Anyone else having a rough 2022?

Can’t just be me, can it?

Underwhelming results from Tristel (TSTL), a profit warning from System1 (SYS1) and general market woes have led to a week to forget for my portfolio. YTD returns below for my shares :point_down:

My two largest losers were sadly my two largest positions at the start of the year. Which leaves me down 13.7% YTD :point_down:

Portfolio remains weighted towards SYS1:

I have been preparing my next blog post on SYS1 this week. Long-term investment case remains intact (the transition from old-style consultancy work to ‘scalable’ data services), so I remain invested.

Meanwhile TSTL may for the first time in years appear mildly interesting on the valuation front, as its latest figures could have been sand-bagged a little by costs associated by the US regulatory project. But the potential for a US sales bonanza remains as distant as ever.

No other major news has emerged from elsewhere in my portfolio so far this year.

I guess the important point during rough times is to keep monitoring your stocks for opportunities. I recognise looking at portfolio losses is not easy, but the very best market buys tend to occur during downturns when stocks are sold off. Prices can be artificially depressed as investors are forced to sell due to leverage, or they panic sell, or they simply capitulate.

Understanding the companies you own – and why they should overcome the present difficulties – helps build the conviction to hold (and buy!) during rough markets. If you don’t know your companies, you stand more chance of thinking other sellers know more than you… and then selling out at the wrong time.

Making matters worse, perhaps!, is the FTSE 100 showing remarkable resilience this year – up 2%. So much for an index of ‘dinosaurs’!

The FTSE looks to have been held up by banks, miners and oils…

…sectors no self-respecting ‘quality’ investor would ever go near!

The likes of Buffettology Free Spirit, FundSmith and the Nasdaq are down 13-15% YTD, so growth/quality approaches are having just a rough a time as me. Not sure that provides any solace though.

Anyone else having a rough 2022? If so, there may be bargains lurking in your portfolio right now – assuming of course you have dared to look!



The 3 big portfolios I run - for partner, myself and daughter - are down 16%,10% and 9% year to date. Japan and Asia, HLMA and SPX have had a torrid time. My portfolio has benefited from JSE and BRWM. Daughter has done well with HGT and RFX. Nothing intrinsically wrong with the shares and funds, I think, just a question of waiting and reinvesting dividends to achieve lower weighted costs. I suspect there is not so much real trading happening so the markets cannot agree and set proper prices. Hence the drops in good reliable businesses. Unless you sold at the top, it seems pointless to sell now and incur unnecessary dealing costs buying back the same stuff in the future. Unless you need liquidity now, just hold on. Luckily none of us is exposed to Russia and Eastern Europe. The TSTL story is getting frustrating and, having read the chairman’s gobbledegook in the latest report, I am beginning to wonder if management really understands the USA regulatory jungle. Just as CRW never quite seem to gain traction, which led me to sellout a few months ago, maybe it’s the same for TSTL


hi Maynard

A similar story here. My portfolio is down 15.86% ytd.

I’m currently undergoing a full review of my 28 holdings. Actions I’m looking to take are;

  1. Reduce the number of high growth / nil dividend shares. I have been holding too many (approx one third of the portfolio). I failed to top slice when valuations began to get ahead of themselves (e.g. MRL, KWS and LTG) - a weakness I need to remedy and be more decisive in future.

  2. Several of my higher conviction stocks have dipped to attractive valuations so I’ll be looking to do a number of top ups (e.g DOM, SOM, VCT)

  3. I’ve allowed dividend drift over the last 3 years (mostly by holding too many growth shares) so I’ll be topping up existing higher conviction dividend payers and will be opening a new position in CLIG.

Market conditions are likely to remain volatile whilst the Ukraine situation unravels so who knows where the market will go in the short term.

I’ll be keeping my tin hat on and wait for sunnier days ahead.



Hi Maynard,

I think this has been a tough period for what is often called high beta stocks/funds. These are ones that move up by more than the market when it is going up and vice-versa.

A few random observations which may be wrong they are just food for thought:

  1. May people dismiss diversification, even investment gurus like Munger/Buffett. But diversification is insurance against being wrong. It is certainly possible to be wrong. I am a bit wary of having more than 10% in an individual company.

UCITS fund rules are 5/10/40 rules are to ensure that regulated funds stay sufficiently diversified e.g. Fundsmith. No more than 10% can be in one stock and the sum of stocks worth more than 5% can not be more than 40% of a portfolio.

Let us say we follow some aggressive investors and have 50% of a portfolio in three stocks we will be massively hit if they all go wrong. It can also be useful to be diversified by different company types.

  1. Position-sizing - This area tends to generate a lot of debate. Most new investors position-size according to the potential upside. And many investment gurus encourage this. It sounds great in theory? Our best ideas should be the largest position sizes.

