investing etc. 0012

Furiosa edition: dystopian stock markets, dystopian weather, dystopian films. Also Garmin (❤), and Judges Scientific!

Welcome to investing etc. 0012, the dystopia edition. And a doubly hearty welcome to the 22 subscribers who have leaped aboard in the last 30 days.

I can’t remember the last time I felt this cold at the beginning of summer, and I don’t just mean the weather. I am also talking about the stock market.

Taking the temperature

But let’s talk about the weather first. I am a bit of a weather geek.

The air’s coming from Shetland, doing a handbrake turn over the North Sea and chilling us in our newly donned summer wardrobes before shoving off and spreading awfulness into Europe.

This is a screen recording of my favourite website in action. 

The only consolation is that my friend Sam, who lives in southern Germany, and taunts us with the temperature in his garden, has switched the heating on.

Cambridge is known for its high summer temperatures. Our Botanic Garden briefly held the UK record. We were there the day before it became the hottest place, drinking beer and listening to a band playing on its lawn.

Yesterday, when the temperature topped out at 12 degrees centigrade and I cycled to work in my favourite cafe in a gale, it felt like a completely different country.

Out of my comfort zone

Back to shares. I strayed into macro-economic territory on Friday, no doubt displaying my ignorance by suggesting reasons why the companies I follow closely in my Decision Engine, seem to be breaking with increasing frequency. 

The economic weather is stormy.

It’s led me to do something unprecedented. I re-scored a share, translator and localisation firm RWS, mid-term instead of waiting until it has published its next annual report.

While traders are cheering on a mini-recovery in UK shares, I am more trepidatious. My scores indicate that all but a handful of the shares in the Decision Engine are either priced for near-perfection or cheap, but perhaps for good reason.  

That puts me in a bind, because I do not like compromising on quality or price.

The only solution I know is to search harder for new ideas, which is the purpose of my 5 Strikes system. It uses the data in SharePad to find businesses that have been reliable earners in the past.

Most of the data in SharePad is financial, but I am sprinkling in non-financial data. I am particularly interested in statistics that tell us about corporate culture.

It started with B Impact Scores. These are given to companies seeking accreditation as B Corps, which means they operate in the interests of all stakeholders (see investing etc. 0004 and investing etc. 0005). 

Recently, I added data from the UK Customer Service Index (UKCSI). Next, I plan to ferret out the statistics many companies self-report, like Net Promoter Scores, staff attrition, and employee engagement.

Culture gives us confidence in the future, that companies will go on doing what they do well and invent better ways of doing things they are not doing so well.  

Shares that have performed reliably in the past that may be set fair for the future should make promising investment candidates.

All that re-scoring and searching for new ideas means I have only scored Next and Garmin since investing etc. 0011.

Furiosa

If this edition of investing etc. is apocalyptic, it might be because of what I have been doing in my spare time. No, I haven’t built a shelter in the back garden and we haven’t taken the government’s advice to hoard a three day supply of bottled water.

Furiosa: A Mad Max Saga

But I did go with my son to watch Furiosa, the latest Mad Max film. It was his first. I feel that I neglected his education by not taking him to see Fury Road when he was a teenager. I am off the hook for the first three, though, because they came out before he was born.

Furiosa is my favourite Mad Max film. I winced a lot, but then you are supposed to. These films are always going to be cartoonish, but some of the characters had a sliver of depth and there was even the hint of a relationship...

Anyway, since then I have watched one and a half more dystopian films. It might be affecting my mindset.

By the time you read this, the temperature should be back above 20 degrees 🤞, and everything will be peaches and cream again.

Spotted in a friend’s kitchen last week. Maybe the same could be said about investing.

Thanks for reading

If you would like to listen to something, may I suggest this Investing Matters interview with Jean Roche, a fund manager at Schroders. I like the way her team divides up their investment universe into “unique” shares, “flex” shares, and “avoid” shares. The affable Peter Higgins always gives his guests space to express themselves.

Please send questions and comments to richard@beddard.net or reply to this email.