Improving stock portfolio performance

[Wirrklunk]

Companies normally have at least 10 years annual reports on their website.

Yes! Should have thought of that. Good start but a bit time consuming.

 

[divs4ever]

Noone has mentioned if historic data is readily available for say 10 years. I am about to go on a cruise and would like to fiddle on the computer.

there is some available but caution it may not be up to date

try your trading platform first but there are other free on-line sources

Yahoo Finance ( after you tweak some stuff AFTER you hit the apply button ) will give you some data ( more than 12 months old )

BHP's Company Financials | 10 Year History - Market Index

BHP's financial history with Income Statement, Balance Sheet and Cash Flow (10-year history). Includes earnings, profitability and performance metrics.

www.marketindex.com.au

seems to want you to join before unlocking the data

there are probably others

enjoy your travels

 

[Value Collector]

Yes! Should have thought of that. Good start but a bit time consuming.

There is no real way to speed up the process of valuing companies, trying to go by things like price history, p/e ratios, etc etc doesn’t really cut it.

You have to be able to understand the company at a high level, and that involves a lot of research both real world and cracking open annual reports.

but you don’t have to look at 200 companies, as I said before if you can find 1 great business every 2 years and buy it at a good price you are going be very rich.

As I said I strategy of putting 50% of your funds in a diversified indexes like VAS and VGS, and putting the other half of the good businesses you find over time is probably a great strategy, because the index gives you a nice place to steadily allocate funds into so you don’t have to feel rushed into finding a great business, but as you do find good businesses you put cash into them and to with the hope of beating the indexes, but if your picks turn into duds, atleast you have the index.

 

[Wirrklunk]

There is no real way to speed up the process of valuing companies, trying to go by things like price history, p/e ratios, etc etc doesn’t really cut it.

You have to be able to understand the company at a high level, and that involves a lot of research both real world and cracking open annual reports.

but you don’t have to look at 200 companies, as I said before if you can find 1 great business every 2 years and buy it at a good price you are going be very rich.

As I said I strategy of putting 50% of your funds in a diversified indexes like VAS and VGS, and putting the other half of the good businesses you find over time is probably a great strategy, because the index gives you a nice place to steadily allocate funds into so you don’t have to feel rushed into finding a great business, but as you do find good businesses you put cash into them and to with the hope of beating the indexes, but if your picks turn into duds, atleast you have the index.

I am aware of your good intentions. I do have investments in a SMSF mainly property and ETF so this is educational and hopefully profitable on the side. The number of stocks is not so much a question as what happens if I buy more of the ones that are successful and reduce the ones that have not perfomed. I would presume that a successful stock this year is more likely to be successful next year than a failure this year would be.
.

 

[divs4ever]

I would presume that a successful stock this year is more likely to be successful next year than a failure this year would be.

how do you define success ?

some stocks go through a painful restructure , or a pivotal transformation involving write-downs , good-will impairments that will look terrible on paper ( especially to the tax man ) before coming back bigger and stronger ,

some have ever-rising share prices simply because the company is so big , that every index fund must buy 4,5, 6, or even 7% of the stock to 'emulate the index'

i think you need to dig a little deeper and see why the share price is rising/falling , at least weed out the companies that hardly ever make a profit ( and rely on R&D grants )

 

[Value Hunter]

but you don’t have to look at 200 companies, as I said before if you can find 1 great business every 2 years and buy it at a good price you are going be very rich.

This is the key. Limit the number of companies you look at otherwise it becomes unmanageable.

 

[Value Collector]

I am aware of your good intentions. I do have investments in a SMSF mainly property and ETF so this is educational and hopefully profitable on the side. The number of stocks is not so much a question as what happens if I buy more of the ones that are successful and reduce the ones that have not perfomed. I would presume that a successful stock this year is more likely to be successful next year than a failure this year would be.
.

It depends what you me by successful? do you mean a company that is having success in growing its business and its earnings? Or just one whose share price is rising?

the two can often be different things for a while.

 

[Value Collector]

This is the key. Limit the number of companies you look at otherwise it becomes unmanageable.

