Masterful Inactivity

“Masterful inactivity” was a maxim I learnt from my grandfather and it has helped me in managing my savings.

I seldom buy or sell so this month has been a flurry of activity. First, I found I had enough cash in my pension to fund it for more than three years so used some of it to top up an existing holding in Murray International which I have always recommended for savers in search of income. In a nutshell it is an investment trust trading at a discount of 5% and yielding 4.5%. Its performance has been bumpy: over one year – 0.6%, three years + 26%, five years + 7%. But every year that juicy dividend.

You may remember in July 2021 I gritted my teeth and booked a 27% loss on Marks and Spencer, switching into Babcock. If not my rationale is here. Last week, after a positive trading statement, Babcock went up at last and it was my chance to sell and make 25%. The company is optimistic about future prospects and they would be, wouldn’t they. I am less sure. An important contract is to build five Type 31 frigates for the Royal Navy. So far there have been cost over-runs, disputes with the MOD and the first frigate is only 40% built. Incidentally, I have similar concerns about Rolls Royce’s ability to build mini nuclear power stations in the UK. If the plan works it will not be for a long time.

Five years ago I mentioned British Empire Trust and said I would buy “when an opportunity arises”. Since then it’s changed its name to AVI Global Trust and I bought some this morning. It’s another investment trust, trading at a discount of 10% and yielding 1.7%. It has performed rather well so the name change was no handicap. Here are the numbers from the Hargreaves Lansdown website. Meanwhile Scottish Mortgage, Monks and RIT are all in the doldrums.