3 Hour Investor Newsletter incorporating the Newsletter Portfolio Week June-03. Week 52 Special Edition

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1 Week 52 Special Edition

2 A few newsletter Facts has had just over 2,000 views from a touch over 400 visitors. People seem to look at about 4 pages per session on average. The majority of people who visit are typing in the domain into a browser (or perhaps are clicking on a link from an or on slack for example. Only about 60 or 70 have come from search engines or twitter or linked in. The vast majority of views are from Australia a small percentage are from USA and a tiny number come from 11 other countries (probably hackers or people who are lost?) Should I keep this up? I personally get a bit out of writing this. Almost all the things in this newsletter come from checks I run to manage my real world portfolios. The shortlist I come up with is the same as my personal shortlist (mostly if I already have enough of a stock in my portfolio AND it s on the shortlist I may not buy it for my real portfolio this week for example) I ask though are you getting something out of it if so please hit like or comment or something.

3 Current Portfolio Valuation. Portfolio Valuation 2017/June/03 is $294,727 According to Lincoln the portfolio is increasing at a rate of 17.92% per annum. Since inception, securities have returned 29.23% per annum (Over double the XJOAI at 14.04%). The total portfolio includes a cash component. So overall portfolio performance is lower than it s invested stocks component due to holding uninvested cash which we assume has zero interest rate. I also exclude Franking Credits.I simply assume franking credits will pay entire tax value for this portfolio. (I think introducing an income tax calculation would make performance even harder to judge.

4 Comment. We currently have 9 securities and about $31k in cash (or settlements receivable) Losers >10% - Losers 5.1%-10% - Losers 0%-5% - Gainers 0%-5% 2 Gainers 5.1%-10% 4 Gainers10.1% - 20% 2 Gainers 20%-30% - Gainers 30%-40% - Gainers >50% 1 Portfolio comment. 8 out of 9 stocks closed green for the week. All stocks are still in hold territory. We Gained about 1% for the week vs XJOAI gain of 0.65% Our best performer is currently is ALL which so far has produced a 58% approx return since we bought in on 12 July 2016 one of the first stocks bought by this portfolio. We ve also done quite well with IAA, CGF and surprisingly to me SVW. May all weeks be so good.

5 Status of US Markets on (thurs for Lincoln charts and Friday for non Lincoln charts. Dow. Closed Green for the week to thurs And on Friday up a further 0.29% Futures strongly Green (Saturday) Short term moving average well above long term moving average S&P 500 was Green to thurs and up 0.37% friday FUTURES GREEN on Saturday Nice gap between short and long term moving average Nasdaq. Green for Week Futures GREEN. Short term moving average above longer term moving average and gap widening Russell 2000 Green for week, Futures Green Short term moving average remains above longer term moving average Vix closed RED a Green signal for us close to the lowest levels seen by this newsletter

6 Status of Australian Markets XAO All Ordinaries Index. Green and still above the line. Virtually closed the Gap that had formed in MMA, ROAR dropping down towards Zero it s been pretty much flat since about Feb and about the same level that it was in May XMD Midcap 50 Green and above the line Positive Gap still formed in the MMA. ROAR trending a little below to 20% Midcaps have been surging ahead since about January this year. XSO Small Ords Green Below the buy line MMA not open ROAR marginally ABOVE Zero As you can see in quarter there was a sharp drop and since then the small ords has been largely flat. It would seem that this rapid change in sentiment affected many star stocks. XVI Volatility Index was RED (a GREEN signal for us) XVI is trending at about zero In summary I d say there are plenty of green signals. Similar to last week if the market opens green Monday.and USA futures is looking Green on Monday afternoon I ll be seeking to go fully invested with our remaining cash. I need to find charts that are updated on the weekend for Friday night overseas trading anyone know of any source for this?...if so please comment.

7 New section for this report. Here are the ASX indices which closed the week with ROAR above 20%. (purpose of this section.if an index is going up perhaps consider looking at it s component stocks to check for anything worth buying). (if it closed green for the week I ll mention it) XGD. ASX 300 All ordinaries gold. (Green) XHJ. ASX 200 Health Care (Green) XIJ ASX 200 Information technology (just below 20%) Green XNJ ASX 200 Industrials (Green) XSJ ASX200 Consumer Staples (Green) XUJ ASX 200 Utilities (RED) Comment. If we d held ETFs in the above sectors over the past year our portfolio would be advancing nicely

8 Allow me to add a new index to this newsletter. 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) So what we re looking for is strong stocks that seem cheap. Each week we ll count the number of stocks that fit that criteria. In a high priced market there will be few of these. In a low priced market there ll be more of these so perhaps this will allow us to better understand where the market is. Why do this? In a low price market (down market) we ll be looking to buy dividend stocks.in turning market or increasing market we switch to growth stocks so perhaps this will assist us to understand where we are Search for Value count 0 4/02/2017 4/03/2017 4/04/2017 4/05/2017 4/06/2017 4/07/2017 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? Nothing to report at this time.

