Sirius Minerals plc: SXX.L - a warning from history

It seems an appropriate time to revisit this post from more than six years ago ...

https://eaglesfeartoperch.blogspot.com/2013/01/aim-stocks-what-to-watch-out-for.html

Tax Planning for Retirement Savings

I've still no plans to 'retire' as yet, because I'm very happy to keep taking on interesting new work projects and therefore the earned income should continue to roll in for as long as I want it to, or at least for as long as the clients still want me to do the work ... 

But there's a looming problem with future work possibilities, in that the majority of the people I deal with in my core group of clients are, like me, also getting older and at some stage they may decide to call it a day themselves. 

This has already happened with two former clients but not entirely due to retirements - people also simply leave and move on to new pastures.  The senior guys and gals I dealt with at these places (senior in terms of their positions within the company) have departed and, although these companies are still prospering, I'm just not on the radar of the next generation of leaders now pulling the strings.  Luckily, in recent years, neither of these clients had been a particularly large contributor to my company's turnover.

So although my company has provided me with a decent income and also made a profit for twenty-odd consecutive years, it's prudent to be planning for a time when most of the work might suddenly dry up, which could happen whether I want to continue or not.

SIPP Performance Comparison ...

At the beginning of September 2014, we opened a SIPP account for my wife into which she pays a nominal sum each month, gets a little tax relief added and her employer also makes a generous additional contribution.

I've been managing this pot on her behalf from the outset, and I've been relatively cautious with the choice of investments since I'm very conscious that it's not my money I'm playing with here ...

The total monthly contributions are not huge and so previously I'd let them accumulate for up to six months before buying any assets, simply to reduce the size of the percentage which was lost to trading costs.   However, more recently the broker has changed its charging structure to a monthly fee which includes a trading credit.  These credits can be rolled over for a few months before they expire, but it effectively means there are now fewer barriers to investing smaller sums more regularly.

There are currently nine separate holdings in her SIPP and they're all collective investments - no individual shares at all - some of which are conservative wealth-preservation funds (e.g. RCP.L and CLDN.L) and some much more adventurous (e.g. SSON.L that was bought at the IPO late last year).  The account is almost fully-invested with only around 2% held as cash, and the weightings of the individual funds range from 2.8% to 15.9% of the portfolio total.

Dividends have been reinvested into the same funds from which they were received, and nothing at all has been sold since the account was opened in 2014, so it's very much been a buy-and-hold approach.  Recently, new money has been used for top-ups of existing holdings rather than opening new positions.

Anyway, I thought it would be interesting to compare the performance of her SIPP portfolio, and its softly-softly approach, with that of my own over the past five years.

Yucca Rescue ?

After its spectacular flowering display last autumn, our largest yucca gloriosa went into a serious decline over the winter.

It was suffering from a fungal infection which shows itself as brown spots on the leaves.  It's happened several times before to a lesser degree and, although there's no cure, the infected leaves can be simply cut off leaving the unaffected ones on the plant.  

However, this time around, every single leaf was discoloured.   Previously, these infections had also started during the winter months, particularly in prolonged wet periods, but last winter and early spring had been remarkably dry.

I first thought perhaps that yucca were monocarpic, i.e. they flower only once and then die, but then I remembered I'd seen very much larger specimens in flower in the Canary Islands, and in that climate it seemed unlikely they'd reached such a size without flowering several times before.

So what to do with the plant ?  A bit of research on the internet seemed to suggest that the top of the plant could be cut off and, with a bit of luck, it may respond by producing new shoots from the side of the trunk.

So in late April, during a spell of warmer weather, this is exactly what I did, cutting the whole head off the plant and leaving a bare stump of 300 mm height.

the freshly cut stump ...

Investment Review - June 2019

Here's the combined portfolio update on the last working day of June :-

Cotoneaster Lacteus Hedge Training

To form our parallel evergreen hedge, we planted the cell-grown saplings at the start of June 2017, so this is now their third summer in the garden.

the saplings after planting in summer 2017 ...

... and in early summer 2018

For the first couple of years, we'd basically just left them to become well established, resisting the temptation to trim or thin them in any significant way. 

Left to its own devices, Cotoneaster Lacteus is of spreading & arching habit and hence very slow in gaining significant height, so by this April there was a dense tangle of low growth and it was time to start training some of it upwards to form the high hedge we want. 

Making a Garden Water Feature - Cascade

Hot on the heels of our waterwheel, we've now built another water feature to sit under the Cypress tree in the south-east corner of the rear garden.

This was an unusual project for me, in that there were no plans drawn up or even preliminary sketches - I had the idea for it one evening, made a start immediately and then everything was just built on the fly over the next few days.

We had five large stepping stones in the front garden bed, of irregular shapes, which I lifted and then hauled them around to the back.  I laid them out in a rough curve around and between some existing plants, overlapping the ends of the stones to establish the required start and finish points of the cascade.

I had some lengths of 2"x2" timber behind the shed, reclaimed from the old rabbit enclosures, and I used these plus other timber offcuts to make a simple carcass with five levels to carry the stepping stones.  I made the first drop much larger than the subsequent ones, to form a waterfall which pours onto the second stone down.   Each stone feeds the one below.  The fifth and lowest stone overflows directly into an underground sump from where it is recirculated back to the top using a pump.

The carcass tower was framed with offcuts of fence boards from our front fence build last year.  

carcass during construction