Portfolio Vital Statistics

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Nicholas Underwood
5 years ago
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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 $386,759 Total Portfolio performance since inception 23.07% pa Performance on funds invested in securities since inception 30.37% Cash in portfolio $429 (approx.) (fully invested) I m SORRY.many of the things written here appear over and over and over. But really when you think about it that s how this game works. We take a simple set of rules and apply them over and over and over. And then we do it again. Sure we make some small tweaks from time to time but mostly we stick to our game. That s how this game works.

2 Current Portfolio Valuation.

3 Since Inception performance table Performance since inception (PA) incl divs Newsletter Portfolio (incl cash) 23.07% Stocks in portfolio 30.37% XJOAI 14.09% Star Growth Stocks 14.11% Star income stocks 12.91% Comment. We currently have 20 securities and about ~$460 approx in cash fully invested Losers >10% - Losers 5.1%-10% - Losers 0%-5% - Gainers 0%-5% 3 Gainers 5.1%-10% 3 Gainers10.1% - 20% 6 Gainers 20%-30% 3 Gainers 30%-50% 1 Gainers 50%-80% 2 80%+ - Portfolio comment. Asymmetry in returns. More winners than losers. Cut off losers quickly. Let winners run. 13/20 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 Too much RED To me this feels like a warning that says don t buy unless futures turn green and markets are green

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 1 XDJ Consumer Discretionary 1 XEC Emerging Companies XEJ ASX 200 Energy 1 XFJ ASX 200 Financials XGD ASX 300 Gold 1 XHJ ASX 200 Health Care 1 XIJ ASX 200 Info Tech 1 XJRAI ASX 200 Resources TR 1 XMD Midcap 50 1 XMJ ASX 200 Materials 1 XMM ASX 300 Metals and Mining 1 XNJAI ASX 200 Industrials 1 XPJ Property Trusts 1 XSJ Consumer Staples 1 XSOAI Small Ords TR 1 XTJ Telecommunications XUJ ASX 200 Utilities 1 Comment. More green. Green is a nice colour on this chart Take a look at XFJ (it popped strongly last week) Also XPJ (property trusts) interesting and finally XTJ (telecoms trending down strongly)

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: AGL, AIZ, BKW, CTX, NHC*, 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. Nothing to see here, we remain fully invested at this point When we sell or buy nothing and are fully invested the portfolio takes about 5 mins per day to run. This particular newsletter includes most of the steps I personally check once a week to manage my real world real cash portfolios. (that s why I m happy to keep writing it cause I have to do the work anyway and it forces me to go through each step properly). What s your process?

Stocks worth assessing as suitable for purchase if conditions are right this week Basic Strategy

Income Investing Strategy You can safely assume that I either own the above stocks or are

I d scan the stocks on this table. Reject immediately any that I don t like for any reason.

between 20 and 30 stocks in the portfolio).

especially the ETFs Of critical importance Sell any that hit a sell signal and then re-invest the

8 Stocks worth assessing as suitable for purchase if conditions are right this week Basic Strategy securities ETF Strategy Large Cap Strategy Lincoln Stocks Strategy Value+Market Strategy Hull Income Investing Strategy You can safely assume that I either own the above stocks or are thinking about adding them to my holdings. How I d use this table. I d scan the stocks on this table. Reject immediately any that I don t like for any reason. From the remaining stocks pick the best to invest in and add to the portfolio (try to have between 20 and 30 stocks in the portfolio). If you look through all of these you might be surprised to see how quickly they are growing especially the ETFs Of critical importance Sell any that hit a sell signal and then re-invest the funds whenever all markets seem to be pointing up. *****Note to self Do not follow this approach if all markets are pointing down for such a market open up your down market strategy and do something different.

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. (note I ve added here the hull income investing strategy (it s simply choosing stocks from the filter described earlier in this newsletter and looking for those that also have market support).

Bonus Charts: In this section I ll sometimes list a chart that catches my eye and provide a brief comment.

