Retirees - what are your top 5 long term stocks?

[Muschu]

Hi

I'm ignoring the "5" and the "long term" components of thread title because, as mentioned above, times have certainly changed and [in my case at least] I no longer have a buy and hold approach. [Although I'd like to for the sake of ease...]

However I thought other retirees may be interested in sharing their current approaches and some of the stocks they hold.

In our case we have gone from having only 1 hold back in March to now having over 30 -- seeking diversity and looking where the opportunites seem to be. However some of these 30 are tiny holds. We have crept back into the market since March and our SF is presently about 20% cash and 80% in the market.

The larger holds [in order of portfolio value] are presently:
NVT [please see comments in earler posts]
SUN
WBC
WPL
BHP
IVC
CBA
LYL
CNX
WOW
WES
DJS
JBH
SMX
SAI

Obviously in the rally all of these have been pretty OK. Dividends have not rules my decisions but are factored in.

I'd be interested in what other "mature investors" are up to these days.

Best wishes

Rick

 

[nioka]

CER, CNP,VPG,LYC, BUL,

 

[Muschu]

CER, CNP,VPG,LYC, BUL,

Thanks Nioka - will have a good look at these. The smiles suggest you are pleased...

 

[Sean K]

CER, CNP,VPG,LYC, BUL,

The smiles mean he's ramping.

Long term stock for retirees? LOL

 

[brianwh]

Hi Rick - is this list the equities component of your SMSF? In my own case I have approx 40% of my SMSF in equities with the major holdings:

LIC's: AFI ARG MLT (1/3)

Direct Shares: ASX LEI ORG QBE SHL TAH TLS TOL WES WPL plus small holdings in NHC and TFC

As you can see - no banks (except in LIC's) which is thanks to taking advice from Intelligent Investor! and no property.

The questions exercising my mind at the moment:

1. I have been waiting for a pull-back in the banks which to this point in time has been a bad decision (nearly as bad as listening to Intelligent Investor!!) - should I resign myself to buying at market highs or accept a portfolio without them.
2. I am comfortable at the moment without property but there are signs that this sector is moving. What do others think?
3. I have an uneasy feeling about the market at the moment - should I lighten up on some stocks and get back into cash?

Would be very interested in the thoughts of others on these issues.

 

[MrBurns]

Hi Rick - is this list the equities component of your SMSF? In my own case I have approx 40% of my SMSF in equities with the major holdings:

LIC's: AFI ARG MLT (1/3)

Direct Shares: ASX LEI ORG QBE SHL TAH TLS TOL WES WPL plus small holdings in NHC and TFC

As you can see - no banks (except in LIC's) which is thanks to taking advice from Intelligent Investor! and no property.

The questions exercising my mind at the moment:

1. I have been waiting for a pull-back in the banks which to this point in time has been a bad decision (nearly as bad as listening to Intelligent Investor!!) - should I resign myself to buying at market highs or accept a portfolio without them.
2. I am comfortable at the moment without property but there are signs that this sector is moving. What do others think?
3. I have an uneasy feeling about the market at the moment - should I lighten up on some stocks and get back into cash?

Would be very interested in the thoughts of others on these issues.

I don't subscribe to any of those any more since taking advice from Charlie Aitken in Alan Kohler's newsletter to sell Telstra, that little gem cost me $40,000......

Not big on shares but recently decided to buy the big 4 banks, didn't put a lot in but enough to make it interesting and I'll leave it there, I figured this way -

The big 4 are a virtual monopoly, it may not always be rosy for them but they cant fail over time.

They are still down considerably on their highs so might as well get in now.

Also bought Fairfax on a punt that the removal of Ron Walker will give them a boost, I'm told by an insider though that it will be a long time before they go anywhere, another insider told me they would be finished in 5 years, they still rely too much on print.

And bought some BHP as once again I don't see them going under, I don't trust the Chinese Govt to always be there buying from them so didn't get too many.

 

[whereu]

I have shares in 37 companies listed on the ASX

The percentage holding based on 25/09/2009 closing prices are
MEO 11.8%
BUL 7.11%
AQP 6.85%
LNG 5.77%
IPL 5.21%
BDG 5.21%

The rest fall below 5%.

