Julia
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Brian, what stocks are in your p/f?
Retirees - model share portfolios
- Thread starter brianwh
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Hi BrianW,
Always interesting to see others portfolios
As you made reference to portfolio volatility compared to ASX200
By way of comment, you hold no STW, (or ETF or LIC) which can simplify and smooth returns for retirees.
BHP is the behemoth of the ASX, 11% of the XAO, I would be just as happy overweight than under.
As I think you mentioned RIO is hard to ignore
Always interesting to see others portfolios
As you made reference to portfolio volatility compared to ASX200
By way of comment, you hold no STW, (or ETF or LIC) which can simplify and smooth returns for retirees.
BHP is the behemoth of the ASX, 11% of the XAO, I would be just as happy overweight than under.
As I think you mentioned RIO is hard to ignore
Julia
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This is not advice, etc etc., but if I'd bought WES at the March low and seen the steady uptrend since then, I'd be letting my profits run.
Others will disagree and take part profits. Only you can decide.
OK, consider perhaps that the ASX 200 will include some smaller cap stocks which have enjoyed a greater increase in the SP than some in your p/f.
You seem to be well diversified across sectors. This is really important to some people. It's not to me. I'd prefer to be in sectors (or individual stocks) which are doing well at a given time, and don't have a problem with not being diversified.
That's one approach. A lot of people find it necessary to work in conjunction with a public benchmark. Personally I don't care. My aim is to provide a comfortable living from my capital, whether fully or partly from shares.
If I do that, then it's immaterial to me whether I am above or below any benchmark.
I have a relative who has sufficient capital to just stick it in term deposits.
Even if it earned nothing he would have more than enough to live on just using up the capital for the rest of his life twice over.
So, depending on how much capital you have, you may choose to be very conservative, or more aggressive. If you have a large margin of more than you need to live on with the way you are set up at present, then if you're not particularly interested in the market, fiddling about with the pF is probably unnecessary.
I've had periods of needing to be quite aggressive in approach to grow my capital. At present I'm happy to stand partly aside until there is more consistency. i.e. avoid the anxiety that the market could still take another large dive.
OK, as above, that's a diversified p/f. However, it doesn't contain any standout high performers,other than WES, and does contain a few which are doing nothing in particular, almost flat effectively.
Perhaps you bought these for the yield, though I haven't checked what that is.
You earlier mentioned you wanted more exposure to the banks. Is there any particular reason for this?
As an exercise, and taking into account your wish to own more banks, if you go through the charts of your above list, thinking to cull say three companies in order to buy three banks, which would you drop?
Others following this thread may also like to suggest which could be dropped from Brian's list and replaced with ???
Of course, no obligation to do any such exercise. All I'm trying to do is extend the discussion for the benefit of all of us, and maybe clarify your own thinking.
As Julia said are we dealing with ample / adequate or barely adequate $$$, it makes a big difference...
Many of your stocks are largish in the ASX and thus simlpy because of thier immense size will rize and fall (generally speaking) less then there smaller counter parts....
Similarly because they are huge mature companies, growth opportunities are less then some of the up coming asx200 inclusions eg: JBH etc which is still rolling out 22 stores per annum using its high ROFE and ROE formula
This limited growth is not such a bad thing depending on your investment goals....it looks like your a bit of a yeild chaser which also severely limits volatility as most the share holders couldnt care less about the share price, they just want the dividends to keep rolling in.....
Additionally theres an old formula....its not always true, but its true the majority of the time......
You cant have low risk, high yield and high growth......you can usually get two of the three though......
In chasing high yeilding stock sometimes you get caught with a slow growing portfolio
Harpoons will get shot at me for this comment, as everyone likes to think they can get all 3.....and sure you could in june last year when great stocks where cheap, but the risk was through the roof....and even though I was in there buying, there where a lot of unknowns at the time...
And yes there will always be isolated times and cases where people pick up great stocks cheap and get all three, but generally the market prices this in and its not generally available...
The market like to price it so most big stocks come out close in the long run, so growth stocks operate on low yeilds, high yielders generally have low growth and risky stocks can usually provide growth and yield...
You seem to be predominatly in the yeld camp...thus less growth...
Many of your stocks are largish in the ASX and thus simlpy because of thier immense size will rize and fall (generally speaking) less then there smaller counter parts....
