My stock investing journey (leyy)

[leyy]

Hello everyone,

Firstly, I would like to thank the ASF community and its members for the invaluable wealth of knowledge this forum has provided to me and I am sure to many others. I have been a long time lurker and not so much of a regular poster. But I thought I would share with the community my stock investing journey to date and give a little bit back to ASF. I guess the main reason for this thread is to motivate myself to trade more actively, continue to learn and take on-board feedback/criticism from the ASF community and hopefully teach a thing or two to the beginners.

Firstly a bit about my current situation:

Age: 31
Dependants: Wife (no kids yet, looking to family plan in 2-3 years)
Assets: Shares $150k, SMSF: $165k, PPOR: $780k, Offset acc: $40k
Liabilities: $520k (mortgage PPOR), $30k vehicle finance (0% interest 4 years)
Income: $200k + pa (gross, pre-tax)
Wife income: nil, stopped working and she has invested $100,000 on a small business (commercial lease has started this month)

Spending Habits/Work/Lifestyle: I spend long hours at work average 10-12 hour a days at work during business hours. My job is unrelated to stock investing/trading more in operations/general management. When I am at work I have no free time to watch/monitor the stock market, so I normally do this in the evening/weekends. However, I am very passionate about investing in stocks and enjoy it. We live a very comfortable lifestyle and spend/buy/travel/eat what we want. Really looking to cut back on spending and save more money. Any excess income will be parked in the offset account.

Financial goals for 2015: Purchase 1-2 investment properties, and actively invest in the stock market with existing funds in personal + SMSF accounts and have returns of 15%+.

Trading methodology: I am a discretionary trader that uses a combination of both FA/TA. I like to go through P&L Statements, Cash flows, balance sheets etc. Also I like to review charts and see trends for a bit of TA. I have to say that I am a risk taker and am willing to take higher risks for higher returns. I normally trade small caps – mid caps (some blue chips). I avoid all resource stocks now... micro caps and any stocks with low volume/liquidity. I also trade in the short-medium term (1 month holding period - 2 years)

Background: I first started trading in mid 2008 during the GFC. I lost circa $80k, I also ventured into CFDs and lost circa $50k. I have been heavily burnt on resources iron ore/oil/gas over the last few years (if I did not my current portfolio would be double of what it is currently… I learnt many valuable and expensive mistakes over the last 7 years.

Trading tools: CMC Stockbroking for ASX trades, Comsec for research/charting, Sharesight for portfolio management. Financial review for business and market news.


That’s all for now folks its late, and I will update my recent trades and current portfolio this weekend.

I will also update/document all my trades with some feedback/reasoning, post monthly updates of portfolio and general feedback for discussion.


Thanks for taking the time to read and if you have any questions please fire away. All feedback/criticism is welcomed.


Cheers,
leyy

 

[barney]

All feedback/criticism is welcomed.


Cheers,
leyy

Hi Leyy,

You have what sounds a well planned future with both your investing and your wife/family ..... You have weathered a $130K loss and are still positive in your outlook and finances ........ No criticisms from me

Well done and good luck with your future ...... PS Don't leave the kidz out of the equation too long; they are worth far more 'spiritually' than any amount of savings will ever be

Cheers.

 

[ROE]

move out of resource stock is a good long term investment strategy
They are mostly noises and not much money if you span them over a long period of time.

You doing well, I agree with barney if you want kids have them dont delay and
try to balance your life with family and work.. Work is a mean to an end dont let them
stress you out and cause issues at home.

When I was your age I already have a few, they are expensive but it is a choice I made
and I prefer to have less to have them.

As you get older friends go away, people you used to hang out change what you got is your family
they are with you forever and if you discipline your children well they are your best ever achievement and make living life a dream

 

[leyy]

Hi Leyy,

You have what sounds a well planned future with both your investing and your wife/family ..... You have weathered a $130K loss and are still positive in your outlook and finances ........ No criticisms from me

Well done and good luck with your future ...... PS Don't leave the kidz out of the equation too long; they are worth far more 'spiritually' than any amount of savings will ever be

Cheers.

Thanks for the kind words barney. I agree with the kids part, this is something that I would like sooner than later. However, Mrs leyy is 5 years younger than me so she herself is not quite ready. But i'll try do some more persuading this year

 

[leyy]

move out of resource stock is a good long term investment strategy
They are mostly noises and not much money if you span them over a long period of time.

You doing well, I agree with barney if you want kids have them dont delay and
try to balance your life with family and work.. Work is a mean to an end dont let them
stress you out and cause issues at home.

When I was your age I already have a few, they are expensive but it is a choice I made
and I prefer to have less to have them.

As you get older friends go away, people you used to hang out change what you got is your family
they are with you forever and if you discipline your children well they are your best ever achievement and make living life a dream

Thanks ROE, I really enjoy your posts and contribution to ASF.

Unfortunately I am still holding some of my resources stock for the last several years they are pretty much worthless now and have not sold out. Yes I know I should have cut my losses many years ago with these stocks. But lesson learnt the hard way as we all do sometimes.

And I agree with the comments regarding friends and family. I am fortunate enough to have two wonderful sisters and they are both married so we all normally spend time with each other. Kind of like your own "modern family" (tv show)


PS. I will provide a full update on my trades/portfolio sometime today.


