Going to Cash

The portfolio finished the week up 0.95% on the week and 62.89% on the year.

XPP continued to perform well up 16.7% on the week and sits at about 10% of the portfolio.  Any significant pull back from these levels and I will certainly increase my position size.

The portfolio was helped along by ACSO up 7.87%, SOM up 4.91% and IQE up 4.89%.  The only real lagard was TET which was off 3.70%.

I have been listening to Howard Marks – The Most Important Thing and Nicholas Nassim Taleb – Fooled by Randomness, while driving or at the gym (much better for making the time pass that techno music!). Both of these have prompted me to put a little caution into my portfolio and I liquidated a small part of BOO, FEVR and BVXP on Friday afternoon.  This brings cash up to being my largest holding at 16.6% of my portfolio. This may just be a case of fixating on the latest piece of information but I think few would argue that the market might be getting ahead of itself. Of course the market (as someone more clever than me said) can stay irrational for a very long time, so it is a question whether I have liquidated to early or whether I should continue to liquidate further tranches of the portfolio.

It was a hard decision to sell even a small part of these holdings but as they represent nearly 50% of the portfolio selling part of these was the only option.

As for the future my inclination is to push this percentage up to 25%. That said I have fresh funds to deploy in the form of my wife’s SIPP, which is currently half in cash and is slowly being deployed with a strong valuation bias (with the exception of BVXP).

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AIR

AIR: Actually only sold 16% of my holding on Friday because the other transaction that I placed was in my ISA and was on a limit order for one day which was not fulfilled.  So happy failure.  Now I have to decide whether to sell into today’s strength. Am inclined to do so.

I can see no reason, as always, for the move in the price so it is likely to be down 15% tomorrow.

AIR

I have today 19/08/2016 reduced my holding in AIR from 10.3% of portfolio to 5% of portfolio.

Thanks to Imran Khan (Twitter Handle @immikhan) I now remember why I bought this stock. It is one of Lord John Lee’s core holdings and at the time that was good enough for me.  It was good value and did run up nicely to 600p+ but since then has declined as low as 260p . Recovering now to as high as 438p but again has steadily declined to 370p at the time of writing.

My puchases have been

Date Shares Price Cost
10/10/2012 1080 275.00  £  2,970.00
16/10/2012 341 287.86  £     981.60
08/11/2013 353 560.00  £  1,976.80
14/05/2014 388 509.00  £  1,974.92
29/01/2015 721 274.00  £  1,975.54
30/01/2015 650 304.00  £  1,976.00
08/09/2015 1127 440.00  £  4,958.80
25/01/2016 538 367.15  £  1,975.27
 £18,788.93

The share price is annoyingly irrational up 7% one day and down 7% the next for no reason.  So to reduce the impact on the portfolio I have decided to reduce my exposure to 5% of portfolio and may well look to exit if price strengthens from here to anything above 600p unless it looks like the stock is going to be permanently re-rated.

The proceeds will be re-deployed to cash and possibly another purchase or top up.