Similarly because they are huge mature companies, growth opportunities are less then some of the up coming asx200 inclusions eg: JBH etc which is still rolling out 22 stores per annum using its high ROFE and ROE formula
This limited growth is not such a bad thing depending on your investment goals....it looks like your a bit of a yeild chaser which also severely limits volatility as most the share holders couldnt care less about the share price, they just want the dividends to keep rolling in.....
Additionally theres an old formula....its not always true, but its true the majority of the time......
You cant have low risk, high yield and high growth......you can usually get two of the three though......
In chasing high yeilding stock sometimes you get caught with a slow growing portfolio
Harpoons will get shot at me for this comment, as everyone likes to think they can get all 3.....and sure you could in june last year when great stocks where cheap, but the risk was through the roof....and even though I was in there buying, there where a lot of unknowns at the time...
And yes there will always be isolated times and cases where people pick up great stocks cheap and get all three, but generally the market prices this in and its not generally available...
The market like to price it so most big stocks come out close in the long run, so growth stocks operate on low yeilds, high yielders generally have low growth and risky stocks can usually provide growth and yield...
You seem to be predominatly in the yeld camp...thus less growth...
Thanks for your thoughts Julia. Here's my response
As you said WES has been a very good performer but have also had around 70% gains from LEI, TOL and WPL. TLS was probably largely a yield play but in general I am agreeing with Condog that yield is only one factor in picking a stock and not the main one at that - perhaps a good lesson here, I'm down 10% on TLS play.
The banks. Ugh! If you remember back to the March lows, there was a lot of negative sentiment about banks. I held off waiting to see what was going to happen. This was reinforced around this time by the Intelligent Investor which came out with a lead article saying why people should sell down their bank holdings. And of course, as they say, the rest is history. I've been looking for an entry point ever since. I think I have let this episode get into my head a little bit (I know, I know - emotion and investing is a very bad mix!).
Love your suggestion Julia about 3 stocks to cull - in fact have been thinking along these lines but I'm still seeing upside in the good performers especially if predictions for strengthening domestic and world economy are near the mark. Perhaps a starting point for me would be sell down some WES. And then there is TLS! TAH has been a poor performer and I'm not sure how much upside is in it. But the propsects for the others seem positive and the opportunity cost of selling one or several down and replacing them with bank stocks seems questionable - but I have been saying this sort of thing about banks since early 09!!!
Cheers
Hi AWG
I hold 3 of the more popular LIC's - AFI, ARG and MLT and have been happy with their performances. My comments here have been in relation to a direct share portfolio which I have as an alternative to something like STW.
Agree with BHP and will be looking for an opportunity to increase my holding there - probably will get more BHP rather than add RIO.
Hey Brian my opinion on these -
WES - paid far too much at peak for coles - combined cap of $51B at time of sale, $15 B at bottom, have recovered to $30B.... they are successfully truning coles around.... now is not the time to be selling WES especially if you bought it at the sill highs....WES is slowly showing signs of becomming a buy...and possible out performer in the future...not yet though
LEI - love it but in a cyclical dip due to GFC slowing of private sector contracts, should start to kickk on soon
TOL - not good enough for me to look at, but a macro view they are in a good sector with increasing eco activity and increasing population...
TLS appears to be returning to profitability , I bought them on posiitive signs, but then they came out with a 12 month flat outlook...so i sold them and put the money in JBH which has a 20% growth forcast...why the hell does a company with such huge free cash flow need 128% debt to equity on a big equity base....it defies logic and smells of a rat....definitely a big concern...
ASX has a monopoly and reasonable fundamentals....good stock to hold
QBE - prime take over target, reasonable stock in a good sector
WPL is expensive, but once pluto and other Nth West Shelf ventures come online should be much better....good stock
WBC - diluted its holdings far too much. im in the process of swaping to CBA
BHP - love it, cashed up, probably should have bought more assets during GFC, time will tell, good sector for the med term
WDC - at bottom of cycle, very positive outlook if US continues to recover
, if US falters ???
TAH - nice yeild, lots of headwinds curbing growth....loss of VIC licence will hurt badly...I got out
IAG - yuk
Others not sure
RIO - have proven to have terrible managment - got themselves in debt strife, did not sell at peak of market, sold prime assets at absolute bottom of market.....dumb dumb dumb on all accounts....a company with excelelnt assets in a great sector, BUT not smart enough for my cash...I will trust BHP for now....stupidly RIO's sp has recovered, but thier earnings potential is decimated compared to pre GFC
Some crackers you missing and could consider - CBA, CSL, Cochlear, Platnum Asset Mgt, JBH, WOW
WOW ad JBH are relatively cheap at present valued around $31ish and $23.50ish with a 14% RR, the others are always exp from a fundamentals point...and are currently expensive
In tersm of banks, they have good market share and lots of pricing power for now... they are risky by nature....WBC ANZ and NAB have heavily diluted shareholders equity and ROE's look set to plumit for some time....CBA looks to be in a much better way going forward...
