Oh Show me the way to the next Whiskey Bar, Oh dont ask why….


Those of you who live as I do in South East Asia will know that September is usually the most stormy month weather wise and indeed historically the markets have also known to be somewhat volatile. Although we saw a bit more movement at the start of the month, it was fairly benign by its usual standards. Thats not to say it wasn’t without incident, as I will allude to later.

Raw data was…
                                                                  Sep                   Qtr                 YTD
FTSE                                                        +2.3%               +4.9%            +10.5%
Dow Jones                                               -0.6%                +2.0%             +4.0%
Nasdaq                                                     +1.6%               +9.4%            +4.9%
Dax                                                           -0.2%               +7.5%             -2.2%
Nikkei                                                        -2.8%                +4.9%            -15.1%
Shanghai                                                   -2.0%               +2.5%            -13.6%

Currencies against the USD:

GBP                                                               -2.2%              -2.2%            -12.0%    
EUR                                                               +0.4%             +0.9%            +3.5%
JPY                                                               +2.6%              +1.2%          +18.8%
CNY                                                               +0.5%              +0.1%          

AUD                                                              +1.4%               +2.2%           +5.3%

Those of you who are regular readers know I tend to stay away from Financials. Some of the managers I use will have exposure to this sector but as a rule I am not a fan simply because I do not understand their balance sheets.

The sector has recently once again been dragged through the mud, Deutsche Bank and Wells Fargo are two big names in the industry, both have been in trouble for their  behaviour. Its worth noting that the Deutsche case relates to business pre the financial crisis, another indication of this murky world given we are coming up to the eighth anniversary, why have things taken so long for the company to be taken to task?

Wells Fargo’s behaviour was summed up by Brad Sherman at the Senate Committee hearing when he told their CEO “You fired 5,300 people, you took 5,300 good Americans and turned them into felons with a system that you created, benefited from and drove your stock price up by bragging about your levels of new accounts.” Without going into detail, I am sure you get the picture.

Investments in Deutsche Bank and Wells Fargo would have lost you 47% and 19% respectively YTD.

Technology and Consumer Discretionary are sectors that I do like. Coincidently the fine which has been levied on Deutsche Bank is roughly the same as that which was done so on Apple, (USD14bn vs EUR13bn) for their tax issues. The impact on the share prices were stark, Deutsche on the verge of collapse, bailouts, Apple barely moved. Not least perhaps because Apple as a company is over 30 times larger than Deutsche Bank. 

Amazon is another great share to own, if you missed my recent postings on this, the below link elaborates.


With Consumer Discretionary, Diageo is a favourite. A share that I will buy today , tomorrow, next week , next year…..it benefits from an upsurge in middle class with its brands desirable by those who can afford it. India is by far the largest whiskey drinking country in the world and once they can afford Johnnie Walker, they will drink it…proof in pudding share price up 19% this year and a nice dividend to boot, bit of a contrast to our bankers….

Of course I am over simplifying here, you cannot have all your investments in one or two sectors / stocks. Asset allocation is the key to any successful portfolios and it is striking that balance which differntiates the successful portfolios from the less so. Right now the less of those assets allocated to banks the better in my humble opinion.

There wont be a morning youtube update today, as stats are covered here and I am travelling but anything you need please get in touch …….

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