Fun fact.

The international distress signal ‘Mayday’ was the invention of Senior Radio Officer Mockford in 1923 and is based on the French word ‘m’aider’ meaning help me.

Little I’m sure did he realise how apt it would become in 2019.

Anyway, in recognition of the vastly too long end of year report this one will be snappy, full of pith and heavy on the brevity.

Happily, the general consensus and resultant panic of economies being recession bound has abated and markets generally have staged recoveries of historic proportions. This in turn has seen the portfolios rebound strongly in the first couple of months of this year (returns of between 4.76% for Cautious Portfolio and 7.49% for the Adventurous Portfolio); but as we have always said the focus is on the year-end figures and more importantly the long-term returns. So, although it is a relief from last year, we are not getting carried away.

So, where do we now stand?


I read a wonderful book years ago called The Alchemist; a parable about the journey of experience leading to the realisation of the many merits of where one starts from, but only revealed by difficult albeit enlightening journeys through many strange lands.

This looks comparable to what is unfolding with the Brexit saga.

The deal is initially massively rejected, the ultra-rigid leavers and far more floppy remainers travel this way and that to many points of alternative, but ultimately realise for many disparate reasons the best solution is actually the first one that no one liked. This is true exactly because no one likes it. The balance is in the shared disappointment.

The exercise has been to painfully squeeze both edges towards the middle with the realisation that to hold out for what either really wants is to risk losing what they’ve gained or not lost; we leave but not destructively in essence.

There is still much bile to flow under the bridge before a deal is reached and there is room for disaster, but the currency markets are indicating through a strengthening pound they do not think it will be a solution ‘in extremis’.

U.K. Stocks are Cheap (but for a reason)

If Brexit is settled without a declaration of war, the peace dividend will be significant for U.K. shares which are anything between 15-30% below their long-term valuation metrics due to current uncertainty.

The property market will also benefit, there’s much pent-up activity, if the storm blows over and with interest rates so low it could be an active second half of 19 for housing.


A deal looks likely and will be excellent for stock markets but has to an extent been anticipated already in valuations. There will be a positive bounce, but it may not be as big as some expect in the US; it could be much more significant in China though which had an Annus Horribilis in 18.

Powell Blinked Like A Man In A Sandstorm

Federal Reserve Governor J Powell, he of the once hawkish tone on interest rates spent January castigating himself before markets for his temerity in suggesting rates had higher to go.

You misunderstood he said, “far from normal” actually meant not going up again anytime soon, wasn’t that obvious?

Markets have pardoned him but with the implied warning that if he disappoints them again their response will be terribilis.


The damage of the highly uncomfortable last few months of 18 has been repaired in record quick time since Jan 1, partly, one suspects for the simple reason that it was a tantrum.

There is much to be settled in the next few months and in markets ‘caveat emptor’ reigns if things turn sour but there is upside if reasoned conclusions are reached.

PS If you are wondering why all the Latin, I recently met the poor man who tried and failed through no fault of his own to teach me the subject. I remember his kind but resigned expression as he repeatedly failed to install in me even the basics. I think he was saying “I’m so sorry dear boy but some things are beyond my gift to give”.

It’s the same look I would give Jacob Rees-Mogg if he asked me to like him.

Note: This is written in a personal capacity and reflects the view of the author. It does not necessarily reflect the view of LWM Consultants. The post has been checked and approved to ensure that it is both accurate and not misleading. However, this is a blog and the reader should accept that by its very nature many of the points are subjective and opinions of the author. Individuals wishing to buy any product or service as a result of this blog must seek advice or carry out their own research before making any decision, the author will not be held liable for decisions made as a result of this blog (particularly where no advice has been sought). Investors should also note that past performance is not a guide to future performance and investments can fall as well as rise.