Holly's Blog: Ted Hastings joins me to guest edit this week's blog
30 April, 2021
Enough is enough! Voters rebel this week as we finally take the political hump about things that really matter. What is wrong with our Magnolia walls and ‘nightmare’ soft furnishings.
Brutus brought down Caesar. Watergate brought down Nixon. Will John Lewis bring down BorisJohnson?
“Jesus, Mary and Joseph and the wee donkey, can we just move this thing along before it drives us all round the bloody bend?”
OK OK sorry!! Moving on to money news . . .
Big tech stocks have had a mostly sparkling week, announcing their first quarter results
Tesla was the runt of the reporting litter this week and shares fell by 4% on the results. Competition is growing, they can’t get their hands on enough computer chips and they made a lot of their Q1 profits from trading bitcoin. Hmmm.
”Beginning to feel a wee bit like the ginger stepchild.”
Apple however had a better time – revenues were up 54% for the first quarter. Facebook revenues were up 48%. Google’s parent revenues shot up 34% . And Amazon’s net income tripled.
“Mother of God!”
Twitter posted growth although analysts were mildly disappointed that they ‘only’ have 199 million “average monetizable daily active users” busily sharing memes and vitriol. These tech stock growth metrics do not reeeeally feel sustainable or repeatable. Like many, my finger is just hovering over my Nasdaq 100 ETF on the trading app. Should I press sell, Ted?
“I didn’t float up the Lagan in a bubble”
OK Ted, so you’re not a technology fan. What are the alternatives?
Anyone who has worked in the investment industry knows that fund managers, warm in the glow of hindsight, love the chart which shows that the best performing asset class of 1066 was the worst performing asset class of 1067. In other words, by the time that little old retail us have cottoned on to what’s going up, and vaulted on to the bandwagon, it is marginally too late.
But I think it’s still timely to observe the strong recent performance of 2020’s unloved value sector.
Industry pundits are pointing to the return to favour of value stocks. These shares tend to be in sectors like finance, energy and travel. Hammered last year. Marginally boring companies which make well-established things and it’s all about cash in the door today, rather than potential cash in tomorrow.
Looked at another way, if stocks are like men, then growth stocks are the 18 year old Jocks. Whilst about 1 in 10 may turn out to be good long-term bets and translate those crazy ideas into cold hard cash, the majority won’t. They will be flash, brash and become less attractive over time.
The value stocks are the sort of men you may want to marry when you’re 40+. They might occasionally combine grey socks and sandals. Have a wee bit of a pot belly. But they are good at putting shelves up, won’t go nuts and will do what they say.
Was that helpful Ted?
“Go back to the coal face… unless you’ve got more egg-sucking tips for your granny.”
There’s a fuller article (https://emailboringmoney.co.uk/t/4QZH-HVKH-DEQJU-ENL9Q-1/c.aspx) on our site for anyone interested in the shift from growth to value. The Schroder Global Recovery, Jupiter Global Value and R&M Global Recovery teams are having a moment, and may be worth an investigation from anyone who thinks that all these tech valuations are for those who floated up the Lagan in a bubble.
Have a great long weekend everyone. Ted’s taking me to the pub.
“Got you a big pint of that cat’s p*** that you young fellas seem to like so much”.
Over and out. With apologies to those strange readers who have not (yet?) succumbed to the delights of AC-12.
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