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In the aftermath of the financial crisis of 2007-08 Soros provided explanations for the housing crash. But more than that, he pointed out that the housing problem was but a part of a much larger and more broadly based super-bubble that started in the early 1980s. The lessons learned in that period may help us understand what is going on now, and what is to come.
Housing bubble The US housing bubble followed the course described by Soros in his boom/bust model (see last week's newsletters). Lax lending standards were supported by a prevailing misconception that the value of the collateral for the loans was not affected by the willingness to lend. Loans were packaged up into financial securities and sold on to unsuspecting investors around the world. Those securitised bonds issued in the early stages of the boom showed a low default rate on the underlying mortgages. Credit rating agencies based their estimates of future default rates on the recent benign past – another misconception. As house prices rose the rating agencies became even more relaxed as they rated collateralised debt obligation (CDOs) – instruments that repackage securitised bonds. In trying to perceive future risks and returns all participants failed to recognize the impact that they, themselves, made. While Wall Street was creating all these weird and obscure financial instruments – and getting fat fees for arranging them - mortgage originators became increasingly aggressive in encouraging ordinary people to take on the responsibilities of a mortgage. The value of a loan as a proportion of the value of a house got higher and higher. Towards the end of the boom people who had no job and nothing to put down as a deposit on a house were being granted mortgages. The attraction of fee income lies at the heart of this. The mortgage arrangers received a fee for arranging the mortgage regardless of what happened to the house owner thereafter; the banks received fees for arranging securitised bonds, and yet more fees for CDOs, and yet more fees for even more complex instruments. But, all of this was okay, if you believed that the value of homes and thus collateral for the loans, was growing and would continue to grow. This belief, for a while, created its own fulfilment: faith in the housing market led to more loans; the additional demand for housing stimulated by the availability of cheap mortgages led to house prices rising, providing more collateral; confidence in the housing market rose due to the additional collateral; more loans were forthcoming; and so on. People became dependent on double-digit house price rises to finance their lifestyles. As they withdrew housing ‘equity’ through remortgages the savings rate dropped below zero. When home owners became over extended and house prices stopped rising they had to cut back on remortgaging. There was a reduction in demand from both people moving and from people staying put and remortgaging The moment of truth came in the spring of 2007 when New Century Financial Corp. went into bankruptcy. People started to ask questions: Perhaps the value of the collateral for mortgages was not destined to rise forever and was artificially supported by the willingness of lenders to make fresh loans? If they stopped perhaps much of the ‘value’ in houses would prove to be an illusion? A twilight period followed when house prices were falling but participants continued to play the game – new mortgages were signed and securitisations created. In August 2007 there was a significant acceleration in downward price movements. Over the next year contagion spread from one segment of financial markets to another, until Lehman’s collapse sparked a further downward lunge. The super-bubble The super-bubble also reached its tipping point in 2007-08. This reflexive process evolved over a period of a quarter of a century. The main prevailing trend was ………………To read more subscribe to my premium newsletter Deep Value Shares – click here http://newsletters.advfn.com/deepvalueshares/subscribe-1
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The first two case studies (Conglomerate and REITs bubbles) are examples of the use of equity leverage – see last week’s newsletters). The international banking crisis, on the other hand, was caused by debt leverage. This case study is particularly useful today because we currently have the sight of massive fiscal and monetary stimuli creating an atmosphere of economic confidence. This will lead to increasing confidence among bankers to lend, egged on my central bankers and governments. This bank lending is likely to affect the fundamentals (business and household collateral, economic growth, etc.) in a reflexive (two-way feedback) manner (mostly domestically rather than across borders this time). We need to recognise the point in the bubble/deflation sequence we are at any one time and take either advantage or evasive action.
