Portfolio Fund Investment Strategies
Monday Musings 06/04/2021
There was a fascinating read in the Sunday Times this week about the flop of the Deliveroo listing where the share price fell by over 30% on day one. The folks who have been caught by the fall are the ordinary members of the public, including its customers, who bought £50 million worth of shares. If you read the article- I recommend that you do, it’s not technical, you will have your eyes opened to the way in which a small group can profit from the misfortune of others. I am not for a moment saying that the market in general works in this fashion, it does not. One of the good things that came out of the debacle was that a number of fund managers, the guys that run the funds I use for your pensions, ISAs etc, decided not to buy the shares. There were a number of reasons for this, not least because they were not happy with the way Deliveroo treat their workers, although the main reason was sheer logic in that the company has never made a profit in spite of enjoying mega growth due to Covid. Of course, the question must be what will happen after lockdown when people can go out to eat!! Some pundits think that the failure of this float may mean that we are seeing the end of the seemingly ridiculous valuations such as Cazoo which has only sold 20,000 cars being valued at $7billion.
The winners to last week’s competition are Brendon W, Diane K and Gary J. The answer was Deliveroo!
When I was with Hill Samuel, they used to say that you needed about £100,000 to be able to achieve a reasonable spread of risk if you bought equites, stocks and shares, directly. Although I think that number is a bit on the high side, there is no doubt that holding just one or two shares as your investment portfolio is a fairly high-risk strategy. In my view for the average investor a portfolio fund is a better strategy, whether you use an IFA or buy directly.
So, to the markets