Random Thoughts: Where the hell do you disappear to?

Yes yes I know at times I disappear for a day or two or even three from updating this blog, it has been busy a period, then again it always is, in a given week we have to:

  • Update clients – takes half a day per client
  • Company Visit – takes half a day per company
  • Every morning – Check news pertaining to the industry/companies that we are tracking and maybe a new idea comes up without us realising it (hence why I like to do the “Stocks in the news” )
  • Every week – Review new potential investment ideas with the team grilling our analysts for each and every point. – take’s 1/3 a day (why so long? hey you’re investing people’s $ you better work hard and not make stupid mistakes)
  • Every week – I get grilled for my investment ideas by the team (which can take anywhere between 1 day to 1 week to fully be presentable, again why so long? see above)
  • Every 2 weeks – Get grilled by the Investment Committee
  • Every morning – Review the portfolio holdings for all clients
  • Every week – Try to catch up with someone non-investment related – why? It’s interesting just to see what else is going on in the world.
  • Every morning – Review the watchlist of potential holdings, existing holdings, see if there are opportunities because of price action – An example this past week, I sent my colleague to attend a company visit with analysts from several brokerage houses to find out information to answer 3 key questions we had and if the answers were positive to each and every one and that we had to be on standby to execute a buy order before the rest of the market got wind to the news. Which it did, 10 mins before market close @ lunch each answer was incredibly positive, we executed our investment decision, and after lunch the stock moved some +6%. But before we can get to such a position, we have to screen, find the idea, analyse an industry, a company, prepare a 40 slide presentation, get it approved by an investment committee and then be in this position to invest on behalf of clients.
  • Internal meetings – Big organisations love this shit
  • Spare time? What spare time? I read constantly.

Amongst many other things, so yes at times I may disappear for a period of time, but I still enjoy this writing, its help me formulate my thoughts and in the end I do understand the theories, research or news around investment far better.

Hope you all still enjoy reading :)

Pigs and Credit

Wonderful monthly letter by Pimco’s Bill Gross talking about the relationship of credit and asset prices with his pig example. Essentially he’s expecting headwinds for the stock markets with the removal of liquidity and thus credit by the Fed for the coming year.

Asset prices are dependent on credit expansion or in some cases credit contraction, and as credit goes, so go the markets, one might legitimately say, and I do most emphatically say that!

P/Es of 3 or P/Es of 15 or P/Es of 0 are intimately connected to the amount of available credit. So are interest rates. If there was only one dollar to lend and someone was desperate to have it, the interest rate would be usurious. If there was one trillion dollars of credit and no one was eager to borrow for some reason or another, then the rate would be .01% like it is today and for the past five years in my personal money market account.

Source: Pimco