I guess you can look at a lot of companies, but you have to have a good mental filter that can weed out which warrant further investigation pretty quickly.

 

[Value Hunter]

I guess you can look at a lot of companies, but you have to have a good mental filter that can weed out which warrant further investigation pretty quickly.

Agree. I meant that you can only deep dive into a limited number of companies.

 

[Wirrklunk]

It depends what you me by successful? do you mean a company that is having success in growing its business and its earnings? Or just one whose share price is rising?

the two can often be different things for a while.

Successful in this case would mean the enrichment of its shareholder ME.

 

[divs4ever]

Successful in this case would mean the enrichment of its shareholder ME.

yes , don't forget the man in the mirror in these calculations ( even if the directors do , at times )

 

[divs4ever]

now at beginner level Warren Buffet has a useful quote ' invest in what you know ( understand )'

one advantage of this is if you seek professional financial advice you have an early hint into whether your adviser is more interested in your success or the commissions generated

so say if a builder ( or tradesman in that industry ) is X32 ( not a real company ) well-run and liable to stay profitable , or are you better off investing in a building supplies business that is running efficiently

 

[Value Collector]

Successful in this case would mean the enrichment of its shareholder ME.

The tricky thing is, the shares that will enrich their shareholders the most in the future few years, might be those that has recently fallen and been unloved, while those that have been rising strongly in the past year might be due for a big correction down.

its hard to invest just looking at past share price movements, it’s like driving looking in the rear view mirror.

You kinda of have to gain the skills of a business man, and buy based business results, not market price data. Other wise you fall into the trap of getting excited and buying high, and getting upset and selling low.

but if you know the business well, und err stand everything about it, you can approach the market with a degree of equanimity and ignore the fluctuating prices and focus on the facts of business.

 

[investtrader]

Noone has mentioned if historic data is readily available for say 10 years. I am about to go on a cruise and would like to fiddle on the computer.

What about something like stockopedia.com.au. Factor based investing is very powerful.

 

[divs4ever]

What about something like stockopedia.com.au. Factor based investing is very powerful.

will write that in my black book as well ( i still have a lot to learn )

cheers

 

[Wirrklunk]

The tricky thing is, the shares that will enrich their shareholders the most in the future few years, might be those that has recently fallen and been unloved, while those that have been rising strongly in the past year might be due for a big correction down.

its hard to invest just looking at past share price movements, it’s like driving looking in the rear view mirror.

You kinda of have to gain the skills of a business man, and buy based business results, not market price data. Other wise you fall into the trap of getting excited and buying high, and getting upset and selling low.

but if you know the business well, und err stand everything about it, you can approach the market with a degree of equanimity and ignore the fluctuating prices and focus on the facts of business.

I am not greedy but would like to beat inflation. I would think that by deleting the worst performing stock each year and investing in a shares with a good track record of doing that and trying to purchase in a mix of sectors should be able to be simulated and results noted. I don't think my attempt at becoming a proficient predictor of business fortunes is a remote possibility. Past my used by date

 

[divs4ever]

Past my used by date

???

that might be your best asset

if you lived through the '70's inflation , the GFC and other major events you have some built in knowledge of what might happen again

sure they will tell you it is different this time ( but will the result be different )

stay agile ( ready consider tweaks ) with your strategy

good luck

 

[Value Collector]

I am not greedy but would like to beat inflation. I would think that by deleting the worst performing stock each year and investing in a shares with a good track record of doing that and trying to purchase in a mix of sectors should be able to be simulated and results noted. I don't think my attempt at becoming a proficient predictor of business fortunes is a remote possibility. Past my used by date

If you aren’t greedy then just buy the index like VAS every month and never sell, it’s simple and takes no work.

trying to beat the market, even by just deleting the worst performing stock is so much harder than you think, and takes so much more effort, and in most cases people fail.

simply put, why would you want to put all the extra effort in to try and beat the market by 1%, when the majority of people that try end up failing and underperforming?

As the Great Ben Graham said, “Getting a sound return is easy than people think, beating that return is harder than it looks”

if you want to try break you portfolio up 50/50 between the market index and your picks, and see if your side beats the index side over 5 Years.