Portfolio Vital Statistics

Transcription

1 Portfolio Vital Statistics Commenced on 10 June 2016 with $250,000. Sat on cash for awhile then first stocks purchased in week of 7/7/2016 Now worth $380,143 Total Portfolio performance since inception 23.80% pa Performance on funds invested in securities since inception 31.47% Cash in portfolio $2,445 almost fully invested Mea Culpa. I made a mistake and have fixed it. I bought slightly too many shares of RHL and JIN recently (less than 100 shares too many). Result was that theoretical cash went below zero by about $200 (which should of course not happen). So I slightly cheated by reducing the purchased number of shares by a very small about (until a cash balance was kept above Zero. Sorry.

2 Current Portfolio Valuation.

3 Since Inception performance table Performance since inception (PA) incl divs Newsletter Portfolio 23.80% (including cash) Stocks in portfolio 31.47% XJOAI 13.16% Star Growth Stocks 11.29% Star income stocks 11.18% Comment. We currently have 17 securities and about $2,000 in cash Close to fully invested. No transactions since 17 March Losers >10% - Losers 5.1%-10% - Losers 0%-5% - Gainers 0%-5% 3 Gainers 5.1%-10% 5 Gainers10.1% - 20% 3 Gainers 20%-30% 2 Gainers 30%-50% 1 Gainers 50%-80% 2 Gainers >190% 1 Portfolio comment. 14/17 stocks closed green for the week All stocks are in hold territory. All look quite safely above potential sell signals

4 Status of US and Aus Markets. Green RED USA DJA 1 USA S&P500 1 USA Nasdaq 1 USA Russell USA VIX (inverted (means 1 Green is shown as RED) USA DJA Futures 1 USA S&P 500 Futures 1 USA NASDAQ Futures 1 USA Russell 2000 Futures 1 Aus XAOAI 1 AUS XMD 1 AUS XSOAI 1 AUS XVI (Vix) (inverted) 1 Mostly Green To me this feels like a green light to buy especially if the USA futures are green by say 1pm on Monday

5 ASX Indices with ROAR above 20% and above 10% ASX indices which closed the week with ROAR 6month) above 20%. (purpose of this section.if an index is going up perhaps consider looking at its component stocks to check for anything worth buying). Indices growing > 20% ROAR 6month or over 10 but under 20% Over 20% Over 10% XAOAI. All ords Total return XDJ Consumer Discretionary XEC Emerging Companies XEJ ASX 200 Energy 1 XFJ ASX 200 Financials XGD ASX 300 Gold XHJ ASX 200 Health Care 1 XIJ ASX 200 Info Tech XJRAI ASX 200 Resources TR 1 XMD Midcap 50 XMJ ASX 200 Materials XMM ASX 300 Metals and Mining XNJAI ASX 200 Industrials XPJ Property Trusts XSJ Consumer Staples 1 XSOAI Small Ords TR XTJ Telecommunications XUJ ASX 200 Utilities Comment. Looks to be a bit of green creeping into the market. If you ve been in energy or health or resources your portfolio has probably done ok

6 VALUE index update Let s call the value index. How it works: Filter stocks with the following criteria 1. Financial health = strong or satisfactory 2. Dividend yield >2.5% 3. PE <15 4. Price to NTA per share above zero and under 5 5. Enterprise value above $500m 6. Excludes mining stocks and most financials (as advised by Alan Hull) Search for Value count We search for (a) sharp increase or (b) decrease in stocks found by this filter. If there are many stocks here then buying value stocks might be a good strategy. If there are few perhaps it indicates we re at the top of the market? From this search the following stocks are possibly worth a look: BKW, CSR*, GNC, TGH, WHC Comment. Graph still flat (sorry for gaps) prediction one day this chart will move strongly up who knows when but we ll see it here.

7 Selling and Buying Report. No buys or sells this week. No transactions since Mid March a nice comfortable place to be

8 Stocks worth assessing as suitable for purchase if conditions are right this week There are loads of things to check out on these lists. I suspect that if you had a portfolio made up of any 30 of these stocks you d have had a decent run in the past few weeks Basic Strategy securities ETF Strategy HACK Large Cap Strategy Lincoln Stocks Strategy Value+Market Strategy You can safely assume that I either own the above stocks or are thinking about adding them to my holdings. There are some here with ugly historical stories (look at TLS for example) and yet they are still on my list. (note I d aim to buy no more than 3% of my portfolio in buying such stocks so even if they go down the exposure to my overall portfolio would be small.

