Fond farewell

After much investigating of various blogging platforms, I have decided to close down this account (well stop posting to it anyway). If you want to follow my blogging adventures regarding property then check out http://lodgeonwindermere.co.uk/blog/, if you want to follow my other interests then check out http://kevinpwalsh.co.uk

test post

This is a test post to see if twitter and fb integration work

No such luck

Thought that a game of golf would compensate for not being on the Lake District. Unfortunately, played rubbish so no such luck.

testing the connection

If you are reading this on facebook and/or twitter then the connection between my blog and those services works.

Spring Clean

Yes I realise we are in the teeth of an early Winter, but
the principle of a “spring clean” on investments holds good at any
time of the year. Several years ago I decided to take
control of my own private pension built up during my time in the
private sector. I opened a Self Invested Personal Pension
(SIPP) which enabled me to transfer my pension and to take control
of the investing. I also took the opportunity as I was
over 50 to extract 25% tax free and also to draw down a small
annual pension.

My investment strategy was based on picking blue chip companies who paid regular dividendsthat increased year on year. All this was done before the
financial meltdown and some of the companies paying the best
dividends included Royal Bank of Scotland and Lloyds TSB.
Of course we all know what happened and basically I got burned on
those investments along with Dixons Stores Group. Also,
the dividends went out of the window. Fortunately, I did
follow the principles of diversification and purchased shares in
such companies as Vodafone and British American Tobacco (the latter
is not very ethical but the share prices has increased 50% and it
pays a stonking dividend). The final principle in the
strategy was to buy and forget!

Well the economic recession should have put paid to the last principle but I
have to admit that I did buy and forget until recently. I
dismissed the forlorn hope that RBS and Lloyds would return to
their former glory in terms of share price and dividends and took
the plunge to sell. I reckoned that I could identify
other companies that will recover faster and are continuing to pay
dividends. Having sold my laggards, I needed to find some
alternatives.

I decided to try and maintain some semblance of diversification looking to replace shares sold with better performing ones from the same or similar sector, still focusing on dividend investing. Having sold the banking
shares I bought AVIVA, I sold BT shares and bought some more
Vodafone, I sold Dixons and bought Tesco. In addition I
bought Imperial Tobacco to go with BATS and Scottish and Southern
Energy as a utility to go with United Utilities.

So now I feel a whole lot better having taken control of my
pension again. I think I will abandon the buy and forget
strategy but avoid the trap of continually buying and selling
shares – the only people who win with that strategy are the dealers
and stock brokers. I will keep a watching brief on all
the shares in my pension, and hope I can spot any future RBS or
Lloyds debacles.

KPW

Polaris World

Looks like Polaris World are bankrupt. Failed business model fuelled by naïve customers looking for a quick buck. So glad I did not invest.

New way of blogging

Well, I have just downloaded the WordPress software for my trusty Blackberry Bold (WordPress develop the software for this and millions of other blogs). I must admit I am impressed!

So what has this to do with investing and making money. Well I guess it does on several levels. More and more I am using my Blackberry as an alternative to a PC. Certainly it is much easier to keep on top of e-mail. And e-mail is the most important application for me. I run the lodge rental (Fallbarrow Lodge) from my Blackberry. I estimate that the device has paid for itself many times over just because I had access to e-mail and was able to close bookings. I believe that RIM (the company behind BlackBerry) are spot on with their software platform. Many techno geeks miss this point preferring to focus on hardware and the latest I Phone.

This reduced reliance on the PC does not bode well for Mr Ballmer in Redmond. I realise that Microsoft have had a PDA platform for years but it is just a reduced version of Windows which don’t look good on a mobile smartphone. Heck, even HTC who make most of the windows smartphones hide the MS software behind their own user interface.

So if I was investing in technology stocks at the moment (which I am not) then it would RIM and not Microsoft which would get my money.

As ever DYOR

Long time no post

I realise that it has been a long time since I made a post to this BLOG. My only excuse was that I have been keeping my head down and trying to get through the “credit crunch” – whatever that means.

