Why do you need more time.
The XAO has risen 30% in the last 12 mths.
What's your nett on $ invested?
By doing the same thing week after week what are you expecting to happen.
Are there aspects you think you should consider.
Are you happy just to leave it as it is?
The portfolio has only been going for 22 months. This has been a very volatile period for the markets, considering this I think we need a longer period to get a more accurate picture of this investment strategy.
Robusta, love your work to date and think its great you post all your trades/investments.
However, I invest in a very similar fashion (without leverage) and to be honest, make a LOT less transactions than you. And by all accounts, value investing is all about biding your time, waiting for value to come along.
Not sure if you're using this style of investment, but if you are, I would suggest thinking through your choices of companies a lot more, perhaps be a little more picky.
Nevertheless, I still enjoy your posts - thanks again.
Robusta, love your work to date and think its great you post all your trades/investments.
However, I invest in a very similar fashion (without leverage) and to be honest, make a LOT less transactions than you. And by all accounts, value investing is all about biding your time, waiting for value to come along.
Not sure if you're using this style of investment, but if you are, I would suggest thinking through your choices of companies a lot more, perhaps be a little more picky.
Nevertheless, I still enjoy your posts - thanks again.
Robusta has some great stocks – they must be cause I have 5 of them.
I think we are seeing the level of activity drop as the level of self edumaction grows and stock selection for the long haul becomes more suited.
Those high earning volatility stocks when things are going right for them and are being marked up by the market are very seductive . This caused a bit of activity early on but I suspect that may now be in the past.
The volatility of returns should not be a problem to me psychologically, I think my challenge will be to adopt a more conservative stance during a extended bull market. I seem to like to be fully invested, this will hinder my ability to take advantage of future opportunities during bear markets.Next test will come when we get a decent decline. The margin loan is not going to help psychologically from a volatility of return perspective. (Long term holding is already subject to large drawdown even without leverage)
But the biggest risk question is can you avoid a forced liquidation if you say lose your job at the most inconvenient time?
Great thread and great attitude. Despite its success, long term investing is not easy to implement let alone doing it live on a forum.
Robusta
In my view you should value your portfolio on it's current
Liquidated value.
That's what it's worth at any particular time.
You can close out all positions with a phone call.
Open positions should be included.
I think the margin loan is not a bad play if you are investing in high yielding blue chip stocks like the banks and of course in retrospect that would have been a great play if you had.
I am not so sure it is well suited for fundamental investors as you sometimes need to ride out the storm where stock prices may even half before they eventually come good.
The stock market rise in general is an interesting one because it is heavily skewed towards high yielding safe stocks and very sector centred.
Many small caps and mid caps have missed out and resource related stocks have not done well at all with many accelerating backwards.
... I am kicking myself on a few stocks ...
I think you probably could have done better if you had held on to your convictions on quite a few stocks instead of exiting early.
You sometimes have to very patient if you want to be successful as a fundamental investor.
I know I am kicking myself on a few stocks that I got rid off because I thought they weren't performing well enough and they weren't actually moving yet I spend a lot of time researching them and thought they were well undervalued at the time.
MMS springs to mind that I sold at around 7 dollars and CCV at 50c and CCP at 4.00, and ANZ at 22 dollars.
New Investment
DTL- Data#3 Limited
1912 x DTL @ $1.045 $1998.04
I have been looking to pick up some DTL for a while now, probably have Wayne Swans horror budget to thank for the opportunity.
High ROE, good dividend yield, nice history of growth.
Take a look at the DTL thread, this is a interesting stock IMO.
Investment Increased
Bought 2089 X DTL @ $0.92 = $1921.88
This is basically what I pulled out of CKF, I think the capital has found a better home. In a few years people will be wondering how I managed to pick up DTL under $1.00
I normally only look at charts about once a year and this is another one that reinforces my decision not to use stop losses. .
The debt attached to this portfolio is a line of credit not a margin loan, so as long as the interest payments are serviced there will be no margin call from the bank.
The hunt for yield and subsequent rise in the prices of blue chip stocks like the banks and Telstra has surprised me, you are right it would have been a great strategy to buy these with leverage a year ago. It would not surprise me to see these stocks go through a long period of under performance into the future.
Many fundamental investors warn against the the use of leverage including Warren Buffett, when you look at his career however he has used cheap leverage on conservative investments throughout via the float from the insurance businesses.
http://www.forbes.com/sites/timwors...t-of-warren-buffetts-success-double-leverage/
I'm with you on this for sure and think it is often misunderstood part of Uncle Warren's success. The key lesson for me is to leverage as much as you possibly can provided you can do it intelligently (a big if).
That is what he did but not by the traditional path of borrowing from a bank. He leveraged off of other people's money by getting them to pay him to hold it (as an investment manager). (Somewhere in the Buffett partnership letters WB notes the very impressive ~40% return for the year and continues with "and some wag said it must have been a very good year for me").
Then in Berkshire Hathaway he found another way to leverage by taking advantage of the insurance business model where they are paid for holding other people's money (the float).
Not sure where line of credit on the house would fall into this but while you are ahead it is looking pretty good!
The portfolio update above shows the nuts and bolts of the investments so far but I thought I should pull out some important figures and have a bit of a look at some percentages...
The line of credit has $29,129.48 drawn from it and I have put $4400.00 of my own cash in, the realized loss from the closed positions is $3792.80, when looking at the open positions however I have made a paper gain of $7694.65 and have $12036.34 in equity in the portfolio. (as at before the market open 13/5)
If we look at the return on the total capital invested ( $29,129.48 + $4400.00) there is a realized loss of -11.31% but a paper profit of 22.77%.
If we look only on the capital I have contributed ($4400.00) then we have a realized loss of -86.2% and a paper profit of 173.55%
The portfolio has only been going for 22 months. This has been a very volatile period for the markets, considering this I think we need a longer period to get a more accurate picture of this investment strategy.
I've had similar experiences with a few companies like that recently. I've so far been relentless in my initial judgment. Easier said than done sometimes - in your case it is just over 2%. Mine have been more like 5-10% so I wouldn't beat yourself up too much over it.For ages I have been banging on on about Cochlear and how I would become interested in buying more if the price got closer to $55.00 the price got close but not close enough and every time I regretted not adding to my position until today... Anyway the price fell around 14% this morning....
I've had similar experiences with a few companies like that recently. I've so far been relentless in my initial judgment. Easier said than done sometimes - in your case it is just over 2%. Mine have been more like 5-10% so I wouldn't beat yourself up too much over it.
If COH is the right company at close to the right price (ie. 2% off what you thought) it will still pay off in the long run. The bold part is more important when we are talking about long-term rounding adjustments.
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