So who had Venezuela in the sweepstake then? No, me neither. It goes without saying 1 January 2013 found me searching for an ETF that tracks the Bolsa de Valores de Caracas exchange – but to no avail. I settled instead for a UK smaller companies fund and, while I am certainly not complaining, it has not quite resulted in the, as I type, 450%- odd Venezuela returned last year.
Mind you, few other columnists will have flagged Venezuela – better known, if we are being brutally honest, for hyperinflation and currency devaluation than eye-watering capital gains – as their star pick for 2013. And, as I metaphorically flounder under what seems a substantially larger than average pile of outlooks for the year ahead, I confess that thought brings me some comfort.
As does the idea, advanced to me a little while back by Schroders Recovery co-manager Nick Kirrage, that even if we knew the macro-economic future with perfect clarity, it still would not do us much good. Say you could tell your January 2009 self the macro outlook for the UK’s banking sector, high street and housing market, said Kirrage, how would you have positioned your portfolio? “You are probably not backing the truck up in housebuilders,” he replied for me.
“You are probably not buying many banks. You are probably not going near any high street retailers. Yet, when we travel through time to November 2013, those turn out to be some of the worst investment decisions you could possibly have made.”
He then reeled off a list of stocks from those sectors that over the last five years have gone on to do a passable imitation of 2013-style Venezuela. And yes, clearly it was all done as part of a party political broadcast for the Value Party but, again, it is still worth bearing in mind as that pile of 2014 outlooks becomes more of a hill.
Speaking of which, another line to strike a chord recently came when I interviewed Ciaran Mallon, Neil Woodford’s successor on various portfolios at Invesco Perpetual and brought up the concerns expressed in some quarters that any significant redemptions from the monster Income and High Income portfolios could make life difficult for other UK equity income managers.
“I just think it is a non-issue,” replied Mallon with the same equanimity he had answered my earlier tactless question about stepping into Woodford’s shoes. “I cannot comment on what Neil is doing in his portfolios but, no matter what he – or anyone else – is doing, flows move prices for a day or perhaps two.
“We invest for five or 10 years. Five years from now, you are not going to think something was not a good investment just because Neil Woodford sold some of it in 2013.” That reminded me of a line from Casablanca I will clumsily manipulate to suit this column’s needs: “The predictions of three million commentators don’t amount to a hill of beans in this crazy world. Some day we’ll understand that.”
Julian Marr is editorial director of Adviser-Hub and Thought Leadership Live and co-author of Investing in emerging markets – the BRIC economies and beyond
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