This month, I stopped sitting on my hands, jolted into action by an email from a reader wondering why, since I had deemed some shares good long-term investments, I had not added them to the Share Sleuth portfolio. He wanted to know whether I believed share prices would fall again – whether I was waiting to pounce on bargains.
If you believe quality will out, read on. I've investigated three high-quality shares that should survive and ultimately prosper for you this month. While all these companies promise to be good investments for patient investors, perhaps XP Power is the most compelling at current share prices.
When I was reaching for a pithy way to sum up the latest month in the life of the Share Sleuth portfolio, the phrase “There’s nothing like a crisis” came to mind, but none of the endings that followed really fitted. I was thinking of “to focus the mind”, but it didn’t hit the mark so I typed the first half of the phrase into Google. The search returned a quote from Dexter Morgan, a fictional anti-hero. It was perfect.
Appraising shares today for the long term requires a certain detachment from the present. It’s easier to be detached, of course, if a company has the security of a large cash surplus and supplies something we still need despite the restrictions of the pandemic, like Anpario. Next, one of Britain’s best-run retailers, though, is pitted against an intractable problem: few of us are shopping for clothes.
Earlier today, I found my wallet in a drawer. The contents: a fiver, an old receipt, an English Heritage membership, and a card with ink-stamps from Waterstones’ cafe nearly entitling me to a free cup of coffee, seemed like relics from a bygone era. It’s been weeks since I used any of these things.
Deciding on the long-term prospects of businesses is a daunting prospect when so much about the short term is uncertain. But a pandemic is just one of numerous ill-defined but serious threats we hope will not happen “on our watch”. Over the course of an investing lifetime, though, some of them inevitably do.
This month, I’ve made two trades. The first was perhaps the easiest I have ever made; and the second – well, it should have been easy but a virus intervened.
This piece was written before the coronavirus severely impacted markets and new restrictions came into force.
A stock market sell-off probably triggered by high valuations and the global spread of Covid-19 is bad news for flighty investors who already own shares, but good news, perhaps, for those who would like to. Almost across the board, shares have got cheaper, if you believe they will survive the short term and prosper in the long term.
This piece was written in early February, before the coronavirus severely impacted markets.
There has been something of a melt-up in the valuations of the 30 shares I score and rank using my Decision Engine spreadsheet. Because prices have gone up, the engine is producing fewer and fewer recommendations.
Owing to high valuations across the board and because, despite frantic efforts, I have dug up no new companies to invest in, there were only two high-scoring additions to the Share Sleuth portfolio open to me this month, both existing members that are underrepresented (See Share Watch for an explanation of how I score shares). They were Victrex, which accounted for just 2.2% of the portfolio, and Anpario, which is a slightly smaller holding.