Vacation

I've been overseas in Denmark for the last week, visiting a friend in Aarhus and spending a few days as a tourist in Copenhagen. While the trip was overall very enjoyable it was slightly disturbing to see the contrast between the UK and Denmark. Shopping malls, cafes and restaurants do not seem to have anywhere near as brisk business here in Scotland as they do in Denmark. My money did not go very far compared to previous trips to Scandinavia as I got less than 9 DKK per pound.

Trading activity was limited to three purchases

- 1000 RCG at 42.5p per share
- 1000 IPO at 64p per share
- 2200 BRW at 112.7p per share

BRW is a new entrant, this is a financial company doing wealth management, brokerage services etc. Reasonably cash rich, no debt and with 20 billion pounds under management I feel the company share price has been pushed down too far and offers both an excellent dividend (assuming this is maintained in the face of a potential recession) and potential for strong upside in the share price.

As with the other investments the time scale here is several years. I don't need the money and foresee no circumstance where I'd be a forced seller. Macro-economic indicators right now are pretty awful and while a recession will deservedly shake out a lot of 'bad' businesses it will also knock out some good companies or at least make their share prices suffer through guilt by association.

Looking at the portfolio right now there's no doubt that I would have been better off sitting on the cash and making all my purchases now rather than over the last few weeks, however there is no way to predict the exact moment the markets will turn and by waiting for the 'absolute bottom' I'd very likely find myself in cash during the recovery and thus missing out on the chance to buy in at very attractive price levels. To quote the Economist (vol 389, n 8602, page 107) there is $450 billion of cash held in private equity firms and more than $2 trillion owned by sovereign wealth funds currently 'idle' in American treasure bonds. When sentiment turns and this money is invested into the equity markets there will be some huge and very rapid gains.