© Image copyright mprinkeThe story starts with the oil shock of 1973, following which the main international banks experienced large inflows of deposits from oil producing countries. They lent this money to oil-importing countries – petrodollar recycling. In judging the size of loan to grant (and interest rate to charge) lenders estimate the borrower’s ability to pay. Many people view the valuation of collateral as independent of the act of lending. This may be a false assumption in many cases – it is possible that the act of lending increases the collateral value. The sovereign borrowers did not always pledge collateral in the normal sense, e.g. a charge over property, so the international banks had to take a broader view of ‘collateral’. They relied on debt ratios to judge creditworthiness. Typical ratios included:
Thus the collateral ratios and the lending were reflexive. This reflexive interaction led Soros to postulate that there would be a slowly accelerating credit expansion followed by credit contraction. East European countries borrowed, expecting to repay from the products produced by the factories built with the money, South American countries expected to repay their loans from the export of commodities. For the first few years international lending was very profitable and banks took an eager and accommodating attitude, asking few questions of borrowers. Often the banks did not know how much a borrowing country had borrowed from other banks before they lent to it (modern examples of this lax attitude: Credit Suisse lending to Greensill entities and Archegos which borrowed from many banks). Soros noted that there are large personal incentives for bankers to participate in bubbles even if they suspected that a bubble was being blown up. If the banker refuses to lend in what seems like profitable business (at ………………To read more subscribe to my premium newsletter Deep Value Shares – click here http://newsletters.advfn.com/deepvalueshares/subscribe-1 George Soros case study of a far-from equilibrium market: Real Estate Investment Trusts (REITs)23/4/2021 REITS, also called mortgage trusts, were subject to special tax provision in America: if they distributed more than 95% of their income, they can do so free of income tax. This was largely unexploited until 1969 when they really started to take off. Recognising the boom/bust potential, in February 1970 Soros published a research report in which he said that the conventional method of security analysis should not apply to REITs:
‘The true attraction of mortgage trusts lies in their ability to generate capital gains for their shareholders by selling additional shares at a premium over book value. If a trust with a book value of $10 and a 12 per cent return on equity doubles its equity by selling additional shares at $20, the book value jumps to $13.33 and per share earnings go from $1.20 to $1.60.’ (‘The case for mortgage trusts’ research report, written by George Soros, February 1970) Say there are 10 million shares to start: Book value Dollar return Per-share earnings Originally (10 million shares) $100m $12m $12m/10m = $1.20 New shares (5 million shares sold at $20 each) $100m $12m Totals following new share issue $200m $24m $24m/15m = $1.60 Book value per share $200m/15m = $13.33 Why would investors be willing to pay above book value for new shares? Because of the high yield and the anticipation of per-share earnings growth. The more the premium goes up the easier it gets for the trust to fulfil this expectation. The whole process is a self-reinforcing one. Once it is started, the trust can keep showing growth in eps despite distributing 95% of all its earnings as dividends. Those investors who buy into the process early enough gain the benefits of a high return on equity, a rising book value, and a rising premium over book value. It was pointless trying to predict future earnings and (through discounting these) work out a price investors are willing to pay - the conventional approach - because the price investors are willing to pay also determines the future course of earnings. It is important to recognise the self-reinforcing nature of the process. Investors can only try to predict the future course of the entirely initially self-reinforcing but eventually self-defeating process. He sketched out four stages to the drama that was to unfold over the forthcoming three years or more: Act One In 1970 there was pent-up demand for housing and new houses found ready buyers. Because of a shortage of funds going into housing companies and REITs, those that do get funding will achieve high returns. Also, suppliers (builders, labour and materials) are reliable and available in this slack time. Investors are starting to recognise the mortgage trust concept, permitting the creation of many more and the rapid expansion of existing ones. Thus the self-reinforcing process begins. Act Two A housing boom begins and bank credit is available at advantageous rates. Mortgage trusts take on higher leverage. The premium of mortgage trusts’ share price over book value increases as investors anticipate high returns in………………To read more subscribe to my premium newsletter Deep Value Shares – click here http://newsletters.advfn.com/deepvalueshares/subscribe-1 The conglomerate boom of the 1960s was the first time Soros systematically put into practice his theory. Managements of high technology defence companies feared a slowdown in sales after the Vietnam War, e.g., Textron, LTV and Teledyne. They used their highly priced shares to buy other companies. By purchasing companies on relatively low price-earnings ratios (PERs) in exchange for shares in themselves (which had high PERs) they pushed up their earnings per share, eps.