9 Strategies explained. Each strategy attempts to find stocks or ETFs that meet the following criteria. (a) Acceptable Fundamentals (b) Acceptable daily trade volume (c) Acceptable market support at current prices. Go back and read newsletter Year 2 Week 25 for full description of the strategies

10 Bonus Charts: In this section I ll sometimes list a chart that catches my eye and provide a brief comment. If you want a stock reviewed, perhaps me and I might include it (no promises) Chart Comment IMD Returns inc divs 5year 3 year 1 year 6 56% 115%% Strong Stock Prospective PE is 22x Div prospective above 1% gross Dilemma. 2 analysts are forecasting EPSG of 667 (wow). Should I buy. (seems like a decent one to look at for me) MIN Returns inc divs(approx.) 5year 3 year 1 year 20% 48% 109% Star stock Div yield prospective > 5% gross PE prospective is about 12 ROA about 24% Seems to have popped back above the buy line. It s certainly of interest to me. NHC Returns inc divs(approx.) 5year 3 year 1 year -4% 6% 44% Strong Stock EPSG Lincoln 78% Div yield prospective > 7% PE prospective is about 8x ROA forecast 14% PEG is 0.11 (very low) Daily trade about $328k Price has popped back above the buy line and with such a low PE perhaps this stock can appreciate further

11 Parting comment Another nail in the Aussie property bubble? Over the past couple of years we ve seen many straws being added to an overloaded camels back I guess I m trying to say that the Australian property bubble seems to be facing a strong headwind and perhaps at best is unlikely to continue. Examples Increased restrictions on foreign buyers, including increased stamp duties and more careful scrutiny of who s buying Increased taxes such as stamp duty changes for off the plan buyers, eliminating depreciation on buyers of second hand properties and announced vacant property taxes etc Increases in interest rates (initially for property investors) but also for others. Threats of increased interest rates (eg we can see that US rates are rising which puts pressure on local bank rates) Pressure by funders of construction loans to refinance (eg from Maquarie to a Chinese funder) Increased scrutiny of all property loan applications Reduced commissions for mortgage brokers (perhaps some will leave the market?) And how does the above graph apply? Well anecdotally I m being told that buyers who (for example) had $800,000 of mortgage loans approved say one year ago when they go back to the bank upon completion of an investment apartment build are finding that the bank is now offering them a lot less say $650,000 when it comes time to settle. What this graph implies (its from today s Age Newspaper full credit to them) is that a family with $100,000 net income used to be able to get a loan for about $500,000 and now only qualifies for say $380,000 (down about 24%...and this reduction is even higher with bigger loans). If this is true there s simply less money available for people to borrow to spend on properties and if there s less money available perhaps this means property prices will decline. So far it seems prices have simply stagnated (note I ve not done any research myself just based on what I read in the press so take this with a grain of salt).

12 What does this all mean. Who knows?...however if property prices do go into decline that s not a good thing for an investor banking on rising share prices. What will I do differently?...i m just going to stick to my formulae of paying close attention to sell signals and to be careful in entering the market. I still think I have to expose my capital to the markets not sit on the sideline. (note that I will however also in the background quietly prepare my downmarket strategy so that it s ready to dust off when required). How about these charts of overseas exchanges. Looks like a fairly strong bounce back? What do you see when you look at the graphs? It looks to me that there was a fair bit of selling which has suddenly reversed and was followed with several weeks of gains. What will happen next? Who knows. next not me that s for sure) What does it all mean? This is my message to myself Stick to my sell signal process. Go to 100% cash if required Don t assume I can understand the market, or even individual stocks they are simply too complicated to understand. Every holding is an experiment to be proven right or wrong by the market. Buy good quality stocks that have market support and let them run for as long as they appreciate. Be disciplined check for sells daily check for buys weekly. If there s nothing to buy don t chase just wait. If there s something to sell don t wait sell. (note to self read this sentence a few times and pay attention I can see that I ve been guilty of breaking this rule last week!) What s your plan?. Can you describe it clearly. Can you write it down. Can you follow it with discipline. Do you know if you re following your plan or straying? If you don t have a written plan what is the very first thing you can do to make the plan more concrete, clearer and likely to be followed? Can you do that first thing today?

13 Warning. This newsletter is provided for your entertainment only, I m not a financial adviser, I have not taken account of your objectives, financial situation or needs. You should therefore consider the appropriateness of any descriptions of my Newsletter and its newsletter portfolio in light of your objectives, financial situation and needs, before taking any actions. All views and information expressed in this newsletter are not the views of Lincoln and or its directors, agents, representatives and employees. Many of the graphs and screen shots are taken from Lincoln services and are fully credited to them. I m a paid up licensee to Lincoln, otherwise all IP in their system and graphs belongs totally to them. I recommend that you consider signing up to their service it s a great service and I feel great value for money! I do invest and trade in shares, I ll usually mark the ones that I own with (** or *) however it s safe for you to imagine that I m either buying or selling just about any stock in the market, particularly and especially if mentioned here.