See all the previous BBB Monthly Recaps here.
Feb Performance: -0.6%, FTSE benchmark -0.8%
YTD Performance: +0.5%, FTSE benchmark -1.2%
(Part Time) Fund Manager’s Report
Exiting Feb with a meagre -0.6% loss seemed like a miracle, given all the turmoil that happened over the month. It was a relief to know that I did not slip on any major banana skins; two of which were narrowly avoided. System1 (LON:SYS1) was sold in January on tech valuation fears, but always with a view to buy back later on; A -37% drop from a profit warning was avoided. Mccoll's Retail (LON:MCLS) has been on the watchlist, and I was almost lured in at the bargain value at 6p. But my hesitancy saved me from a calamitous 60% drop on the last day of Feb on insolvency fears.
There were a few new additions to the portfolio (see section below for details), as I took advantage of price weakness to pick up shares that had triggered my buy prices. In total, I had 28 buy alerts in the month of Feb, a new record. It certainly feels a bit like the market has capitulated; but whether this is a just a pause before another leg down, or the darkest point in the night, we will find out soon. As I deployed more capital, my ISA cash holdings went from 53% at end-Jan to 41% at end-Feb, and my SIPP went from 20% to 0% (although technically not fully invested, as two of my largest SIPP holdings are not long equity positions).
And it is my two largest SIPP holdings, £SGLN and £XSPS that has rescued a respectable performance this month vs benchmark. While my ISA lost -4.1%, similar to the -4.6% for the AIM-100, my SIPP managed to increase by +1.1% driven by my short S&P500 bet along with my Gold ETF. I’m glad I did not choose to unwind these bets at the end of 2021. I still think the S&P500 has further to fall, as earnings start to be downgraded due to margin pressures from inflation. Financial market turmoil will soon follow, with political unrests and riots all but certain in emerging markets later this year. Newly hungry and destitute people become angry.
With such a gloomy macro prediction, should I even be long equities? Why not just sell everything and let XSPS and…
