We all make mistakes. Nobody picks a winning stock or fund, every time. You'll always buy some losers, and I've got two of the biggest of recent months. Yorkshire-based polyhalite potash fertilizer miner Sirius Minerals (LSE: SXX) and fall star fund manager Neil Woodford's flagship fund, LF Woodford Equity Income, Or rather, his former flagship, because he has now been cast overboard.
Highs and lows
I'm not complaining. I knew the risks (although I never expected to foul up so badly). Save your sympathy for the locals who will make a chunk of their life savings in Sirius, hoping that it would regenerate to economic backwater, or relied on Neil Woodford to manage the bulk of their retirement savings. I've still lost real money, though, and I can not afford to do that very often.
I bought Sirius a couple of years ago, when the price was 35p. Right now, the share price stands at 3.15p. Chris Fraser can engineer a remarkable turnaround.
Some people think he can. A government-backed rescue package would send the floor flying to where it was and higher. If I returned to the level I would have it £ 1,000 in more than £ 11,000. So far, the Treasury has been cautious. The risk is almost impossible to assess, making this a total punt, and I'm not a gambler.
From big to small
Luckily I bought CF Woodford Equity Income soon after launch, so I benefited from his first successful year. After that it all downhill, but I hope it will come to good, while ignoring the fact that the blue-chip dividend investor now fancied it as a small-cap stock picker, with disastrous results.
Woodford so got his timing wrong on Brexit, investing in British companies that should come back when our EU exit. So he made a string of lousy stock picks from Kier Group to Provident Financialwhich meant failure on three separate fronts, rather than just one. One factor ties it all together – hubris. Almost three decades of being told you can only go to your head.
According to my Hargreaves Lansdown account, I'm only 25% down on Woodford. I expect it to be a bigger hit but I'll find out more next year, when the fund winds down and we all get left of our money back. So what was the one thing I got right in this apparent omnishambles?
Even at its peak, Sirius Minerals never made more than 0.5% of my portfolio. With Woodford, it was less than 1.5%. Year-to-date, my ISAs are up around 12%, including both capital growth and dividends, so overall I am quieter than before.
Individual share price meltdowns and fund collapses hurt, but as long as you spread the risk around, you can still come out on top.
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Harvey Jones owns shares of Sirius Minerals. The Motley Fool UK has no position in any of the shares mentioned. In our subscription services, we recommend the following: Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.