Obviously some shares do better than others, but I am too new to the game to know what diversity in holdings really means. To old hands this probably sounds like an admission that profoundly displays my ignorance. What I don't yet understand is the extent to which the whole market moves in one direction or other in unison versus some moving against the trend.

Half of my top 6 are in the energy sector, so may be overexposed here. Please don't regard this as anything more than a disclosure of what I hold. Advice is neither intended nor implied.

 

[So_Cynical]

I have shares in 37 companies listed on the ASX

The percentage holding based on 25/09/2009 closing prices are
MEO 11.8%
BUL 7.11%
AQP 6.85%
LNG 5.77%
IPL 5.21%
BDG 5.21%

The rest fall below 5%.

So your not to keen on dividends? or not gona hold longer term? seems a strange bunch of stocks to hold as the top end of your portfolio.

 

[awg]

I have shares in 37 companies listed on the ASX

The percentage holding based on 25/09/2009 closing prices are
MEO 11.8%
BUL 7.11%
AQP 6.85%
LNG 5.77%
IPL 5.21%
BDG 5.21%

So your not to keen on dividends? or not gona hold longer term? seems a strange bunch of stocks to hold as the top end of your portfolio.

Depends, So-cynical..most of the stocks shown are up over 100% recently.

that can send them to the top overnight in a diversified portfolio.

At one point BEPPA was my No1 holding when it went up 250%.( sold it after a bad ann, and missed most of the profits)

My present top 12 are (held in SMSF)

CBA, BHP, STW, FLX, MTS, MCW, WOW, RIO, GXY, NCM, ANZ, CNX

cash 30%

I completely re-stuctured my holdings during GFC, selling all MINs and most stocks, and have been rebuilding my portfolio..some I sold and didnt re-buy am kicking myself, such as MQG.

hold about 20 others, under constant re-evaluation, many investors dont worry about dividends, including Warren Buffet, and much prefer ROE as being a better measure of investment potential.

I am of this view, although I do prefer some dividend and high franking credit for most of my portfolio.

see a good article by Nick Radge ( in the day trade to be a Trader thread, I think)

 

[nioka]

The smiles mean he's ramping.

Long term stock for retirees? LOL

Anyone holding these and buying at tha right time HAS to be smiling.Watch them go from here. Take CER and VPG. Without this GFC I would not have held these in numbers well over 1 million. This GFC has been the best thing since sliced bread as far as I.m concerned. Just need to trade a few each week and it is as good as any super fund can pay out.

 

[nioka]

Thanks Nioka - will have a good look at these. The smiles suggest you are pleased...

Careful now, With some you may have missed the FAST boat and have to get the slow one. I bought most CER at under 5c, with over a million averaging under 8c. My average for VPG under 8c, LYC average under 20c, Even the old ADI are showing a profit in the books now.

There have been great bargains if the fundamentals were examined and the rule "avoid trying to catch a falling knife" was ignored. It has been a time to play "chase the lemmings". In over 50 years I have never seen it a better time to invest than it has been for the last 6 months. The value of the stocks I now hold is up over 400% over that period without adding any new capital and drawing out "living expenses" after a lot of the transactions.

 

[MrBurns]

Good thread, interesting to see what people bought and why.

 

[nioka]

The smiles mean he's ramping.

Long term stock for retirees? LOL

I'll expand on the pick of 5 and why they are long term.

CER. is trading well below its NTA even though the assets have been devalued. It is operating profitably and under its constitution must pay out profits to trust holders. The debt has been stabilised with no dilution and there is no immediate debt that has to be repaid. It is reaching/has reached a point where the funds are reinvesting in CER again. I anticipate annual dividends which will not be far below my average cost per unit shortly. That means a 100% PA dividend on the investment.Their assets are in good old bricks and mortar associated with successful shopping centres.

CNP. Similar story to CER. A little more risk than CER as far as share dilution under the terms reached with greedy banks for refinancing. They probably will not pay dividends for some time in an effort to reduce debt. Close to a 600% capital gain so far so dividends may not be an issue.

