Update for Copiers and Followers
APRIL REVIEW & LOOK AHEAD
Another month done and dusted. I’m quite happy with the progress being made this year.
Currently at +23.5% after 4 months and the focus on UK/EU businesses that were heavily impacted by Covid and their expected recovery this year as the vaccine programs and other control measures show their effectiveness is starting to show rewards.
The month was quite mixed in terms of how businesses have progressed. There were a few outstanding moves like Card Factory +20.81%, Investec +32.53%, SIG +29.05% and TUI AG +16.28%, but then there was a big sell off in the Bus/Coach sector and we saw Firstgroup fall -19.23%, followed by Stagecoach -10.86% and Go-Ahead -10.93%.
So there was some Gain/Loss offsetting, but I think the Bus/Coach sector will bounce back in May as public transport starts to pickup further as travel freedoms extend and they can help lead another green month hopefully.
In our mini-portfolio of French stocks there was some improvement but I think the plan for getting France out of lockdown was met with frustration that it moved slowly and still did not provide comprehensive support to industries that are struggling. It was good to see Elior Group pop above 7 for a while and it ended the month +8.48%. Some of the property investments also started to improve with Klepierre +11.19% and Gecina +3.69%. They should really be able to improve later this month when non-essential businesses start to reopen and optimism that France has turned the corner shows through.
The crypto sector was very volatile. Bitcoin had a red month (-3.7%) but was strong until mid-month before correcting 27% and then bouncing back just a fast. Even with our small allocation to crypto, this shows through on the daily swings in equity but it is just one of those aspects of a nascent industry and we should expect more in future. I did take a profit on Ethereum before the correction and used that profit to diversify the exposure to include Cardano and XRP, plus re-entering on Ethereum. All of those positions are in profit and I think there is more upside to come.
Elsewhere the action was quite subdued. US Bond yields did fall a little during April and that helped push our Bond and Dividend Stock ETF holdings a little higher. Gold also had a better month and even though we’re still down on the Gold Miners ETF, GDX, but it did manage to have a positive month with a +5.72% gain. I was ready to add to that position if Gold had kept selling off but the fall in Bond yields helped support a bounce.
LOOKING AHEAD
I’m doing my best to keep the potential for a +50% year in focus, to make amends for my over-cautious approach last year and we’re on track for that at the moment with the progress being made by all the epicenter stocks that still have big upside gains to target in terms of their pre-Covid share prices.
During May we have more easing of measures in the UK plus France and some other EU countries starting to make changes now their case numbers have started falling. A new bout of optimism will also come when the terrible situation in India is stabilised and hopefully that happens in the next couple of weeks now that international support appears to be helping in the fight.
We can hopefully notch up a 7th profitable month in row but I’m still not looking to take much in the way of profits yet. Many of the epicenter stocks still have 30%-60% gains to make in order to get close to pre-pandemic price levels and while not every business will achieve it, we need to give much more time for this to play out properly.
I know being patient is not exciting but if I can hit a 50%+ year for us all this year with a nice low risk approach I’m going to be very happy with the outcome and I don’t like taking big risks with other people’s money.
The main reason I would take any profit in May is if something else catches my eye. You might have noticed I took a position in TAN, the Solar Powered ETF, during March and I took that because price had corrected 30% from the 52-week high. There are a few other’s that I’m tracking such as KWEB, the Chinese Internet Services ETF, as they are getting close to a 30% correction and I’m interested in some of these ‘growth’ investments now they are coming off the boil.
Thanks for your time.