9 Comments on Star and Borderline Stocks. Stocks in Sell Territory. If I had these stocks I should have sold out. Star Stocks BAP, BBN, NAN, NCK, NHF, PMV, RCG RFG, RRL, TPM Borderline Stocks CKF, DMP, MNF, Stocks that closed Green for week AND are rising at above or close to 20% per annum (based on ROAR) AND are above the line. In other words worth assessment for possible rating as a buy. Star Stocks ALL**, APX, COH, CTD**, FPH, IRI, NST, Borderline Stocks CGC, RWC, WEB, WTC 13 Red 11 Greens Charts worth thinking about. ALL has not hit a sell signal since a loong time. In Sep 2014 it was priced at about $6 it s now $ What a great hold this would have been. APX has really shot up in the last few weeks TNE crossed up recently and seems still heading up FPH is growing at ROAR over 40%

10 Selling Report. Chart Comment AGL Comment On NCK Friday 2 June AGL s stock looked to Has be hit in Swan its sell dive signal mode I didn t like the look of this and so I sold out (both for this portfolio and my real world portfolio) It strictly hasn t hit it s sell signal but something feels wrong so I sold out in the afternoon Sold fees $ Sold at a profit of about $1670 incl divs which was a per annum return of 40.94% One reason that I sold out before strictly hitting the sell signal was that the stock was on a trailing PE of (which is very high) note that it s on a consensus forecast PE of only 22x which is more reasonable. Nothing to report Buying Report. Chart Comment SVW Was on my short list from last week Share price is shooting up at a rapid rate ROAR above 710% PE under 20. Five year return over 14% per annum and 3 year above 21%pa Current year return above 120% Gross div 4.75% with 103 days to go till dividend. So it looked good to me Bought at 11am on Weds 2,800@ with fees of Nicely it went up quite a bit on Friday offsetting the big decline in AGL.

11 Stocks worth assessing as suitable for purchase if conditions are right this week The following stocks are on our potential buy list. Note this list comes from a full review from running all stock filters and then checking all charts on filtered stocks and ETFs these are the ones most likely to end up in the Newsletter portfolio next week as a new buy Ticker Closed RED for week ALL** CGF** X CHC** CPU** CTD** DLX GHC X IAA** IEM IEU** IKO IOO** IVC IVE IXI IXJ NDQ** QUAL SDF** SVW** TWE** What an amazing week. Only 2 out of 21 stocks closed RED for the week. I sometimes close my eyes and wonder if this can be repeated regularly and then I remember the many weeks when the reverse happens and I land back to earth with a thud.

12 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 HUO. Huon Aquaculture Has had a very strong run up since about September 2016 Strong financial health Consensus EPS growth June % Prospective PEG 0.04 (rare to see that low) Historic PE of only 12.3 If it makes the consensus forecast it may qualify as a borderline or star stock maybe. QUAL This is the VanEck MSCI world excluding Aus quality ETF. According to the blurb, it aims to buy stocks that have high returns on equity, stable year on year growth and low financial leverage (some of the things that would qualify a stock for star stock type status It s management costs are 0.4% per annum Daily trade is $512,000 Last unfranked dividend was about 2% paid once per annum. Current ROAR above 24% CPU ** Since breaking a long down trend in about August 2016 this stock has surged upwards ever since Health = satisfactory June forecast EPSG = 27% Historic PE 24x prospective PE 19.7x PEG prospective 0.72 Avg daily trade a healthy $24m Gross div yield 2.5% with 74 days to next dividend. If it hit s its consensus targets it may qualify as a borderline or star stock

13 Parting comment European Markets have trended up well this year would you have picked that trend? here are monthly charts for USA indices going from about 2012 to From these you can see that whilst there have been some wobbles the charts definitely move from bottom left to top right (starting from way back in 2012 to current. The NASDAQ rise has been most dramatic. If I d been brave enough to buy and hold a simple S&P 500 or Nasdaq ETF for the full 5 years I d be very very happy with the returns over that period. Here are crude oil prices over the same period as the above charts definite top left to bottom right movements. Who d have picked that from 5 years ago? What does it all mean? I don t believe I m capable of picking long term trends. I don t believe I have enough information or computing power or emotional control or luck to be able to understand long term fundamentals. The world is simply too complex. What about your level of confidence in this area? How would you rate yourself?

14 Comparison of portfolio returns Newsletter portfolio. Since inception 10/6/ %pa Buffett s Widow passive portfolio. Since inception 1/7/ %pa Star Stocks Portfolio: Since inception 17/11/ (5.67%)pa (horrible) I wonder what the official Lincoln star stock managed fund s performance is. It s obviously been pretty good since inception however 1 year performance would be interesting to see. I wish I d started all portfolios on the same date I really am sorry I didn t think of it at the time. Have a good week Happy investing.. Next week is issue 52 the first year over. 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 mark the ones that I own with (**) 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.