10% ROE + 1 23% EPSG 16% Div prospective ~4.

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 WOW* Returns inc divs 5year 3 year 1 year 3% 8% 23% Strong Stock ROA+1 10% ROE % EPSG 16% Div prospective ~4.5% gross PE+1 23x After being oversold back in Mid 2016, WOW has grown strongly and I wonder now if it s been overbought with a PE of above 23x (prospective) WES* Returns inc divs(approx.) 5year 3 year 1 year 11% 12% 27% Strong stock Div yield prospective > 6% gross PE prospective is about 20 ROA+1 ~ 10% ROE +1 ~17% EPSG forecast about -3% Cheaper than WOW and has been a better place to be for several years now. Which one do you like better? MQG* Returns inc divs(approx.) 5year 3 year 1 year 31% 21% 42% Strong Stock EPSG+5% Div yield prospective ~5% PE prospective is about 16x ROE +1~19% The millionaire factory has been a great place to be for the past 5 years or more. Can it continue?.

The recent declines reversed sharply last week Currencies The AUD has had a fairly decent slide from it s

11 Parting comment USA Stock Markets What do you see when you look at these markets? I personally see a rising market Oil Prices Again.The recent declines reversed sharply last week Currencies The AUD has had a fairly decent slide from it s peak in early 2018 including a hefty fall last week. This will impact on all sorts of companies in all sorts of ways. BONDS Short term rates are up up up long term rates have flattened.

12 Key Lessons from the past 2 years. 1. There are many ways to enter the markets (in other words to find stocks that are interesting to buy). I should scan all of them and pick the best choices that I feel comfortable with. a. During the past 2 years we suffered a few major market upheavals including the growth stock correction which hit about September 2016 (I think it was also called a great rotation out of growth stocks and into large caps). I was left stuck with a strategy that was no longer working and the newsletter portfolio performance suffered accordingly. b. So instead of sticking with one strategy we now have several and choose from whatever seems to be working at the time. 2. Selling strategy is of extreme importance. I must cut off losses quickly. a. Another way of putting it is that the pareto principal is at work. b. About 80% of my gains seem to come from about 20% of stocks and c. Probably 80% of losses might come from 20% to 30% of stocks however if I cut off all losses as quickly as possible (by sticking to stop losses) then the portfolio wins 3. Every purchase is an experiment. I can try my best to pick stocks with good fundamentals and market support but it s quite possible that the stock will be hit by some sort of calamity after I ve bought some news I didn t know about a change of legislation or competition or scandal or disaster or whatever. As an experiment I quickly cull the losers and let the winners run forever ****. Also I m looking at the overall portfolio performance.i know some stocks will be losers but the overall portfolio strategy is working. 4. **** if a winner runs until it dominates the portfolio perhaps I should be even more trigger happy to sell it.instead of waiting for it to hit a sell signal sell part earlier if price gets wobbly. A2M was in this category (after being up by about 150% it got to weigh more than 20% of my portfolio which seemed too high). Look I m unsure of this it s possible that I d miss out on a massive rise in something like Blackmores (which went up about 10x after I noticed it). Jury s out on this one. 5. Try to be fully invested. Cash sitting on the sideline drags down portfolio performance. I tried to be too clever in the first year sitting on cash whilst trying to pick a small number of good performers.i m now more convinced that the newsletter portfolio has a strategy that works and hence I seek to invest all capital in about positions. I feel this is relatively low risk I suspect that I can get out of most stocks with a max of 1% loss to the portfolio if they start trending down. NOTE TO SELF.in a really bad market all stocks go down quickly and I might suffer a 20% or more decline in available capital I guess that s part of the risk in playing this game. 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.

13 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? 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.

Portfolio Vital Statistics

Portfolio Vital Statistics Commenced on 10 June 2016 with $250,000. Sat on cash for awhile, first stocks purchased 7/7/2016 Now worth $387,359 Total Portfolio performance since inception 22.17% pa Performance