Managers quickly learnt that there are two ways of pushing up eps and thus the share price, allowing them to raise more capital. The first was to become more efficient and raise organic earnings from existing businesses. The second was to regularly buy companies on low PERs with highly priced shares. The second method became quick and easy if they could rely on their investors continuing to price their shares at a high multiple. For this they needed to convince their investors that the acquired companies would be transformed to faster growing businesses and thus the combined earnings produced should be accorded a high PER based on last year’s eps. Investors were on the look-out for growing eps but were unable to tell whether the reported numbers were growing because of greater efficiency at acquired subsidiaries or simply because a continuous flow of low PER-company purchases. A simple example of boot-strapping (the magic of pulling yourself up by your own bootstraps) Imagine two firms, Crafty plc and Sloth plc. Both earned £1m last year and had the same number of shares. Earnings per share on an historical basis are therefore identical. The difference between the two companies is the stock market’s perception of earnings growth. Because Crafty is judged to be a dynamic go-ahead sort of firm with management determined to improve earnings per share by large percentages in future years it is valued at a high PER of 20. Sloth, on the other hand, is not seen by investors as a fast-moving firm. It is considered to be rather sleepy. The market multiplies last year’s earnings per share by only a factor of 10 to determine the share price Crafty Sloth Current earnings £1m £1m Number of shares 10m 10m Earnings per share 10p 10p Price to earnings ratio 20 10 Share price £2 £1Because Crafty’s shares sell at a price exactly double that of Sloth’s it would be possible for Crafty to exchange one of its shares for two of Sloth’s. (This is based on the assumption that there is no bid premium, but the argument that follows works just as well even if a reasonable bid premium is paid.) Crafty’s share capital rises by 50 per cent, from 10 million shares to 15 million shares. However, eps are one-third higher. If the stock market still puts a high PER on Crafty’s earnings, perhaps because investors believe that Crafty will liven up Sloth and produce high eps growth because of their more dynamic management, then the market capitalisation of Crafty increases and Crafty’s shareholders are satisfied. Each old shareholder in Crafty has experienced an increase in earnings per share and a share price rise of 33 per cent. Also, previously Sloth’s shareholders owned £10m of shares in Sloth; now they own £13.33m of shares. Crafty after the takeover Earnings £2m Number of shares 15m Earnings per share 13.33p Price to earnings ratio 20 Share price 267pThis all seems rational and good, but shareholders are basing their valuations on the assumption that managers will deliver on their promise of higher earnings growth through operational efficiencies, etc. Managers created special accounting techniques that enhanced the impact of the acquisitions - accounting rules were lax (in many ways they still are). Thus was created an ‘underlying trend’: earnings per share were rising. Voices initially sceptical………………To read more subscribe to my premium newsletter Deep Value Shares – click here http://newsletters.advfn.com/deepvalueshares/subscribe-1 We may be seeing bubbles blowing up in some equity markets right now. Others may follow. We need to be able to read the signs of both the blow-up and any potential crash. George Soros’s reflexivity model can help.
