Time for a fresh chance to do the things you know make sense
And aren’t January sales great?
Who doesn’t think buying goods on sale makes sense?
If you like your purchase, you have money left over
And if you change your mind, you can sell on Vinted and not lose too much
BUT
If you get no discount and change your mind
Then you take a hit
Like investing
If you paid full price for Diageo at £40 when it was 28x forward earnings in December 2021 because it’s, “a great business”
And then did nothing..
You’ve lost 38% of your money, including dividends!
Even worse – now that “dry January” is “dry all year” for many
maybe it’s still not “on-sale” at 16x forward earnings today
After the hit
But if you’d bought Natwest on “January sales” back in 2022, when some were saying Banks are “bad businesses”
You’re up 94%
And at 7x forward earnings today, that’s a BIG discount to Diageo…
And maybe AI will help banks more than liquor companies grow earnings…
So where are today’s “January sales”?
Not large-cap US equities with the likes of Apple / Walmart at over 30x forward earnings
Europe, emerging markets, and Asia look like “bargains” to us
But no-one wants to invest there!
Yes, that’s why they’re “on sale”
Remember no one wanted Natwest 3 years ago and everyone wanted Diageo
Look how that turned out… you pay a price for buying what’s popular
So if you think it makes sense to look for a deal when buying: a house, car, holiday, clothes,
why aren’t you applying that to investing?
“Because Value hasn’t been the winning strategy for the past 15 years…”
ahh
But most of those 15 years were during QE when inflation & interest rates were close to zero
When times were tough for banks
And buying dividend payers like Diageo made relative sense
And a few large tech companies grew fast for an unusually long time
But nothing lasts forever
And at 5% bond yields, those days are over
So don’t take too long to do the “sensible thing” this January
“Markdowns” of today’s popular items can happen quickly
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Disclosure
Ranmore Global Equity Fund has no position in any of the securities mentioned
This is not advice, do your own work
The content of this marketing material is provided for information purposes only. It does not constitute or form part of any offer to issue or sell, or any solicitation of any offer to subscribe or purchase, shares, units of other interests in investments referred to herein. Past performance does not predict future returns. Capital is at risk. Ranmore Global Equity Fund plc has not been registered under any United States securities laws and may not be directly or indirectly offered or sold in the USA or any of its territories or possessions or areas subject to its jurisdiction or to or for the benefit of a US Person.
Don’t you love January?
D