The problem is that it leads to people betting the most on the riskiest stocks because these are the ones with the most potential upside. But they also have the most downside.

Risk should be the top priority for a portfolio. The very point of a portfolio is to mitigate risk otherwise we would just bet on one stock. It follows then that we should position size according to risk.

This means that the largest positions should be lower risk and smaller positions can be higher risk. The alternative approach of having high risk stocks as top positions creates significant portfolio downside risk.

I have personally got wrong position sizing according to upside rather than risk. Risk is much easier to focus on. When I look at funds I want the top positions to be sound companies as opposed to unproven companies. This is one reason I have not been so keen on Baillie Gifford-run funds.

  1. How much volatility can you take?

The same investment styles tend to move together. We have seen that this year. Growth/quality have sold off a lot. If you only own those you will have suffered from significant volatility. Many of us can take volatility in theory but not in practice.

Some portfolios are 20% bonds and 80% stocks to reduce volatility. If the stock market goes down 50% this portfolio would only be down 40%, which can be easier to stomach. It would be rebalanced over time to keep bonds at 20% and so if markets fall the bond part would be reduced to buy equities.

So it has fallen 50% and is now worth 60 and the bond part would be worth a third of the total. It would be reduced by selling 8 in bonds and using that to buy equities. Similarly, we rebalance away from equities if markets rally.

This actually has the potential to improve returns if we see lots of bull and bear markets because it sells stocks during the bull run and buys during a bear market.

We should be honest with ourselves about how much downside volatility we can take. There is no point having a 100% equity portfolio if you panic sell near the bottom. Nothing wrong with having a % in lower risk assets to provide a smoother ride.

Stocks like Amazon have been massive winners but have had huge drawdowns along the way. Can you take the pain? Not sure I would have been able to do so. I am not great at handling drawdowns and so I try to reflect that in what I do.

Some people went 100% into cash during the Covid sell-off in March 2000. They would have been better off having say 30% in bonds and 70% in equities and then their portfolios would have been less volatile.

  1. Have some part of a portfolio in something that will hold up.

Maynard’s portfolio has cash as a large position. But it could be a sound passive fund in lower risk stocks like consumer staples. In my view, this is useful to keep to hand for reassurance and as dry powder. It could be just 1% of a portfolio or 0.5%. Or you can rebalance towards it if markets are strong.

Let us say stock markets are very strong you could slowly increase the cash position. I wouldn’t really call this market timing it is more a case of rebalancing away from risk assets while they are doing well in the same way the 20% bonds and 80% equities example did previously.

  1. potentially rebalance away from stocks that have done well.

Small cap stocks are volatile and can go wrong. If one has gone up a lot it makes sense in my view to rebalance a bit. A lot of people seemed to hold Best of the Best as it went up believing it would be the next big thing. But in my view, it would have made sense to say take 50% off the table over time.

Mark Slater does reduce stocks that have done very well to reduce his risk exposure to them.

  1. Stress test your portfolio

What if your top 5 positions went wrong. Could you survive that? It is unlikely that all 5 would below up but what if they did?

Cake Box -

Cake box - I used to have a big position in this and was optimistic about the company. But I realised I didn’t really have time to monitor it and so exited and replaced it with funds. This was a bit gutting as the share price kept on going up after I sold.

But my rationale for exiting is that to really protect my investment I would have to read all the annual reports, announcements and do competitive due diligence etc. At the moment I don’t have time to do that.

Cake Box now appears to have some accounting issues as highlighted by Maynard and so thank heavens that I sold.

Quick thoughts!


Hi Andrew,

Yes, diversification through different company types. Trouble is we tend to find an investment strategy that works for us and we then gravitate towards the same type of company!

Fundsmith and Buffettology are down c15% YTD even though they have the 5/10/40 rules. They have gravitated towards growth/quality/compounders over time and such shares have been sold off of late. Holding many shares has not helped them this year. Herald IT has 300+ shares , but is down 24% YTD. All due to being exposed entirely to TMT small-caps, an asset class that has been sold off…

You could of course have spread your risk by having a bit of Fundsmith, a bit of Buffettology, a bit of Herald… but only by having some miners/banks/oils would diversification have saved your YTD. And by owning a mixed bag of sectors over time, you may enjoy low drawdowns in rough markets but perhaps not enjoy great gains in buoyant markets. So this year’s sell off has to be put into perspective with gains enjoyed in prior years.

I think rebalancing is a good idea, although from experience I have rebalanced far too early at times and should have let my winners run! I guess if you want to enjoy a HLMA-type long-term compounder, then you have to stomach the ups and downs on the way (and the chance of in reality holding a BOTB-type disaster!)



