investing etc. 0016

The short edition: Flexible working, Lululemon, Marks Electrical, Solid State, Selling Goodwin, DAZE 1V, Our Robot Overlords

Welcome to investing etc. 0016, the short edition. I’ll keep this brief!

I’m in a work-life crisis, the kind where you have too much of both. As usual crises force us to face up to flaws in the way we have arranged our affairs.

I originally thought of investing etc. as a way to do two things:

1. Tell readers when I had published an article, as I gradually withdrew from Twitter (still happening. I am in a week long experimental detox)

2. Write more broadly.

I intended the newsletter to be irregular. In practice I have published on a semi-regular two or three week cycle, coinciding with the publication of my articles. 

The requirement to come up with original writing according to a schedule is inflexible. It’s called work, also known as a rod for my own back when time is short!

Until next time I change things 😉, I plan to send links to my articles and a little context (goal 1) once a month on a regular schedule.

Occasionally I may send something special (goal 2). 

That feels more flexible, and flexibility is everything to a freelancer.

Two weeks in the life of an investor

So, here we go. Links to my articles. Unless you are a new subscriber (we’re up to 362 now), you already know I score shares and use those scores to run a model portfolio. 

5 Strikes

The first step is to decide which shares to score. I invented a system for that too. 

With 5 Strikes I can rapidly evaluate whether a share is worth investigating further. Recently I pointed 5 Strikes at Lululemon, the “athleisure” brand. I love the clothes, maybe I will love the share. The market doesn’t! 

Decision Engine

Once committed, I score the shares and rank them in the Decision Engine, a spreadsheet that tells me how many of each to own. 

Since you last heard from me, I have re-scored online retailer Marks Electrical. We bought our washing machine from Marks Electrical and if our fridge breaks down we will get one from there too. I find it harder to commit to buying the shares though.

Solid State, also re-scored, has been very good to me and the Share Sleuth model portfolio over the years. I still rate it highly. The company distributes electronic components and assembles electro-mechanical subsystems and products for equipment manufacturers. 

A massive order delivered in the recently concluded financial year means revenue and profit ballooned, which could distort our view of the business and its investment credentials. This is why I use averages to evaluate performance and the share price. 

Share Sleuth portfolio

The Decision Engine’s recommendations power the Share Sleuth portfolio (as well as my own). All year it has been telling me to sell, sell, sell, some of my favourite shares. 

Generally they’re still good businesses but the prices have soared and the logic of the spreadsheet dictates that the holdings are too big. At least some of the money would be better invested in good businesses less favoured by traders.

This month I could ignore the Decision Engine no longer, and halved the portfolio’s holding in engineer Goodwin. It felt like halving the number of arms I have.

Thanks for reading

Here’s a gratuitous picture of our Robot Overlord at the Sidgwick Campus, Cambridge University:

Daze IV by Antony Gormley

The next scheduled investing etc. should be with you on September 7. Frankly, it is unlikely that anything special will be heading your way before then 😔.