After a brief interlude of better performance & weather in July, things turned more mixed in August. Please see the table above for the full gory details. This seemed to be driven by a a fairly downbeat testimony from the US Federal Reserve Chairman, Jerome Powell, which dashed hopes of an early reversal of Fed tightening which the recent substantial rally had been built on.
Consequently the likely bear market rally came to an end even though it had recovered around half of the previous losses, leading some in the blue corner to declare a knockout for the bulls or that the bear market was over. Meanwhile in the red corner another Jeremy (dear old Jeremy Grantham) popped up to declare that even though some people were on the pitch, the super bubble was far from over in terms of deflating. Indeed as I alluded to last month he seems to think the recent rally fits the road map of previous rallies within unwinding of bubble conditions and a further leg down lies ahead as economic reality breaks in. You can read his full piece here.
Once again I present a fact sheet on the portfolio at the end of this post which details last months Top & Bottom 3 contributors, transactions, a breakdown of the Portfolio's Sector & Index exposures together with details of the Top 10 holdings.
There were fewer transactions in August as I gave the benefit of the doubt to two names where the Score was quite close to the sell threshold & the momentum based recommendation was not at sell. While a third name there was a trading update due which I decided to wait for. The one name that was sold, perhaps controversially, was Games Workshop (GAW) as the Score had fallen to 60 after they seemed to see downgrades despite better than expected results. The momentum based recommendation was also flagging a sell, so I followed the process in this instance, even though it seems like a decent quality Company which is well managed. So if you hold and you are comfortable with the outlook for them then I wouldn't put you off holding on for the long term.
Against that I added a higher scoring stock which topically makes equipment and systems for real warfare as opposed to little plastic bits for fantasy war games. This was BA systems (BA.) which Scored 90 at the time and has historically been a steady dividend growth stock. It now also sports a Pension fund surplus thanks to the recent rise in bond yields, which was something (pension deficit) which put me off the shares in the past.
Summary & Conclusion
So seemingly a return to bear market conditions as the recent bear market rally and decent summer weather was enjoyable while they lasted, but dare I say maybe they were both a bit too hot? It seems like we might be heading for the next leg down as we enter September and the dangerous month of October as Mark Twain was quoted as saying still lies ahead. So I'll leave it there as that is all a bit depressing, but don't get overly bearish, try and ride out the storm as best as you can in a way that works for you. Take care.
Just to note that the platform I use for the site / blog (Weebly) having been acquired by an e-commerce type Company (Square) is forcing me to move over to their interface by the end of September. As far as I understand it this is more of an e-commerce type framework designed for those selling products & services via the web.
Somewhat annoyingly it doesn't apparently include a Blogging section. Consequently at this stage I am unsure if the site will continue to appear in its current form and I may not be able to update it with post such as this. This will not affect current subscribers access to the Scores etc. as they are delivered separately. If any subscribers need to get in touch after the end of September should the site go down temporarily then please use the e-mail details you would have got when you signed up. Hopefully I will either work out how to use the new system or make alternative arrangements before then.