Cheers,

 

[Ryan C]

Thanks for the kind words barney. I agree with the kids part, this is something that I would like sooner than later. However, Mrs leyy is 5 years younger than me so she herself is not quite ready. But i'll try do some more persuading this year

You're doing well from what you've shared so more power and knowledge to you leyy. I'm about your age and still have plenty to figure out myself. However, I had a kid early and doing it on my own now, which is tough at times, but I wouldn't change it. If you're wife isn't ready for kids yet use this time to get as far ahead as you can. Start putting a little away in 'safer' investments or cash for school, childcare etc because time really does fly. Good luck.

 

[leyy]

Please see attached updates of my portfolios.

I have 3 portfolios (2 personal and 1 SMSF)

 

[leyy]

Need to make a decision to cut the losses, some of these stocks just need to go I have been holding onto since 2013.

GBG
GRR
SCD
LYL


I have started using more stop losses and trailing stop losses for my trade management now. In hindsight, several of my stock holdings have gone up 10-25% and as a result of failing to manage the trade to adjust the stop to B/E or using a trailing stop loss. I have allowed the stock to go back down and have a net loss...

I'll give a further update tomorrow regarding some of the holdings.


Cheers,

 

[galumay]

Hi Levy, just some thoughts from my perspective, are you managing your SMSF like your other portfolios? I ask because it would seem to me to be dangerous to be using discretionary trading in an SMSF.

Secondly, do you have something setup to measure your performance? I ask because its one of the more powerful things I learnt from ASF, its very easy to deceive yourself if you dont have a proper comparison. I use the ASX200 total return as a benchmark and have moved to a "time weighted internal rate of return" method to compare my performance.

Good luck with your journey, and its great to see another thread here documenting a member's journey!

 

[leyy]

Hi Levy, just some thoughts from my perspective, are you managing your SMSF like your other portfolios? I ask because it would seem to me to be dangerous to be using discretionary trading in an SMSF.

Secondly, do you have something setup to measure your performance? I ask because its one of the more powerful things I learnt from ASF, its very easy to deceive yourself if you dont have a proper comparison. I use the ASX200 total return as a benchmark and have moved to a "time weighted internal rate of return" method to compare my performance.

Good luck with your journey, and its great to see another thread here documenting a member's journey!

Hi Galumay,

At this stage yes i am trading the SMSF similar to other portfolios. I think moving forward with the SMSF portfolio I will need to put more tools in place to reduce the risk. I will look at position sizing and use stop-losses/trailing stops. Also, with the SMSF I will look at businesses that are undervalued and hold for the medium to long term.

As I said, I am more risk tolerant than the usual (not sure if that is good or bad). But having said that I need to take on calculated risks not a "gamble" which I have been doing in the past.

Thanks for the feedback in relation to measuring my own performance and comparing it to the benchmark. I have not done this before, but I imagine it should be quite easy to compare my performance compared to the XAO/XJO with the same time period. So this is something I will certainly do

 

[Julia]

Please see attached updates of my portfolios.

I have 3 portfolios (2 personal and 1 SMSF)

Hello leyy,

A couple of questions:

What is the time period for these p/fs?

What was your process behind the initial stock selection and the decision to hold the losers?

(No obligation to answer.)

 

[galumay]

Thanks for the feedback in relation to measuring my own performance and comparing it to the benchmark. I have not done this before, but I imagine it should be quite easy to compare my performance compared to the XAO/XJO with the same time period. So this is something I will certainly do

Finding the data is a little tricky, i go to http://au.spindices.com/indices/equity/sp-asx-200 and then you can select a time period, and click on the icon with 3 bars next to the graph icon in the top right hand corner, this will reveal a screen from which you can export the data and get historical values for the ASX200 Total Returns.

Just a thought, if you do move to a more typical strategy for your SMSF you might want to reconsider the idea of stop losses, they may do more harm than good. There are some good threads about the problems with stop losses on ASF if you do a search.

 

[leyy]

Hello leyy,

A couple of questions:

What is the time period for these p/fs?

What was your process behind the initial stock selection and the decision to hold the losers?

(No obligation to answer.)

Hi Julia,

The stocks that have been held the longest are GBG, CAJ and GRR. I have been holding these since 2013. The rest of the stocks have been held for an average from 2 months to 1 year.

I will post some info regarding the stock selections when I get some proper time to review them all.

To answer your question about holding the losers is simple, a very expensive mistake... I guess it was the emotional attachment to the stock or to realising such a big loss to the point where the stock has lost between 70-90% of its value. Something that won't happen again in the future. I have set rules in place to sell off any future stocks before it gets to this stage...

cheers

 

[leyy]

Finding the data is a little tricky, i go to http://au.spindices.com/indices/equity/sp-asx-200 and then you can select a time period, and click on the icon with 3 bars next to the graph icon in the top right hand corner, this will reveal a screen from which you can export the data and get historical values for the ASX200 Total Returns.

Just a thought, if you do move to a more typical strategy for your SMSF you might want to reconsider the idea of stop losses, they may do more harm than good. There are some good threads about the problems with stop losses on ASF if you do a search.

Thanks Galumay this is very helpful.

I will look at this every 3-6 months and measure portfolio performance against the XJO and post some comparisons at end of FY14/15