CryptoPlankton wrote:absolutezero wrote:We're in danger of getting into the blinkered HYP mentality of "do nothing" here.
You may be, I don't run a HYP. But what I do try to do is generally hold investments for the long-term, and avoid overtrading and trying to second guess how the future will pan out.
absolutezero wrote:The concrete signs are already there if you want to see them.
It seems almost certain that energy prices are going to be in the £4,000 a year area later this year.
That means there is a high likelihood of large numbers of customers being unable (not unwilling) to pay bills.
That will likely lead to State intervention.
That will affect the companies and therefore the share price.
In extremis, this could involve nationalisation
"seems", "likelihood", "likely", "in extremis" and "could" aren't concrete enough for me.
absolutezero wrote:It takes two sides to make a market after all.
Well, there are buyers and sellers, but also those that chose to avoid giving the brokers and taxman any more than they feel is necessary by being neither until they see a really compelling reason.
absolutezero wrote:Your doing nothing (holding) is just as much a prediction as my doing something (selling).
Funny, I thought I was just doing nothing!
absolutezero wrote:Would you have held on if it looked like Corbyn was going to win the election?
I can't say, but it would certainly have made me think about my position.
I didn't mean to try to discredit your thinking, which may well prove to be prescient. It's just my view that it's a little early to be writing off the utilities and giving up on investments that continue to deliver a satisfactory performance.
An interesting discussion! Thanks for the detailed response.
Raises a few thought processes in my head.
1. If "
seems", "
likelihood", "
likely", "
in extremis" and "
could" aren't concrete enough for you then what is and what are you doing investing your money in the market in the first place?
There's nothing concrete in this game.
Investing is a risk/probability gig.
If you want certainties you would leave it in a savings account (where you are certain to lose the lot to inflation over time).
2. Doing nothing
*is* doing something. There is no such thing as "doing nothing".
You have assessed the risk (I hope - or not assessed the risk - whichever one is appropriate) and decided to hold on.
Whether you realise it or not, that is a decision.
3. You are
"trying to second guess how the future will pan out" because you buy individual companies.
You buy them because you think they will do well - or else you wouldn't buy them.
If you weren't trying to second guess the market, then the logical thing to do would be to buy a global tracker and let the market do its thing rather than taking punts on individual companies.
4. You say the utilities are 'satisfactory'.
Why settle for satisfactory when an S&P 500 or global tracker knocks the utes into a cocked hat?
5. Those who invested in Carillion, RBS and Lloyds feature heavily in "
those that chose to avoid giving the brokers and taxman any more than they feel is necessary".
When was 'too early' to consider pulling the trigger on CLLN? The day after it collapsed - despite the warning signs being there?
There is minimising costs and then there is minimising the size of your portfolio!