My “quality dividend” portfolio had been quite flat for the year so far, a bit like the FTSE 100 but for different reasons. But in the last couple of days there have been some huge movements and it’s now down 12% for the year.

So far results season has gone well and pretty much every results announcement has been either good or very good, so I’m not overly fussed about the share price declines.

I just assume it’s something to do with the war and, just as in the early 2020 crash, give it some time and they should bounce back. Plus, these falls appear to be creating some nice opportunities to rebalance into the biggest fallers (but only where the fundamentals are still sound).



Many thanks for the updates :+1: Probably little consolation, but if stockchallenge is anything to go by, many PIs are down between 10-20% YTD:

Of 506 competition entries, only 72 are showing a profit and the median return is -16%. I’m now down 17% YTD.

Yes, to do with Ukraine, which itself is exaggerating earlier inflationary trends of rising energy costs etc. No end of smaller companies have seemingly warned of higher costs of late and earlier ‘transitory’ supply problems may no longer be so transitory.

The worry I guess is companies suffer weaker sales growth and higher costs leading to margin and profit pressure. I think that is why smaller shares have been hit hardest during the last few weeks – smaller companies could suffer the most in any potential recession. Factor in the de-rating from some extended valuations seen during 2021, and a few companies (e.g. ITV and Hargreaves Lansdown) deliberating spending more to enhance their businesses at the expense of near-term profits, and the wider price falls are understandable.

So while a rapid ‘relief rally’ could occur if events in Ukraine are resolved, beyond that we have to consider within our portfolios whether past company cash flows/ROEs/growth-rates can be maintained in the next few years. I remain hopeful companies with cash-flush accounts and owner-management stand a better chance of successfully navigating unpredictable times!



Very true. When I said stocks should bounce back I meant in general. In specific cases investors should of course review the company again in light of what’s going on in the world. As it’s results season, stock pickers should be doing this anyway. For many “quality” stock there might be a small reduction in fair value but some companies (especially those operating in Russia or Ukraine) there could be a dramatic decline in fair value.


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Flat. I invested 15% of the portfolio in precious metals. 5% in Chinese share (Alibaba) which have halved. Everything else was in Cash waiting for the inflationary de/re-rating.

Seems to me if a new investor sees long term inflation at 5%, he needs at least a 5-6% yield from equity even at 0% bond interest rates. If the yield on the FTSE 100 @7000 is 3%, it has to derate to 3500 to give 6%. Yes I know, in reality thats not going to work out like that, as commodities are more valuable during inflation, and the weighting of these producer companies increases in the index. But I still expect a drop to 5000 from here. CPI inflation was at 7% - before the war, oil, gas rises etc…

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I ended Q1 down 13.2% – my worst three months for at least seven years:

Always good to compare and contrast with other retail investor bloggers who commendably report their returns :+1:

Roland Head: down 4.4%: :point_down:

@MIA1 down 6.3%: :point_down:

@JamieS down 7.5% :point_down:

@JohnKingham down 9%: :point_down:

@fundhunter down 9.9%: :point_down:

And various funds have not had easy times:

Lots of investors understandably quoting Buffett at the moment. Not sure as many investors are actually buying like Buffett though. He spent $12b buying an insurer during March and apparently $4b buying a stake in HP the other week. Has anybody snapped up their own bargains?


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Good question.

During the 2020 crash, I made the mistake of hoovering up a fair few bargains. The only problem was that my portfolio grew from its usual 30 holdings to 35. By an unfortunate coincidence, I was also beginning to spend a lot more time analysing companies and the combination of longer analysis and more holdings made managing the portfolio a lengthy and no longer enjoyable affair.

So since then I’ve focused on reducing the portfolio down towards 20 holdings, effectively concentrating more heavily on what I think are the best holdings. And that’s what I’ve done so far in 2022.

As share prices have fallen, the first place I’ve looked to bag a bargain is within my portfolio’s existing holdings. So rather than add new holdings, I’ve either sold off the least attractive holdings (sold Photo-Me recently as its existence depends on the flip of a regulatory coin) or trimmed holdings that are close to fair value, and used the proceeds to top up holdings that have fallen furthest below fair value in recent weeks.

So yes, I have hopefully bagged some bargains, but they were already in my portfolio!


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I have come to the same conclusion :slight_smile: I know more about a company that I have owned and studied for some time, than one I have observed on a watch list and not looked at with the same depth. So when market sell-offs occur – due almost always to uncertain events – I tend to have more conviction going with what is already familiar versus scrambling for new ideas.

The approach leads to a less diversified portfolio but the theory is I should get more purchases right through buying ‘what I know’ instead of buying ‘what I sort of know’. I have not bought a new share for my portfolio for five years now.