02Jul
What´s hot………..
…….and what´s definitely not!
As unlikely as it may seem we are now more than half way through 2019 which gives me the opportunity to look at how the year is shaping up in terms of trends, investments, scandals and opportunities. This week has seen another ludicrously over-priced tech flotation as the madness of perceived value versus actual value continues. I love Slack as a business application but valuing a company that loses more than $1m a year at $27bn seems more than a tad extravagant. Those who the gods seek to destroy they first make mad.
What´s Hot
Tech unicorn flotations – though they shouldn´t be and in 24 months time we will look back in horror at Uber, Lyft, Slack and others and wonder what the hell we were thinking!
Artificial Intelligence – an industry and buzzword that few investors really understand but at which many are throwing money. Unhappily the money won´t return to the sender very often
Commercial Peer2Peer Lending – well-researched, credible, asset-rich businesses continue to return brilliant yields to savvy investors
UK Buy2Let – is making a comeback as investors realise that the tax burden isn´t prohibitive and there is value in the market due to depressed sales
Marijuana – yeah man, it´s still smoking hot if you pick the right investment vehicle. Sorry, couldn´t help myself. Slightly high on the thought of the stock we picked last year returning x20 to our investors by 2023
What´s Not
Individual Peer2Peer Lending Platforms – from Funding Circle to Zopa default rates are on the increase. Trusting a business that makes money from the number of loans it approves to reject borderline credit risks is the definition of optimism.
Lendy – one of the least credible of the Peer2Peer platforms…….now in receivership and likely to result in a 40% loss for all the optimists referenced above
Cryptocurrency – no longer the darling of the speculative investor. But ironically finally likely to start to achieve its potential thanks to Zuckerburg´s Libra.
Forex trading – too many losses and too much correlation due to Brexit. Always risky. Now insanely so.
The Financial Conduct Authority – missed Lendy, missing other unviable investments despite us warning them, published toothless reports exonerating themselves into the utter scandals of RBS´s GRG and Lloyds-HBOS Reading and continues to be the least effective and most self-satisfied regulator in history.
Investment Rules to live by:
If it looks too good to be true – then it probably is and you shouldn´t do it. Make them explain exactly how it is possible
If it pays more than 18% per annum – it is off the scale risky. That doesn´t mean it´s bad but it does mean you need to be realistic
If your gut feeling is negative – don´t do it. Listening to your guts may sometimes cost you profits but it won´t ever cost you capital.
If they ask you to introduce others – don´t introduce yourself. No good investment needs recommendation before return
If they are based in a destination such as……Argentina, Malta, Latvia, Lithuania, Montenegro or Indonesia, then book a flight there, have a great holiday but don´t give them your money. Why would you?
As always, we are here to give you both barrels of our honest opinion on any investment that you like the look of. No charge. And no compromise!
Have a successful second half of 2019………..