So a Memestock was my first Stock. What Now?

C0N0R wrote: »

Hi, im trying to buy into a few investment trusts on IB and its saying no trading permissions, any idea what I'm doing wrong?

C0N0R wrote: »

That’s what I was thinking, silly question but which one applies to investment trusts? I though I had that covered.

C0N0R wrote: »

That’s what I thought, it’s enabled! I’ll have to do some more digging.

Ruffer Investment Company Limited
An alternative to alternative asset management
During March, the net asset value of the Company rose by 3.0% after allowing for the dividend
paid during the month. This compares with a rise of 4.0% in the FTSE All-Share index. Index-linked
gilts and cyclical equities were the main contributors to performance while options, gold and US indexlinked
bonds were a small drag on returns.
Closing the books on the first quarter, we are pleased to be up 7.3%. Global equities also had a good
start – the FTSE All-World was up 4.0% as investors started to visualise what a recovery will feel like.
Meanwhile, most multi-asset strategies and conventional portfolios were either side of breakeven.
Conventional portfolios have become, by design and by default (via benchmarking), wired to the
assets which performed well in the last market regime. That was a period of low economic growth and
falling inflation. In a nutshell, this equated to prioritising conventional bonds over inflation-linked
bonds, a preference for growth over value and for technology over everything. The problem is that in
the new regime these might all be the wrong trades.
Today, we expect an economic boom in the latter half of the year and hopefully into 2022. What is
the recipe? Take one part pent up animal spirits, mix with accumulated lockdown savings, pour on
lashings of stimulus – serve in a supply constrained glass. Even central bankers are in party mood –
they have said they will not take away the punchbowl until we have overshot policy objectives.
In this world, there will be ample opportunity for businesses that have survived covid to grow sales
and earnings – so the premium put on growth stocks will no longer be valid. Expect cyclical and value
stocks to perform best. In the bond market, the US ten year yield has more than tripled from the
August lows and sits at 1.7%, but it is still lower than where it ended 2019. This is where the real
conundrum lies. The Barclays Long Treasury Index is down over 20% since August, its worst fall in 40
years, reminding everyone there is still risk in this supposedly risk-free asset. Rising yields are also
starting to cause stresses elsewhere. The tide going out revealed Archegos and Greensill to be
swimming naked and gold is down 15% from the autumn peak where we were taking profits.
Our Chief Investment Officer, Henry Maxey, expands upon the idea that traditional portfolios are
going to get chomped by ‘Jurassic risk’ in our latest Ruffer Review. Of course, it is possible this is just a
cyclical upswing before disinflationary forces reassert themselves, but we think the game has changed.
For the new regime, investors need to be more creative in their diversification and protections.
Government and corporate bonds are a mathematically bounded asset class offering low returns and
limited protective qualities. We continue to see a competitive advantage in the expertise we have
accumulated in unconventional protections and also think index-linked bonds will become a key asset
class in the future.
As for inflation, as George Soros said “I’m not predicting it, I’m observing it.” Houses, used cars,
microchips, the cost of shipping – it’s happening right now. We have our protections and a game plan
in place.

Bob24 wrote: »

For sure in the current situation with regards to currency debasement and market volatility, it makes sense to have a couple of defensive trusts as a core position (and I would add gold or gold related equity).

My 2 choices are Ruffer and Personal Asset Trusts though. I like Ruffer because they are doing rather sophisticated stuff to edge the portfolio and are not afraid to go off the beaten tracks (with strict risk control) when they have strong conviction (for example their small Bitcoin exposure). And I like Personal Assets Trust because they have a very clear and tidy traditional defensive portfolio which is easy for anyone to understand and has proven to work fairly well. The reason I left out Capital Gearing is that their portfolio seems untidy to me and I didn't find it performed better than the other 2 so I go for what I understand.

Any reason you picked it over Personal Assets Trust?

MSW: OK, and we protect ourselves with, as discussed earlier, index-linked bonds, preferably US I think you said. And then should we also be holding large piles of gold?

PS: Not in our view. So we do have 2% in gold, short of 2% in gold, and it’s just worth discussing why that's the case. Why so little, given our views? The reason is that gold is supposed to trade at the same real price over time, it holds its real value over time. So, famously, I always recall being told earlier on in my career, the price of dinner at the Savoy had always cost the same amount of gold.

MSW: How much gold is that?

PS: I feel I don't have it in grammes. Because I'm afraid it's been disproved ever since because gold peaked at $850 in 1981, and then fell continuously, until what's generally known as the Gordon Brown low.

MSW: Poor Gordon Brown.

PS: Yes, it was bad luck wasn't it? It was $250 when he sold a lot of our gold. And it's rebounded enormously since. So whatever, whatever else it is, is not constant.

But more importantly than that, I think, is that the real price which is supposed to hold is calculable. We looked at what the price was in 1973, two years after Nixon closed the gold window. It was a pretty free market then, there was plenty of inflation around. I'm pretty sure that gold was not depressed at that time. And it was actually almost exactly $100 then, in 1973, and we applied the CPI in the United States to that, and you get a number, which is just under $600 per ounce. So it trades a very big premium to that.

Now, the circumstances where paying that premium might seem sensible are essentially where people think they might lose everything. So my favourite example would be something like instability in China, which might cause a lot of Chinese people to put maybe just 5% of their money into gold. And that would induce a very big price reaction indeed.

MSW: Interesting. So while, right now, in the past, you might have held gold as a hedge against inflation right now, you should probably be holding at least a small bet as a hedge against political crisis.

PS: Well, yes, because we're pretty convinced that TIPS [Treasury inflation-protected securities, ie, US index-linked bonds] are a much, much better protection against all moderate levels of inflation. So hyperinflation, gold has a role clearly. But against all foreseeable levels of inflation, we think Tips are much better protection.

Shedite27 wrote: »

I think he's suggesting that Gold etc is a good hedge for people in certain situations:
- Dodgy governments (Venezuela, China, Turkey etc)
- Countries with negative interest rates (Europe, Japan, US)
- Billionaires hedging against inflation.

It's not suitable.neccessary for everyone