I am not a broker, these are only opinions and in no way consider your circumstances , seek expert advice...
Agree nearly 100% with everything you say here Condog and appreciate the effort you have made to put these comments together. My near term plans are (which you will see are pretty much in line with your thoughts):
Sell TAH - paid $7.05 so will try to get square here. Not only is the loss of the Vic licence a prob but some of the on-line betting agencies might pose some sort of threat to growth.
In the process of selling a WOW hybrid (WOWHB) and will use at least part of the proceeds to get into WOW.
TLS - I have listened to and read more commentary on this stock than nearly all others combined and still don't know. I am very uncomfortable with this Minister but will probably hang on.
BHP - definitely will be adding to this.
Banks??? - I don't want to think about them. I do have a holding NABHA which I might think of as a surrogate for a while.
Cheers
Sell TAH - paid $7.05 so will try to get square here. Not only is the loss of the Vic licence a prob but some of the on-line betting agencies might pose some sort of threat to growth.
In the process of selling a WOW hybrid (WOWHB) and will use at least part of the proceeds to get into WOW.
TLS - I have listened to and read more commentary on this stock than nearly all others combined and still don't know. I am very uncomfortable with this Minister but will probably hang on.
BHP - definitely will be adding to this.
Banks??? - I don't want to think about them. I do have a holding NABHA which I might think of as a surrogate for a while.
Cheers
Julia
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Thanks for the above, Brian. Really, we are only being very picky in asking for three of the stocks you own to be culled. It's an interesting exercise, though.
I pretty much agree with Condog's summary. If I had to sell three of your stocks to buy something I thought had more potential, those three would be TLS, WDC and TAH.
Now, of course, they will all turn around and shoot up!
It's a worthwhile thread. FWIW I share your ambivalence about the banks, other than MQG in which I have a lot of confidence.
Re BHP v RIO, perhaps BHP's management is more competent.
Hope you will keep us posted on what you decide to do.
A reminder [as disclosed on the NVT thread] that I hold this stock, one that has attracted more media attention this year. Since January they have announced 5 more University partnerships - 4 in the USA and 3 of these in Boston, a world University centre.
Their recent report indicated profit after tax up almost 45% and ff dividends up 47%.
SP 2 months ago was $4.24 and is now $4.87. [It was actually about $2 in January 2008]. The SP actually came back 8c on Friday -- which was hardly an up day and 8c is the amount of the dividend which has a record date of this coming Monday. So I have received growth + dividend.
Right now this is the only stock I hold, having sold everything else in late January. I sold SUN with some reluctance as it has been very resilient these past months, but I hope to get back in later.
Thought, as a retiree, I'd share this info but [the usual and worthy recommendation remains] do your own research.
Apart from NVT I plan to sit on the sidelines for a while and enjoy our caravan where I am right now on the ocean front. For what it's worth I am watching [apart from NVT] SUN and LYL which I also sold with hesitation] in particular.
Enjoy the weekend.
R
PS - I'd post an NVT chart but am not sure how to do this.
Their recent report indicated profit after tax up almost 45% and ff dividends up 47%.
SP 2 months ago was $4.24 and is now $4.87. [It was actually about $2 in January 2008]. The SP actually came back 8c on Friday -- which was hardly an up day and 8c is the amount of the dividend which has a record date of this coming Monday. So I have received growth + dividend.
Right now this is the only stock I hold, having sold everything else in late January. I sold SUN with some reluctance as it has been very resilient these past months, but I hope to get back in later.
Thought, as a retiree, I'd share this info but [the usual and worthy recommendation remains] do your own research.
Apart from NVT I plan to sit on the sidelines for a while and enjoy our caravan where I am right now on the ocean front. For what it's worth I am watching [apart from NVT] SUN and LYL which I also sold with hesitation] in particular.
Enjoy the weekend.
R
PS - I'd post an NVT chart but am not sure how to do this.
I'm all quality small cap and medium cap that I understand well... and I buy lot when Mr Market go jittery and dump these stocks like last 2 years...
