On Tuesday I did something sensible.
I sold Legal and General, bought in April 2020. I made 43% and as the shares yield 6.5% that adds up to almost 50%. It was an opportunistic investment when the price was pummelled by negative sentiment in the early days of Covid. I got out because I don’t have any reason to be a long term holder of L & G and more importantly my plan is not to hold shares in individual companies. I re-invested in Personal Assets, an investment trust I want to have more of. It has gone up 10% in the last year and yields only 1.1% – hardly exciting. But about 30% of the fund is in US Treasury Bonds and Notes and 9% in gold bullion. This makes it a good store of value when the stock market plunges, as it does every ten years or so with such regularity one wonders why investors don’t learn.
My recent switch (a month ago) out of Marks and Spencer, booking a loss of 27%, into Babcock International is fraught with risk. M&S might bounce back and Babcock go even further down. So far this hasn’t happened although there was a worrying day when Babcock fell 16%. The reason behind the fall is interesting. There were bad results but the Chief Executive unveiled a plan to dispose of non-core businesses and did not propose to raise additional capital. You will recall last year Rolls Royce did issue additional shares at 32p, a deep discount to the market price. Short term opportunists had hoped that Babcock would do the same and when it was not on the cards sold out.
M&S has rallied 3.3% since I sold but gratifyingly Babcock has gained 11%. It’s early days but if I can recoup the money lost in M&S I will try and be sensible and add to my holding in Personal Assets. Now I only hold shares in five companies: MP Evans, Glaxo, Babcock, Rolls Royce and Vodafone (in decreasing order of size).