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 $349,765 Total Portfolio performance since inception 19.85% pa Performance on funds invested in securities since inception 27.51% Cash in portfolio $952 fully invested

2 Current Portfolio Valuation.

3 Since Inception performance table Performance since inception (PA) incl divs Newsletter Portfolio 19.85% (including cash) Stocks in portfolio 27.51% XJOAI 10.6% Star Growth Stocks 8.18% Star income stocks 10.46% Comment. We currently have 17 securities and about $1000 in cash Close to fully invested. Losers >10% - Losers 5.1%-10% 3 Losers 0%-5% 3 Gainers 0%-5% 3 Gainers 5.1%-10% 2 Gainers10.1% - 20% 2 Gainers 20%-30% 1 Gainers 30%-50% 1 Gainers 50%-60% 1 Gainers >170% 1 Portfolio comment. 5/17 stocks closed green for the week (I was surprised again to see any green). All stocks are in hold territory yet BHP is close to its sell signal

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 There s a bit of green in USA markets however (a) USA futures probably will change closer to the opening of markets next Monday. Aussie markets all were red last week. Advice to myself keep my wallet firmly shut until there s mostly green here. Sell any stocks that hit a sell signal and keep the cash in the bank. Do not be tricked into getting back into the market before all is green again

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 Over or over 10 but under 20% 20% XAOAI. All ords Total return XDJ Consumer Discretionary XEC Emerging Companies XEJ ASX 200 Energy XFJ ASX 200 Financials XGD ASX 300 Gold XHJ ASX 200 Health Care 1 XIJ ASX 200 Info Tech XJRAI ASX 200 Resources TR XMD Midcap 50 XMJ ASX 200 Materials XMM ASX 300 Metals and Mining XNJAI ASX 200 Industrials XPJ Property Trusts XSJ Consumer Staples XSOAI Small Ords TR XTJ Telecommunications XUJ ASX 200 Utilities Over 10% Comment. Check out the XNV index (which is an inverse index) it s also rising perhaps an opportunity? Take a look at XVI (volatility index).

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*, SOL Comment. Graph still flat having said that it seems maybe a slight tendency towards increase is seen then again it s so slight it could just be noise

7 Selling and Buying Report. No buys or sells this week

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. Basic Strategy securities ETF Strategy Large Cap Strategy Lincoln Stocks Strategy Value+Market Strategy CSR* Hack ANN EVN AFG CUV BBOZ CSR* NST BPT* EVN* BEAR SVW* BSL* IGO CDA IMD CSR* NGI* SBM* It seems that even in a wobbly market there s good stuff to buy I also like CUV, IMD, NGI CLH CWP* FXL IGL ING* KMD* MNY* NCK* QAN RHL* RRL* SBM* SFR* WHC*

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 NGI* Returns inc divs 5year 3 year 1 year 42% 33% 78% Strong stock Prospective PE is only 13.8x Div prospective above 5% gross This stock has a bit of volatility in its earnings. Consensus prospect is growth of about 90% in EPS. If it pulls that off perhaps will result in a sharp price increase? Daily turnover about $600k IMD* Returns inc divs(approx.) 5year 3 year 1 year -1% 45% 76% EPSG consensus >650% Div yield prospective approx. 1% PE prospective is about 20 This is a drilling services company and warning only trades about $260/day A2M* Returns inc divs(approx.) 5year 3 year 1 year NA% NA% 324% Strong Stock EPSG consensus >125% Div yield prospective approx. 1% PE prospective is about 43x PEG is 0.35 If you buy this stock it s all about the future growth story (hence it s risky). Is this dip worth buying?

11 Parting comment For Week 43. Graph posted by Lincoln on forward PE of star stocks (in their March newsletter) If I was sticking to the Lincoln Star Stock Story I d be looking closely at this graph (published by Lincoln in their newsletter last week) and I d be worried. To my way of thinking owning a portfolio where the average forward PE is above 40 is probably asking for trouble. Why I think this provides for an asymmetric situation where I d probably get (a) more than 100% of market downturns and (b) less than 100% of market upturns. Whilst the stocks that gain the coveted Stat Stock Status are undoubtedly of high quality (mostly) their high PE means that they are expensive and expensive stocks are prone to be related to less than expensive in my humble view. The alternative of buying cheaply priced stocks probably exposes my portfolio to (a) more than 100% of market upside and (b) less than 100% of downside. I believe that Greenblatt s market testing indicates that his system gains about 140% of any market upturn and only 95% of a downturn. Are we about to enter dot com bust II? Look at this graph for bitcoin in USD (is this a bust?) Bitcoin provides no return. Peak price of nearly $USD $20,000 and now sits at about $8,000

12 Amazon. Peaked at about $1,600 USD and has since slipped to $1447. PE currently is 316 (not sure if that s prospective or historic). How much does this company need to grow to be worth it s current price?. It has a market cap of $700billion Nvidia Another highly valued tech company with market cap of $USD140billion, PE of 50x. It peaked at USD $254 and has since slid to $221

13 Facebook. Market cap 464 billion PE ratio 26x. Dropped from peak of $195 down to current $138 Tesla. This company produces less than 5% of cars produced by say BMW and yet is valued in a similar ball park. BMW makes about 10 billion euros profits Tesla loses money every quarter and is forecast to continue making losses well into the future. Share price peaked at about $389 and currently sits at $248

14 What do you see when you look at the graphs? It looks to me like some silicon valley tech stocks have enjoyed dramatic price appreciation over a long period of time and just now something has changed. Are governments and markets pushing back against their dominance willing to change tax and other laws to prevent their massive growth?. Are investors starting to think that the game has gone too far towards the future growth story? I think I once heard Zig Ziglar say something like economists have predicted 18 of the last 2 recessions. He used the term to teach people not to be pessimistic. Personally I look a the above graphs and think that maybe there s a time bomb sitting in there with high PE stocks able to lose billions of market cap within a short period of time. The flow on impact to the markets and the real economy could be large. Who knows when or how it will happen however I think it s reasonable to suggest that the time of a big change is closer now than it was yesterday International markets What do you see when you look at these charts? Volatility has increased this year however has the general uptrend been broken? It seems reasonably clear that Japanese and European markets look like there are in a correction. USA markets perhaps a little less clear however volatility is definitely up and there s more danger around. What does it all mean? This is my message to myself Hold the finger over the sell button. Press it firmly only if and definitely if a sell signal is hit. Don t press before hand. (well maybe if a stock represents over 25% of a portfolio perhaps lighten up a little not sure about that one). DO NOT ALLOW A STOCK TO SINK BELOW IT s SELL SIGNAL. GO TO 100% CASH IF That s what the market tells me Buy good quality stocks that have market support and let them run whilst 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?

15 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.