Soros sees bubbles as consisting of two components: (i) a trend based on reality (ii) a misconception or misinterpretation of that trend Usually financial markets correct misconceptions, but, occasionally misconceptions can lead to the inflation of a bubble. This happens when the misconception reinforces the prevailing trend. Then a two-way feedback might occur in which the prevailing trend, now puffed up by the initial misconception, then reinforces the misconception. Then the gap between reality and the market’s interpretation of reality can grow and grow. In maintaining the growth in the gap, the participants’ bias needs a short circuit so that it can continue to affect the fundamentals. This is usually provided by some form of leveraged debt or equity. At some point the size of the gap becomes so large that it is unsustainable. The misconception is recognised for what it is, and participants become disillusioned. The trend is reversed. As asset prices fall the value of collateral that supported much of the loans for the purchases melts away, causing margin calls and distress selling. Eventually, there is an overshoot in the other direction. The boom/bust sequence is asymmetrical. It slowly inflates and accelerates, followed by a more rapid reversal. The stages of a number of examples drawn from history are described in later newsletters. Soros says that there are eight stages to the boom/bust sequence. We will take the example where the underlying trend is earnings per share (‘the prevailing trend’) and the participants’ perceptions (cognitive function) are reflected in share prices through the manipulative function, i.e. they buy or sell shares pushing the prices up or down. In turn, the change in share prices may affect both the participants’ bias and the underlying trend. Thus, share prices are determined by two factors: (a) the underlying trend – eps (b) the prevailing bias Both (a) and (b) are influenced by share prices, hence a feedback loop. In the figure below the divergence between the two curves is an indication of the underlying bias. (Soros said that the true relationship is more complex than we are representing here because the earnings curve includes, as well as the underlying trend, the influence of share prices on that trend. Thus the prevailing bias is expressed only partially by the divergence between the two curves – it is also partially already reflected in those curves.) The boom/bust model Stage 1 – no trend recognition The underlying trend is gently sloping upwards, but is not yet recognised Stage 2 – recognising the trend and reinforcement The trend is recognised by market participants. This changes………………To read more subscribe to my premium newsletter Deep Value Shares – click here http://newsletters.advfn.com/deepvalueshares/subscribe-1 To understand George Soros’s trading triumphs you need to develop a deep understanding of reflexivity. I attempt in this newsletter to explain it:
The Enlightenment view of the world is that reality lays there, passively waiting to be discovered. Reason acts as a searchlight to illuminate that reality. Thus, there is a separation between, on the one hand, people’s thoughts and understanding of the world and, on the other, the object. The thinking agents cannot influence the underlying reality. Thus, in natural science we can explain and predict the course of events with reasonable certainty. Economic and other social areas of ‘study’ - Soros does not permit the use of the word ‘science’ with social disciplines – tried to imitate Newtonian physics and develop ‘laws’ to describe the fundamental processes. To make their models work in a ‘scientific’ manner economists would simplify reality by making assumptions, for example, that market participants base their decisions on perfect knowledge, or that supply and demand curves could be taken as independently given (with supply not influencing demand, and demand not influencing supply, except through the classical interaction on the economist’s diagram). For the physical scientists it is obvious that to gain knowledge there must be a separation between thoughts and their objective. The facts must be independent of the statements made about them. So, the Earth will move around the Sun in a fairly predictable pattern regardless of what the observer thinks about the movement. Many economists follow a sequence of logic analogous to the physics model in trying to describe economic outcomes, thus: FUNDAMENTALS leads to UNDERSTANDING/KNOWLEDGE leads to MARKET PRICES leads to EQUILIBRIUM When we move away from the physical sciences we frequently encounter a problem. In social phenomena it is often difficult to separate fact from thoughts. The decision maker in trying to make sense of the world attempts to be a detached observer but can never fully overcome the fact that he/she is part of the situation they seek to comprehend. For example, people and human organisations, such as lending institutions, try to understand the underlying facts about the housing market, but in doing so – and in taking action – they influence the reality of the house supply, demand and prices. Under the classical economics paradigm demand and supply curves are supposed to determine the market price. But, it seems reasonable to suggest, that in many cases these curves are themselves subject to market influences, in which case prices cease to be uniquely determined. We end up with fluctuating prices rather than equilibrium. Another example: It is thought that the markets are on the look-out for a recession looming over the horizon, that they anticipate it. Soros takes a different viewpoint believing that it is more correct to say that markets help to precipitate recessions; that
Similarly, the reaction of markets to the IPO of Coinbase last week, a Cryptocurrency market facilitator, has reinforced the views of many millions of speculators in Bitcoin, Etherium, etc., that there is something of value underneath the hype. The belief, the misperceptions, the Emperor’s fine clothes, etc., lead to real economic resources devoted to the emptiness, e.g., the mining of Bitcoin uses as much electricity each day as The Netherlands. These biased markets are precipitating the diversion of resources that could otherwise be used to produce real goods and services into game of pass the parcel at ever higher prices when there is nothing in the parcel of cryptocurrencies. Soros’ paradigm So, the widely held paradigm that financial markets tend toward equilibrium is both false and misleading. Soros contends that, first, financial markets never ………………To read more subscribe to my premium newsletter Deep Value Shares – click here http://newsletters.advfn.com/deepvalueshares/subscribe-1 George Soros's ideas are enlightening for today's investors in a time when we may well experience in the next few months moving from near-equilibrium to far-from-equilibrium in some industries, companies, economies and markets. This newsletter looks at the period when Soros was fine-tuning his ideas and putting them into practice, not least in betting against the pound and thereby making $1bn profit.
