odds-on,
What you've described in point 2 is essentially what i'm aiming to achieve only with some slight variations. I'll probably vary my position size also based on company quality, so allocate more to high quality highly undervalued companies and less to the low quality and regularly underavlued companies - note low quality does not mean B&B or ABC Learning, low quality means relative to my mechanical filters etc.
I'm also planning on allocating slightly more to smaller companies simply on the basis of higher risk / higher reward that I may be able to capture some additional returns on a 1-2 year basis.w
I also have the same goals as you, securing some form of reasonable dividend while I wait for the fair value to be realised on a 1-2 year basis without chasing multi-baggers etc. Investing on a 1-2 year basis also means i achieve capital gains discount, and i can make sound investing decisions without contributing huge amounts of time to portfolio management and monitoring. I also believe a 1-2 year value investing style is optimal for me as forecasting earnings or economic events beyond 1-2 years is a mugs game and there is plenty of evidence that even majority of 'leading' economists in this country get it wrong on a regular basis, and quite often by a large margin.
While skc's approach is different in some ways and probably more like your weeks/months option odds-on you can see how successful he was simply buying undervalued companies with sound reasoning and a future catalyst which was likely to positively impact the share price.
The shift that affects results is investors changing "strategy" every six months - defensive income, agressive growth, blah blah blah. Pointless. Stick to a plan.
Could not agree more, constantly monitor and refine your strategy but give it a chance to work.
Would have probably liked a larger position size but as I have $5000 sitting in the QBE spp, will probably get 16 shares unless they scale me back more for applying with my SMSF as well.
Robusta.
Your effort here has been excellent.
One I have followed.
I have seen a few efforts to trade Fundamentals and technicals profitably
All fun dies have ended in failure
I've seen many suceed in technical analysis.
The difference is that it's quantifiable.---technically.
I'm interested in what you think needs to be refined to improve a" plan?"
I have found that discretionary technical trading has similar results to value investing.
I've not seen discretionary trading traded profitably overtime.
I know you can as I do trade in a discretionary manner and profitable.
Again just making a statement that you need to keep refining your ideas walking forward is to me trading blind.
Surely if your putting your hard earned up to market RISK you'd want to KNOW
The way you trade is going to e long term profitable ---- not a work in progress!
Yep fantastic, and paying interest on $5000 for a few weeks while CPU stuff around and I would have sold my parcel weeks ago probably closer to $14.50
I'm holding onto QBE, they've turned the corner (not that I think they're going to $20 in a hurry).
They have taken their sweet time with this SPP.
Not sure if you look at international shares but have you had a look at Fairfax Financial, listed on the TSX, these guys have improving margins AND a fantastic record of good investment returns.
Cheers but I think you flatter me, there have been too many mistakes for me to get a pass IMO - so far
Sorry can't agree with that, I could name at least five on ASF that I think are successful and a much larger group of value fund managers.
This is going to sound a bit vague but constant learning and a bit of tinkering around the edges.
For example my first investment in MCE was predicated on the growth from the recent past continuing in a almost straight line - big mistake in a cyclical business, but at another price the volatility may be worth paying for.
QBE is another example, when I bought I liked the prospect of growing margins but on further research decided I did not like the expected returns from the float in the bond market.
I guess the plan stays basically the same but as I learn more about different businesses I am looking to buy better quality and/or at cheaper prices.
Maybe I have had a few too many beers, not sure I get your point, actually to tell the truth I don't know what discretionary technical trading is.
The difference IMO is this is not a mechanical system, and there are not many clear right or wrong entry or exit points, just a lifelong learning experience.
There is no way I will ever KNOW I have made the correct investment when I purchase part of a business but if I get more right than wrong (along with good position sizing) good results should follow.
Well I've been here a little while and not found 1
Fund managers I'm not interested in
I'm interested in what is achievable for Joe Average.
Unfortunately I think your whole life will be filled with tinkering and learning!
When do you know you've made a right decision?
When do you know you've made a wrong decision.
When do you know you've been right long enough
When do you know you've been wrong long enough.
When do you know you should have more capital on the trade.
...
Sorry Robusta for posting this on your thread but it is in response to the discussion of the last few days on this thread.
craft, your first 2-3 paragraphs are almost identical to the research I have infront of me at the moment. Essentially there is a value and small cap return premium available in the market but to receive it you have to weight entirely to these two areas of the market across a number of stocks which would be very capital intensive and require many hours per week to administer.
For those interest the following are the returns quoted by the research for given periods based on value or small cap weightings.
Australian Stocks - 1980-2010
Australian Value Index - 20.40% annual return
S&P 500 Index - 14.43% annual return
Australian Growth Index - 10.71% annual return
US Large Cap - 1927-2010
US Large Value - 14.03%
S&P 500 Index - 11.88%
US Large Growth - 11.35%
US Small Cap - 1927-2010
US Small Value - 19.17%
US Small Growth - 13.95%
Emerging Markets 1989-2010
Emerging Value - 25.01%
Emerging market Index - 19.46%
Emerging Growth - 17.05%
Now obviously this depends on their metrics of 'value' and 'small' which are not on the slide. Essentially Large-Small is based on market cap and Value-Growth is based on Book to Market according to whats written in the other slides. PM me if your interested in the article that supports the above.
I'm basically mixing and matching a lot of what people have talked about on here and tweaking as I go along much like robusta.
I'm taking a semi-mechanical approach although I think my metrics may be a little too strict. From these stocks I rate them based on value and start researching, if there is something I come across that I think warrants an investments based on quality, value and potential for that value to increase then i'll make an investment. My position size is then based on the quality, the value and the size of the company.
That is essentially the extremely basic version of what i'm planning to work through. Still nutting a few things out but once i've got it all nailed down i'll probably start posting my portfolio much like robusta has. Boy has this thread gone off on some tangent's but I think everyone will agree the discussion has been very insightful.
No one has portfolio returning a long term profit.
Essentially tech/a the figures I posted means that even if your picking the middle of the pack or possibly even the worst of the 'value' stocks your still going to beat the middle of the pack or worst of regular or particularly growth stocks. (From memory the standard deviations were all pretty similar).
We use cookies and similar technologies for the following purposes:
Do you accept cookies and these technologies?
We use cookies and similar technologies for the following purposes:
Do you accept cookies and these technologies?