Global warming may not be good news for everyone but it has certainly benefitted farmers in the Fens. The late mild autumn helped the wheat and corn. The beet came off quite easily and the farmers had an easy time harvesting their pumpkins.
It's not exactly mono-culture round here and you can see why the farmers are constantly trying to diversify. All the modern production techniques in the world won't protect them against the vagaries of the weather – or the vagaries of the market come to that.
It's the same with our shares. What with all the hedge funds and people buying and selling short, the markets are becoming increasingly hard to predict. In fact, we've altered our investment strategy as a result.
We've been sitting on cash for quite a while and you could say we've gone a bit ‘Warren Buffett'. That is to say we are placing less emphasis on speculative appreciation and more on trying to build a long-term portfolio of solid investments in well-managed companies yielding those very old fashioned things called dividends.
This month we reckoned that if we want an investment that's as safe as houses, that's exactly what we should buy. So we've gone into an AIM-listed property company called Oakdene Homes Plc which specialises in new homes and refurbishments in South East England. We got in at 196 and currently they are down to 190, but we aren't too bothered. Earnings per share increased fifty per cent this year and dividends were up twenty-five per cent.
Just like the local farmers, we want a diverse but solid base for our operations with a few reliable long-term contracts. And then we can improve our margins with more entrepreneurial trades when the time is right.
(Readers should be aware that the value of stocks can fall as well as rise and should undertake their own research or obtain professional investment advice.)
