to help reduce costs.
Christmas parties are now in full swing and many planning holidays for next summer, people are excitingly buying boohoo products. I think the christmas update will be encouraging but much emphasis will be put on analysing the gross margins and how much extra we have had to folk out on the extra shipping costs, i believe the supply chain is transitory so it doesn’t matter as i’m in BOO for the long run, and the reason, the future is bright, with the recent acquisitions including Debenhams it shows how the company is diverging its customer base and moving into new areas and new countries such as the US and Middle East, all positives for growth. The work Boohoo is doing on the Environmental and Social, Governance (ESG) front is positive and eventually will become a pillar of the ESG movement, becoming a stronger company because of it.
Another great company I added to this week was VOLEX (VLX) now 16% of my portfolio at an average price of 340p. The company recently put an update out stating the supply chain was issue but did not change their outlook.
“Having delivered a robust performance in the first half of the year, coupled with a strong forward order book, the board remains confident in delivering on full-year consensus market expectations, absent any material disruptions to our business from the extended lead times that are impacting global supply chains,” the company said..
Traders and investors were spooked at the comments surrounding these short term issues and not seeing the bigger picture. Revenue is growing at 44.5% at 292.7m, showing strong customer demand for their products. Based on analysts offering 12 month price targets for Volex plc. The average price target is 532.50p with a high forecast of 565.00p and a low forecast of 500.00p. The world is going electric, there’s no ifs or buts, with this comes the need for cables, from charging electric vehicles to building more wind farms and data centers and Volex cables are highly regarded through the industry with customers such as Tesla.
Another boost came this week as Boris revealed plans for all new homes built within the united kingdom to include EV chargers. With petrol and diesel engines still planned to be banned in 2030 I better get pricing up a new tesla.
The excellent management team is still pursuing more mergers and acquisitions that add an immense value to the growing business and the confidence shows with management buying in, with Nat Rothschild (CEO) owning nearly 25% of the company with a recent top up in october.
I’m more than happy to participate in this Black Friday Sale of volex shares and will buy the dip until VLX represents 20% of my portfolio.
I’m conscious of the technicals with Volex, the share took three attempts to break 400p in 20 years with the most recent break this year, everytime the share looks to be breaking free it collapses, but the world has never been so focused on the change to renewable energy as it is now and the management team is much stronger than anytime in the past.
On the daily chart we’ve had a double top and the share price has just slipped below the 200 day moving average, so I can see some more slipping to the downside before another breakthrough of 400p, then onwards and upwards.