CCP
NVT
DMP
SUL
CAB
FGE
CCV
RPX
CIL
TAH
WWA
XRF
ALL
and just one WDC for the biggy
These will be bluechip one day when I retire, I search high and low and most of them I buy before it get mentioned in the paper or anyone notice them
NVT, DMP, WWA and FGE etc..and such not much fanfare but solid performer and got in when people said what's IBT education? (now NVT)
Surprisingly these stocks give out consistent dividend and rising in all cycles beat most bluechip stocks
and I also looking for once Darling that got discard by the market as a dog and load up like CCP
CCP
NVT
DMP
SUL
CAB
FGE
CCV
RPX
CIL
TAH
WWA
XRF
ALL
and just one WDC for the biggy
These will be bluechip one day when I retire, I search high and low and most of them I buy before it get mentioned in the paper or anyone notice them
NVT, DMP, WWA and FGE etc..and such not much fanfare but solid performer and got in when people said what's IBT education? (now NVT)
Surprisingly these stocks give out consistent dividend and rising in all cycles beat most bluechip stocks
and I also looking for once Darling that got discard by the market as a dog and load up like CCP
So_Cynical
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XRF has a Market Cap of less than 14 mill so qualifies as Micro cap IMO and
would be a million to 1 chance of ever being a ASX100 'Bluechip'
Still an interesting Portfolio.
Market cap isn't my concern, business model, capital, balance sheet and various other metrics are my main concern
I can buy stock as low a few million market cap if ticks all the box and I wont touch stock with market cap of a few Billion if the boxes doesnt ticks.
There are dozen of billion market cap stock and I wont go any where near it.
Plus quality small caps, micro cap or mid cap whatever people call it, all you need is pick a good few and it could deliver you the return of all your combine stocks in portfolio -
I have a few such stocks and a single stock deliver 2 times the return of combine of all the other stocks
Like Uncle Ben Graham his GEICO investment deliver more return then all his holding together over 20 years period
Interesting stuff to think about and investigate there Roe - thanks. One difference is that I am already retired [and in the pension phase of a SMSF while still doing some casual consulting].
My ASX investments tend to more conservative but I do take the occasional "punt". I will look at your portfolio carefully -- thanks.
Sounds like XRF has been kind to you? I've never heard of it but will have a look right now.
Regards
Rick
My ASX investments tend to more conservative but I do take the occasional "punt". I will look at your portfolio carefully -- thanks.
Sounds like XRF has been kind to you? I've never heard of it but will have a look right now.
Regards
Rick
Rick - point of clarification. Does your NVT holding make up your entire equities portion of your SMSF?
As at today we hold NVT and cash in our SMSF Brian - that's it.
Until late Jan we had
NVT
BHP
WPL
WOW
WES
SUN
WBC
JBH
LYL
CBA
SMX
AXO
SAI
CNX
[all sold at various degrees of profit]
and obviously less cash.
I'll be back into the market when the time appears right.
Regards
Rick
Brian perhaps I should have added that I am not into a buy and hold strategy at this time. Most of the stocks above [except NVT] were acquired in March 2009. I've essentially cashed out 3 times in the past couple of years. I have also held very small quantities of a variety of other growth stocks.
You doing well if you can time the market like that.
I'm pretty bad at timing the market
I haven't sold any since I bought the majority of them between 2008 - April 2009Couple of time I want to exit a few stocks like NVT and CCP but went over the figure again and decided to hold ....a few baggers in a short time is tempting position in deed and knowing my bad timing I usually sold them too early ... like FLT a 50% profit but it could have been a 4 bagger
that go down as the most stupid decision or reason ever for me to exit a stock ... I shall not forget it and every time I go shopping and see a Flight Centre sign I wont let it forget me...
maybe one day Mr Market will give me another shot at FLT
and redeem my mistake ..it happened twice before ..I'm counting it will happen again....FLT mistake made me hold on to NVT and CCP for many more years yet
I have confident NVT will deliver me multi-baggers
having gone through its business model and I cannot find one stock on the ASX with better business model ..this is an exceptional rare beast..A similar beast to NVT has exhibited in the US many years ago, at the time I'm in high school
this beast delivers a 60 baggers without counting the split, add in the 6-7 times split you looking at a few hundred baggers for the one with the nerve to hold..
http://www.google.com/finance?q=NASDAQ:APOL
and the only stock I add in the last few months is RPX
seem to survive the recent correction ok, time will tell..
and should Mr Market mark it down to 60 cents I wouldn't
mind buying more off Mr Market..
