Articles By John Smith

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Stock Market Angst

James Bartholomew writes an occasional article in the Saturday issue of the Daily Telegraph under the heading "Diary of a Private Investor". On October 25th, he wrote "It is frightening to see large chunks of one’s wealth disappear overnight. I have lost, regained and re-lost sums of money that are, to me, very substantial". Overall, it is a very angry article. Angry with himself, angry with the Government and, as it happens, angry with BBC presenters. The tenet is that people who have lost a lot of money often need to sell anything to raise cash to survive and so perpetuate the already dire position of perfectly good shares

In the summer of this year I was writing about holding a portfolio of "value" shares for their yield and awaiting the good times to roll again. The only manner in which I am not quite as angry as James is attributable to a conscious decision to liquidate those share that had performed well (done in September 2007) and store the cash. But I am angry too since the shares of really good companies that I retained have been hit for no good sound economic reasons. I am slightly placated by not needing to sell any of them, and I do not intend to

But the damage is palpable (as it must be with my personal pension fund that I refuse to look at). Overall my portfolio is down 58% with the largest casualties being Taylor Wimpey -89%, Sterling Energy -86% and Yell Group -57%. No wait, my holding in Black Rock Latin American Investment Trust is down 62% and before all this lot started it was up 20%.

The point about this article is that James and I are not alone. If reasonably sophisticated investors like we are can be so wrong, what about the less informed folk out there?
 

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