VPG. Similar story again. A large amoun of debt has been written off. BOS have made a debt for equity swap and a deal with McCabe has seen him reenter VPG as a shareholder and a place on the board. They have debt under control. They have an SPP at19c which will allow me to purchase 1 for 4 at 10c with the SP holding around 14c. Even though buying at 10c will increase my average price I will take up the offer. Once again bricks and mortar, always a sound investment.

LYC. Rare earths are rare and Lynas has lots of it. You will notice, if you chaeck the LYC threads, that I have been following them for a long time. You will also find a post near the peak price that I posted I was exiting to buy back closer to production. A lucky decision as I bought back around 8 times my original holding for less money. They will have ups and downs until refinancing is certain. In the meantime I expect a discounted SPP to increase my holding. They will complete the production facility and will be a great investment in the medium term.

BUL. BUL has large coal seam acreages in the right areas at the right time. They have two important partners that will help then devellop the project in the short term. Their SP has been held back by the uncertainty regarding the bank holdings that could be sold at any time. Once this issue is resolved and the gas starts to flow I expect them to fly in the same manner as others in the same field have done.

There are others I hold with similar stories but the thread was "5". It was hard not to place OZL and MCR as they are just as rewarding as some in the 5. Even some of the specs like TAS,EDE, TEY. GRK are ahead. EDE could be in the top 5 and I believe will be a ten bagger for me. They have moved from being a spec to being a company with accepted technology that is now being marketed.

Of course DYOR. The above is my thoughts on some stocks. I may be right or I may be wrong. However I'll keep up the smiles

I dont consider a post a ramp if there are facts to back up a statement and if anyone cares to research they should come to the same conclusions. If not then I'm happy to be corrected.(with facts not inuendo)

 

[Julia]

Anyone holding these and buying at tha right time HAS to be smiling.Watch them go from here. Take CER and VPG. Without this GFC I would not have held these in numbers well over 1 million. This GFC has been the best thing since sliced bread as far as I.m concerned. Just need to trade a few each week and it is as good as any super fund can pay out.

Thanks Nioka for interesting rationale on each of these.
My first reaction was, wow, these are high risk stocks, but you've obviously researched them and have done well by buying at the right time. Congratulations.

 

[nawshus]

Hi Muschu what made you choose IVC as a long term hold?

 

[Bill M]

Hi Muschu, half my portfolio is still in the big 4 banks. I was buying them madly during their lows and bought into every share purchase plan. They have doubled in price since hitting their lows, the dividends keep on coming in and I continue to hold. At these levels though my buying stopped a long time ago. I have also taken a position in Telstra recently as once again too much doom and gloom has been priced into the stock currently. The Telstra dividend is also very healthy. I also hold some hybrid stocks and convertible shares which were all purchased at under face value. I also put in for 2 lots of PERLS V, one in my name and one in my wife's. I think that interest rates will be going up soon and then that sector might take off too, good luck.

 

[Julia]

Hi Muschu what made you choose IVC as a long term hold?

If you know what their business is, I don't think you'd be asking that question!

Rick, they do have a fairly high level of debt. This doesn't worry you?

 

[whereu]

Depends, So-cynical..most of the stocks shown are up over 100% recently.

that can send them to the top overnight in a diversified portfolio.

At one point BEPPA was my No1 holding when it went up 250%.( sold it after a bad ann, and missed most of the profits)

My present top 12 are (held in SMSF)

CBA, BHP, STW, FLX, MTS, MCW, WOW, RIO, GXY, NCM, ANZ, CNX

cash 30%

I completely re-stuctured my holdings during GFC, selling all MINs and most stocks, and have been rebuilding my portfolio..some I sold and didnt re-buy am kicking myself, such as MQG.

hold about 20 others, under constant re-evaluation, many investors dont worry about dividends, including Warren Buffet, and much prefer ROE as being a better measure of investment potential.

I am of this view, although I do prefer some dividend and high franking credit for most of my portfolio.

see a good article by Nick Radge ( in the day trade to be a Trader thread, I think)

To answer your questions. My first objective when buying shares is to look for those that I think have the best potential for gains in the share price in the next 1 to 3 years. I don't exclude dividends. For example NCM is seventh on my list. I chose it on the assumption that NCM will hopefully increase gold production and hold costs. An increase in gold price will be a nice bonus!

