Page 27 - DIY Investor Magazine February 2018

The Bad
Dialog Semiconductor were hit by a few warnings this year based on its relationship with Apple which accounts for 70% of its revenue, but apparently ready to bring semiconductor manufacturing in house (Dialog Semiconductor: A Reminder to Pay Attention). DLG’s share price took a few hits currently has me at a loss; I will await further clarification in Q1 of 2018.
I finally lost patience (and money) with Gattaca and Dunelm this year; in truth, had I formulated my current investing strategy before looking at these two, I wouldn’t have bought either - I held both of these too long in some feint hope they would recover. Lesson learned,
if you’re not convinced by a company, don’t hold just because you want to make your money back; get out, put the money elsewhere.
Next continues to cause some concern; I topped up
on a minor earnings upgrade, and remain convinced
of the quality of this business, however they continue to struggle against faster growing, online competitors. Will 2018 be the year they get their act together and start to catch up?
2018
What will the New Year hold? I’m not sure.
US equities sit on pretty lofty valuations, but worldwide equity returns have been very respectable.
In the UK, I think markets could at worst be considered ‘fairly valued’, and therefore remain happy to both hold my existing shares and make additional purchases wherever I find value. With only around 8% of my portfolio in cash, I remain keen to build up my reserves in case of a correction as well.
I try to follow macro events but don’t allow them to affect my investment decisions; however, it appears we may finally be seeing a program of interest rate rises globally which must surely put pressure on equities.
I’m keen to find a replacement to the emerging market Eastern European ETF in 2018; if you follow my CAPE posts, you’ll see that Eastern Europe still presents real opportunity from a value perspective.
I’m also intrigued by the possibility of India; I need to do far more research, but the attempts made to sort out their tax system last year should result in increased tax receipts to be spent on infrastructure.
If you had to bet on one country for the next 50 years, India must be a contender; maybe a small-cap ETF is the way to go.
I’m also keen to continue diversifying away from the UK, for no other reason than diversification is rarely a bad idea. I will be looking to screen for equities abroad, trying to find quality growth where I can.
And Finally...
I’m pretty happy with my investment methodology, it’s something that has been honed over a number of years and seems to be working; that being said, I continue
to develop and grow it based on new influences and education.
I was honoured to have been invited to contribute a Q&A interview to DIY Investor Magazine this year (you can read it here); when I had the idea to start this site, I had no idea where it would go, or whether anyone would even read it. It has been an education for me, and an inspiration to follow my interests and passions. I am excited to see what 2018 has in store.
Our little Twitter UK investing community isn’t so little anymore! It’s been fantastic to meet new contributors this year and I know they will make me a better investor in 2018. If you’re not yet involved,
join us - @britishinvestor
I wish you all a happy and prosperous 2018. Chriss
27 DIY Investor Magazine | Jan 2018