At 26 Soros arrived on Wall Street. He started in international arbitrage, buying securities in one country and selling them in another. There was much American interest in European securities following the formation of the European Common Market and Soros was engaged in trading these as well as acting as security analyst and salesman. Soros had a five-year plan. He would work hard on Wall Street, save $500,000, and then return to the UK to pursue his philosophical studies. He was put to work trading European gold and oil shares. This business was given a terrific boost when the Suez crisis dislocated the movement of oil, causing oil stocks to become very active. He was able to use his London connections to obtain shares that could be offered to Americans. He worked incredibly hard, unable to miss a day’s trading. He developed relationships with some of the leading finance houses and he became increasingly confident, as he made deals with the likes of Morgan Stanley and Warburg. He was well ahead of his five-year plan. By the end of 1959 he had married (to Annalise Witschak) and, feeling restless at Mayer, decided to move to a much larger and richer firm, Wertheim & Co. At that time European company accounts were opaque, much more so than for US companies. Soros had to estimate true value rather like a detective piecing together scraps of information, such as tax returns. His language skills (speaking good German, French, English as well as Hungarian) permitted him to interview senior managers and gain superior knowledge relative to other European security analysts in New York. He was a path-breaker, being the first to discover a number of companies that went on to great success including Dresdner Bank, Allianz and a some pharmaceutical companies. One of the strengths he discovered in himself was a capacity for self-criticism. He admits that he has made as many mistakes as any investor, but his self-critical posture allowed him to discover them quicker than most and to correct them before too much damage was caused. Soros became a bold, even arrogant, person at work, but he remained shy of telling people about his passion for philosophy – he would regularly work evenings and weekends at his philosophical ideas, trying to connect his view of fallibility with historical developments. Losing European trade and a hedge fund Following a disagreement with a superior, Soros left Wertheim to join Arnhold & S. Bleichroeder in 1963. He was hired as a broker and asset manager, focused on global research and trading. Unfortunately, that year President Kennedy introduced a tax which effectively imposed a 15 per cent surcharge on the purchase of foreign securities abroad. Suddenly, Soros’ main activity ground to a halt. For a while he was occupied with selling European securities back to the Europeans, but found himself with less and less to do. Fortunately, his job was secure, so he switched his attention to philosophy, which he regarded as his main project for three years. In 1966 he refocused on business. He wanted to learn about US securities so he set up a model account with $100,000 of the firm’s money. He divided the money into 16 parts. Each part was invested in a company’s shares he thought promising. He wrote short memos explaining his reasons for purchase and followed up with monthly reports reviewing the portfolio and discussing developments. He was trying to get a handle on growth rates, risk and return, and how to maximize portfolio returns. Not only was he developing a new business, but also teach himself how to invest. He was forced to emerge from his philosophy-writing vacuum and come into contact with the investment community. When he tested his investment ideas on a few investors he got a good response. From the model account emerged a small investment fund called First Eagle Fund in 1967, with Soros serving as manager. The fund, established as a mutual fund, had $3m in capital. This was followed by the Double Eagle Fund in 1969 ($4m of capital). Set up as a hedge fund, this allowed Soros more latitude in investment strategies and tools (e.g. selling short, use of leverage). It was the Double Eagle Fund that allowed Soros to bridge his philosophical musings with investment practice. Here, h……………To read more subscribe to my premium newsletter Deep Value Shares – click here http://newsletters.advfn.com/deepvalueshares/subscribe-1 I think some markets are moving into phases that can be usefully described by George Soros’s models of how societies and markets function. It will be helpful to me, and I hope to you, to be reminded how markets can move from being in “near-to-equilibrium” to a state of “far-from-disequilibrium”. It will become increasingly important as share markets inflate to watch out for the warning signs of bubble creation and when bubbles might be about to pop. Forewarned is forearmed.