What made me choose the one that are currently on top of my list?

Generally I try to find companies that have sufficient resources (money and people) to achieve objectives (I don't always make the right call). The following comments are about additional factors that played a part in my decision to buy.

AQP – I bought these on the assumption that platinum is a very scare precious metal, and that price increases will exceed the mining inflation rate. I understand that AQP has a reasonable reserve.
BDG – I looked for a local steel maker. My logic (or lack of logic) was that Australia exports iron ore. Why not add value locally to this product?
BUL – I looked for a CSG explorer that potentially has a nice resource base. I did have BOW shares but have since sold them, with the intention of buying them back at a lower price. I never did (too greedy!)
LNG – First cab out the rank in Australia for LNG (as far as I know). I nearly gave up on these a few times on a stop loss basis. So far I'm glad I didn't.
MEO – I liked the idea of MEO taking advantage of what appears to be a draw back. They have carbon dioxide in their methane gas reserves. They plan to make methanol from these two components. Smart, I thought!
IPL – I bought into the “world needs food and hence fertiliser” story, and the “Australia needs explosives for its mining industry” story. They have two irons in the fire!
These shares have done well for me, which largely explains their position at the top of my portfolio.

About 13.9% of my portfolio is worth less than I paid for the shares. Why did I buy them? The main culprits are (percentage of my portfolio in brackets)
MAK (3.19%) - A large resource, close to production. The world needs food and hence fertiliser.
CTO (3.19%) - should be ramping up production shortly
GDY (2.39%) - Sounded like a good, clean source of energy. I hope (shouldn't invest on hope, I suppose) they will overcome technical problems.
UXA (2.31%) - speculative (for me). Hope (there's that 4 letter word again) they find lots of uranium.

I do have speculative shares (UXA one of them?), in which I was less fussy on selection criteria.

Please make your own decisions on investments. My postings are NEVER recommendations.

 

[brianwh]

As others have said - a very interesting thread.

An observation. Quite a number of posters have indicated significant holdings of shares that I would put in the "risky" or speculative category (assuming that these are part of an SMSF). My own philosophy is to hold a dozen or so "blue chips" from the top 50 (and good dividends is a factor in choosing here) and around half that number small caps. I am fine with one, or perhaps two, small caps that are somewhat speculative (eg I hold TFC) but I would be unlikely to have more than 1% of my share portfolio in one of these.

As a retiree, totally dependent on my SMSF for my income, I need to have preservation of capital as a high priority. You don't need too many "dogs" to put this under pressure.

 

[Muschu]

Hi Rick - is this list the equities component of your SMSF? In my own case I have approx 40% of my SMSF in equities with the major holdings:

LIC's: AFI ARG MLT (1/3)

Direct Shares: ASX LEI ORG QBE SHL TAH TLS TOL WES WPL plus small holdings in NHC and TFC

As you can see - no banks (except in LIC's) which is thanks to taking advice from Intelligent Investor! and no property.

The questions exercising my mind at the moment:

1. I have been waiting for a pull-back in the banks which to this point in time has been a bad decision (nearly as bad as listening to Intelligent Investor!!) - should I resign myself to buying at market highs or accept a portfolio without them.
2. I am comfortable at the moment without property but there are signs that this sector is moving. What do others think?
3. I have an uneasy feeling about the market at the moment - should I lighten up on some stocks and get back into cash?

Would be very interested in the thoughts of others on these issues.

Hi
I was VERY averse about getting back into banks and thought I never would. However some of my reading and advice suggested that the banks lead us into the crisis and would lead us out.
The banks have certainly been profitable thes past months. But I suspect there will be limits to their growth potential.

I share your concern about property and tend to avoid such stocks. A part of me suspects this is a foundless concern.

Cash? Don't know to be honest. As of today [not a good ASX day] we are about 20% cash. This time I think [may be wrong] that we will ride out any downturn.

Best wishes

Rick