So how are things as of May 2009? Well my stock market investments are down (as are everybody elses), my property capital values are down (as are everybody elses). Well the property capital values are interesting, certainly my Buy To Let (BTL) properties are certainly worth less than 18 months ago. If I took the really pessimistic view, then some if not all are in negative equity (i.e. the value of the property is worth less than the mortgage outstanding). However, I bought into BTL as a long term thing so I am hopeful that over the next 5 years or so property prices will recover – not to their dizzy heights of a two years ago but enough to cover my mortgages. The real nice thing is the current interest rates. All of my BTLs are financed on interest only tracker mortgages. As the current base rate is .5% in the UK, I am currently generating £1,500 per month in rental profit. Now I am stuffing this away as fast as I can for the inevitable rainy day, but lets make hay whilst the sun shines.

The other nice little earner is of course our holiday property – a 3 bed log cabin on the shores of Lake Windermere (http://www.fallbarrowlodge.co.uk). The value of this is significantly higher than the amount I paid but even better is the rentals I am achieving. The log cabin is booked out from the end of June to the end of August at almost £1,000 per week.

So, the point at issue here is diversity of investments. Put all your eggs in one basket and you will most likely get burned. Spread your investments around and hopefully as one thing struggles, then others will prosper.

Regars

DYOR

Google, Mozilla and Canonical eating Ballmers lunch

I used to work for Microsoft. I was in sales and latterly consulting with the “Beast of Redmond” for 11 years based in the UK. I had a ball for most of the time, especially the first few years when we had to evangelise Windows and Office. When I started there were less than a 100 UK employees and when I left there were over 5,000.

I have no idea what the number of UK employees is now, but I am sure it is more. The thing that has stayed more or less constant though is the share price. Apart from the occasional foray into the $30 to $40 range, it has languished in the $20 to $30 range in the last 6 years since I left. I made a tidy sum form my MS shares, but not as much as I could if I had sold when they were trading at $60+ before the dot.com crash. But still that is life. Within MS there was almost a messianic belief that the shares would return to their former glory. So we all watched as they halved over the space of several months and did nothing.

Well, with the “retirement” of Bill, the task of sustaining the MS juggernaut has passed the Steve Ballmer. Steve is a great motivator of sales folks, but he just does not have the technical background of Bill. Bill is unique in being a very good (but ruthless) business man and also very clever technically.

Steve Ballmer is now facing the biggest threat to the core of the MS business success – the Windows/Office cash cow. And this threat comes from three organisations Google, Mozilla and Canonical. For the first time I am able to do all my computer stuff on a non MS suite of programmes. I use Ubuntu (sponsored by Canonical) for the operating system instead of Windows, Firefox (from Mozilla) as my internet browser and Google Docs instead of Office. The sum cost of all of this stuff is zero. Steve Ballmer just does not get this. He can not get his head around free software. To be honest neither can I, but it all works and works well. So while Steve bangs on about improving the customer experience (i.e. more features we don’t need to try and get us to upgrade) others are simplifying and delivering just enough.

The bottom line is that I am unlikely to buy any MS software ever again, and I am sure I am not alone in this belief. In my opinion, the share price will only go one way, and that is South.

As ever, DYOR

Crisis, what crisis

I have just spent a very enjoyable weekend in London visiting my daughter and partner. As well as being my daughter she is also my tenant as I own an apartment in Islington which they rent from me. The apartment seems to have done quite well as an investment, assuming I wanted to and in fact could sell at the moment.

However, what did strike me whilst down in London is that on the surface, it seems immune to the current “credit crunch”. There seem to be lots of properties with SOLD on the signs and lots of properties with “LET BY” as well. We went to the West End on the Saturday night to see a show (Joseph with Lee Mead – great show). The place was buzzing, the restaurants and bars were full, lots of people having a good time. The only down side seemed to be the large number of people sleeping rough. I have no idea if this is an increasing trend as this was our first visit to the West End.

So on the surface, London still seems to be the place to be. Contrast this with the rest of the country and we do really have a twin speed economy in the UK.

We bought the apartment 2 years ago, improved it some and it is in a great location. So when my daughter moves on, we shall hopefully sell at a reasonable profit. I would like to say we found the place after extensive research. The truth was that the market was moving so fast that anything good was selling in a less than a day. So that is what we did. I came down on the train, met my daughter and viewed about 4 properties and bought one that was yet to be advertised. All in one day. Not much research, but still I believe a great investment.

DYOR