George Soros is most famous for being fabulously wealthy, but what he’d rather be known for is his philosophical ideas about society, in particular economics and the workings of markets. For many of us his ideas are indeed the most important contribution he has made – although his philanthropy is very impressive too, and his tens of billions. These concepts are not easy to absorb so I’ll have to set them out in a series of newsletters over the next few days – much of the material is taken from a book I wrote a decade ago called The Great Investors (still in print in a number of languages). Before establishing a private family investment house George Soros made a fortune for himself and the backers of the Quantum Fund. For instance, he achieved an annual rate of return of nearly 35 per cent over the first 26 years of the fund. A $1,000 investment in 1969 grew to be worth millions by the mid-1990s. There is much we can learn from Soros:
His observations and anticipations of financial market movements are but a sub-set of manifestations of his theory of ‘reflexivity’. The same philosophical base can be used to describe and analyse, for example, the movement of a society from an open, rule-of-law, democratic form to one increasingly closed and authoritarian. It can also be used to describe and explain individual human interactions such as love and hate, among a host of other applications. He has written a number of books to try to convey the essence of his idea of reflexivity – in which a two-way feedback loop, between the participant’s views and the actual state of affairs exists. His amazing life experiences have taught him that individuals do not base their decisions on the actual situation that confronts them. Rather, decisions are………………To read more subscribe to my premium newsletter Deep Value Shares – click here http://newsletters.advfn.com/deepvalueshares/subscribe-1 When Covid first struck I took a cautious approach, turning many of my investments into cash. Then the massive fiscal, monetary and, later, the vaccine stimuli came to the fore and I turned buyer. Here is a list of all the shares I’ve bought and written about on ADVFN in the Covid period. I’ve been fortunate.
Company Purchase date Purchase price Divs to 31.3.21 Price 31.3.21 Return to 31.3.212021 Connect (Smiths News)18.3.20 £0.151 zero £0.365 142% Character 5.6.20 £2.52 5p £4.50 81% McCarthy & Stone 1.10.20 £0.718 0 Sold 7.12.20 £1.185 65% Cap|Co 6.11.20 £1.032 0 £1.714 66% Dewhurst “A” 11.11.20 £5.94 9.25p £7.00 19% MS International 16.12.20 £1.292 1.75p £1.60 25% Wynnstay 29.12.20 £3.405 zero £4.80 41% Lloyds Bank 12.3.21 £0.4169 zero £0.427 2% J Smart 18.3.21 & 24.3.21 £1.253 zero £1.22 -3%Longer run performance Almost eight years ago that I left a tenured professorship to concentrate on investment. Back then the FTSE 100 was around 6,600. It is now 6,900 – a slow rise but there have been dividends of around 3-4% per year. I believe the numbers in the tables below show that I have outperformed, which is quite a relief given the salary and security sacrifice I made almost eight years ago. The tables show the results (so far) of all the shares bought for the portfolios I’ve been writing about in my Newsletters. The comments I made at the time explaining the rationale for each investment are available for you to read in older newsletters - there is nowhere for me to hide from my