Chris and Clem Meet Up #15
"Chris a young engineer and Clem an "old" hand meet up regularly (every two weeks) for a few beers and a chat - mostly about Chris' retirement savings.
Chris' late Dad was a good friend of Clem's - that's how the two came to know each other.
These regular meetings started purely by chance. Chris just happened to mention that he was living beyond his means and his financial prospects did not look good.
Clem knew exactly what the solution was for Chris and set about giving Chris some sound advice. Clem was not a financial advisor but had spent a lot of time amongst people that were financial experts. He wanted to share his knowledge with Chris.
This is the 15th. article in that series.
The story continues ...
"Still lockdown!" moans Chris. "This must be hard for you Clem. After all, you've seen it, been there, just about done everything in your colouful life."
"Yes!" said Clem, "I've been around a bit. But this lockdown doesn't phase me at all.
"But having to meet up online like we have been doing is getting on my nerves. And I'm not alone.
"I was in the bank the other day - one of those rare occassions when I was actually paying oney IN to my account and I got chatting to the lady behind the counter. Which in itself was a rarity, since they try to force you to use those damn machines all the time.
"Anyways, we had a really good chat. She was telling mea bit more than she probably should have been, that becuase they (i.e. the bank) can see a lot of peoples' accounts they have a good idea who is doing OK in this pandemic and who isn't.
"Her words were a real to me. She reckoned that dozens, if not hundreds, of small business were either in serious trouble, or going tits up.
"Then we I left the bank, I could see it all for myself. We all can. Our wonderful town centres, littered with shops either closed or boarded up - for good.
"Heart-breaking is the only word that describes it for me."
"I know" Chris agreed, "all those dreams, all those aspirations, done in less than 12 months. It makes me wonder just how many of them were struggling before all of this - and the pandemic has just tipped them over the edge.
"I read not that long ago, that the British pblic, and no doubt it's the same in most Western societies, that people have not been spending money - even allowing for internet sales - to the tune of £150 billion. Then, only last week, I read that this figure is now £250 billion.
"If this is true, when lockdown is over there is going to be a massive boom in spending. That pile of cash will not be put into savings with their paltry rates on offer.
"The general concensus is that there will be a boom.
"Yes, it's hard to imagine but I can snse it with the way the market is performing of late.
"It doesn't seem to want to go up, but it doesn't seem to want to go down either.
"What do you think Clem?"
"Yes, you may well be right. And if you are - what are you planing to do about it?"
"Ah," said Chris. "I have noticed a slight move to the positive. Both Hong Kong and Japan are nudging 30,000. My only worry, if it is a worry, is Wall Street. It looks overbought.
"But, as they say, time will tell. And I don't think we will have to wait long.
"The vaccine roll-out in the UK is a well-run piece of logistics.
"It is ahead of schedule and the only thing that can de-rail it now is the supply of vaccine.
"And, at last, those dreadful numbers are beginning to move in the right direction.
"The number of cases are down, the number of hospital admissions is down, the number of deaths - tragically, still high - is finally coming down, and the so-called "R rate" is now below 1 for most areas.
"All of which will not have been missed by the markets.
"The markets will react positively to all this good news."
"Chris' Own Share Selections"
Clem butted in: "But how will all this be translated into your portfolio, Chris?"
"I'm rather hoping that it will have a knock-on effect to my holdings.
"All the shares in my portfolio are doing really well. I'm a tad disappointed with Morrisons but I'll keep the faith. I still think they are a good option in the food retailing sector.
"There is one share on my watchlist that is really intriguing. You've heard me mention it before - Glaxo Smith Kline (GSK).
"They are a (very) large pharmaceutical company - capitalised around £70 billion - whereby the share price has lagged behind. Some might say for good reason.
"However, there are warning signs. They have slightly reduced earnings for the year ending 2020 and are entering into the unknown next year by splitting the company into two. One new company will be pure pharma and the other company retail.
"I have always been a fan of GSK and can't see them falling by the wayside.
"Admittedly, they have been slow with coming up with a Covid vaccine.
"I have always said that when the share price drops to around 1280p I'll consider buying.
"The price has touched 1250p almost. I thought long and hard, and bought 750 shares at 1275p leaving me with a sad balance of £336 in my SIPP account.
"But the good news is: my total SIPP fund is now a very acceptable £38,384 - I'm so pleased with that - and after a little more than 8 months. Impressive stuff!
"Like most of the shares in my portfolio, GSK are a long-term buy. I'm prepared to be patient. In fact, if I had more money in the pot I would have bought more. And may do so in the future."
"And, come April, when I get my salary increase, I'm going to 'up' my SIPP contributions to £1000 per month."
"Oh, how wish I were young again" gushed Clem.
"You can see from the earnings graph that 202 earnings were down. But ... they didn't make a loss.
"Look even closer and you can see that their earnings for 2019 were also slightly down on the rising trend established in 2016 whan they had a BIG leap on 2015 earnings.
"2021 earnings will be eagerly awaited will they get back to the trend shown on the graph or will they be flat, or even worse. Time will tell.
"I'm backing GSK, they are a fantastic company with dozens of new drugs in the pipeline, and admittedly, drugs where the patents are expiring. But this will always be the case - because they are that big.
"I wouldn't bet against them with regard a Covid vaccine either."
"What research have you done this past couple of weeks?" asked Clem.
"Not a lot" replied Chris.
"I obviously looked long and hard at GSK, what with the slight drop in earnings and impending split into two next year.
"I am still trying to find the time to do some in-depth reseach. I'm just bogged-down with my new job, but that won't be forever, and I'll get back into the swing of things.
"OK" said Clem, "What about your watchlist? Have you added any companies to that?"
"Ah, funny you should ask. I'm always on the look-out for opportunities." answered Chris.
"Here's my watchlist as it stands right now:
"I promise, the next time we meet up, I will have a spreadsheet re-developed to add these to and with my research. I expect the list to be a lot smaller by then - they can't all be buys - can they?
"Let's meet up again in 3 weeks' time" said Clem.
"Yeah, that'll suit me. I'm getting real busy at work just now.
"That'll be the 5th. March" Chris checked on his iPhone. "as ever, I'll look forward to that. Let's hope we can get back to our favourite watering hole soon, instead of this behind a screen palava"
Disclaimer: Any individual shares discussed on this website are NOT recommendations. They may, however, be the actual portfolio of the writer.
This website is not authorised to give financial advice of any kind.
Chris and Clem Meet Up - hopefully, the last time before lockdown easing
Chris and Clem Meet Up - at last! They can meet in the beer garden
Chris and Clem Meet Up and it is Chris' turn to do most of the talking. Chris' little windfall has allowed him to widen his portfolio. Chris vows of more.