appraisals I made three, four or seven years ago – all the errors of omission and commission are there in broad daylight. I present the returns after taking the hit on broker costs, stamp duty and bid/offer spread. (Some of you have joined us recently so, in case you are not familiar with them, I briefly describe the criteria for my portfolios following the portfolio performance tables.) The 2013 Net Current Asset Value, NCAV, portfolio Company Purchase date Purchase price Divs to 31.3.21 Price 31.3.21 Return to 31.3.21 French Con.25.7.13 £0.3047 zero Sold July15 £0.4378 44% Caledonian T 25.7.13 £0.70 zero Sold April20 £1.391 99% Fletcher King 6.8.13 £0.30 14.25p Sold June16 46p 101% Northamber 22.8.13 £0.287 1.6p Sold Oct16 £0.303 11% Titon 5.9.13 £0.379 6.5p Sold May16 £1.06 197% Mallett 12.11.13 £0.7682 12.7p Sold Nov14 £0.60 -5% AVERAGE 75%The 2014 NCAV portfolio Company Purchase date Purchase price Divs to 31.3.21 Price 31.3.21 Return to 31.3.21 Holders Tech 10.10.14 & 3.11.14 £0.47 1p Sold Mar17 £0.33 -28% Airea 4.11.14 £0.1195 0.9p Sold Sept16 £0.309 166% Northamber 17.11.14 £0.4265 0.7p Sold Oct16 £0.303 -27% Caledonian T 30.12.14 £1.39 zero Sold April20 £1.391 0 AVERAGE 28%The 2015 NCAV portfolio Company Purchase date Purchase price Divs to 31.3.21 Price 31.3.21 Return to 31.3.21 PV Crystalox 15.1.15 £0.122 zero Sold Dec16 £0.237 94% Arden Partners 1.9.15 £0.422 1p Sold May18 £0.364 -11% Northamber 4.9.15 £0.443 0.4p Sold Dec16 £0.303 -31% AVERAGE 17%The Buffett-style portfolio This type of share is rarer than the others, and so I combine all years. Company Purchase date Purchase price Divs to 31.3.21 Price 31.3.21 Return to 31.3.21 Dewhurst 9.4.14 £3.18 70.5p Sold Feb20 £7.217 149% MS International 9.10.19 £1.723 5.25p £1.60 -4% Character 20.1.20 & 5.6.20 £2.811 13p £4.50 65% Dewhurst 11.11.20 £5.94 9.25p £7.00 19% MS International 16.12.20 £1.292 1.75p £1.60 25% AVERAGE 51%(I bought some more of Dewhurst in June 2014 at £3.11, December 2014 at £3.75, November 2017 at £5.46, February 2019 at £5.54 and April 2019 at £5.64.These were sold Feb 2020). Modified price earnings ratio portfolio 2015/16 Company Purchase date Purchase price Divs to 31.3.21 Price 31.3.21 Return to 31.3.21 Haynes 11.2.15 £1.159 33.5p Sold 2.10.19 £2.9175 181% AGA 11.3.15 £1.002 zero Taken over June 2015 £1.456 45% Hogg Robinson 10.4.15 £0.4709 2.37p Sold June 2016 £0.656 44% MS International 3.7.15 £1.86 37.75p £1.70 12% BHP Billiton 24.9.15 £10.43 127p Sold May 2018 £16.90 74% TClarke 5.11.15 £0.7916 13.61p Sold Feb 2020 £1.1215 59% Premier Farnell 8.4.16 £1.222 3.6p Taken over 20.6.16 £1.632 36% AVERAGE 64%The AGA holding was doubled 30 April 2015 at a price of £0.9466. Modified price earnings ratio portfolio 2017 CompanyPurchase.................To read more subscribe to my premium newsletter Deep Value Shares – click here http://newsletters.advfn.com/deepvalueshares/subscribe-1 |
Glen ArnoldI'm a full-time investor running my portfolio. I invest other people's money into the same shares I hold under the Managed Portfolio Service at Henry Spain. Each of my client's individual accounts is invested in roughly the same proportions as my "Model Portfolio" for which we charge 1.2% + VAT per year. If you would like to join us contact [email protected] investing is about making the right decisions, not many decisions.
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