Robusta fundamental, leveraged investments

[VSntchr]

Are there any of you fundy guys that use a chart to finesse your executions a little?

Can - I have been reading some Radge stuff this week in an attempt to increase my skillset, however although I am a fundy at heart..I am sure you have seen me over in the pairs thread...which is pretty technical (or shall we say statistical) so my mind has been open for a little while, I have just lacked the skills.


Robusta, I saw that Clime just increased their stake in SMX, I have been adding some in this space (although not SMS) so hopefully its a sign the bottom is <12 months away as value investors are known for buying a bit early

 

[nomadic1970]

Are there any of you fundy guys that use a chart to finesse your executions a little?

Yes, but mainly to to see share price direction. I would rather see the price going up vs down. For example, FXL is one I am watching presently. I don't mind if I don't get it at the very bottom, but want to see some sort of turn-around but fundamentally good. Ditto for CCP.

 

[CanOz]

Great stuff guys, i can't see why an investor wouldn't look at a chart if they thought it might give them a better price at which to buy at...I reckon even Buffet would have guys on his staff that would tell him what good level would be to start accumulating stock based on more than just the fundamentals...Surely.

Even as Nomadic says, if its only just a change in trend, or a bottom in place...very handy...

 

[robusta]

Are there any of you fundy guys that use a chart to finesse your executions a little?

Not me. I have considered it but don't want to take any focus off the decision making process. Most of my purchases are companies that I want to own part of that have a falling share price for some reason. I amyet to be convinced that a chart will help with my entry points.

Very impressed with the discipline shown by Ves regarding an arbitrary day to make a buying decision. I often find myself looking at market depth and watching the general market movements to try to pick a cheaper entry point.

Robusta, I saw that Clime just increased their stake in SMX, I have been adding some in this space (although not SMS) so hopefully its a sign the bottom is <12 months away as value investors are known for buying a bit early

Would be good to see, SMX seems like a solid business and there are a few that are very beaten up in this sector... I am also looking forward to see what Clime are buying internationally and quietly cheering a hopefully temporary higher AUS$ while they deploy some capital overseas.

 

[robusta]

Yes, but mainly to to see share price direction. I would rather see the price going up vs down. For example, FXL is one I am watching presently. I don't mind if I don't get it at the very bottom, but want to see some sort of turn-around but fundamentally good. Ditto for CCP.

Yes I have a eye on both of these as well, I still regret selling CCP a bit over a year and a half ago for a small profit.

 

[TPI]

Hi robusta,

Great thread, documenting your thoughts and progress is a great way to learn.

One comment I wanted to make was that although your LOC funds invested have grown a lot over the last few years, your overall portfolio dollar value and cash flow position on this portfolio seems to me to still be relatively small in terms of its likelihood of making a meaningful impact on any lifestyle or retirement goals you may have.

Have you considered how else you can build up more capital to then deploy into the market in a more sizeable and impactful way?

 

[Ves]

V

[Ves - my edit removed text about FGE]

You recently purchased DTL, the market could easily take its price 50% below your purchase price in spite of nothing materially changing to the long term outlook of the business, this sort of drop occurred in 2008. Now is the time to be considering question 4 – not when the market is showing you the relevance of the question and trust me, one day it will.
“Can I hold this stock for as long as it takes” – It’s the implications of this question that need to be considered. Am I Psychologically prepeared to hold no matter what the market is saying. Do I have the financial position to hold no matter what. (Loss of employment, loans recalled, source of alternative available cash flow etc etc)

If you can’t stick to the investment discipline in the darkest of days and they will come, then you are better off recognising that now and putting in place a strategy that you can live with under worst case scenario’s, for most that will mean limiting drawdown’s through controlling market price risk.

Sorry Robusta to clog up your thread but I hope addressing the questions Oddson proposed has some relevance for you.

Post #161.

Interesting to re-read this in retrospect when it goes from theory to practice. Even more interesting to note your selection of company (DTL). Nice coincidence (--- if not can I borrow your crystal ball for a few weeks?)

 

[craft]

Post #161.

Interesting to re-read this in retrospect when it goes from theory to practice. Even more interesting to note your selection of company (DTL). Nice coincidence (--- if not can I borrow your crystal ball for a few weeks?)

Nice? You’re referring to it as nice; obviously you have passed your practical with flying colours.

More a certainty then a coincidence – holding over an IT investment cycle was always going to spook the market.

To add to this cycle we have the fear of cloud destroying their offering – Bet there was a corresponding scare when computers were taking over from type writers and many other times since.

In 1984, Data#3 was born out of two Queensland-based firms – Powell, Clark and Associates and Albrand Typewriters & Office Machines Pty Ltd. Albrand Typewriters and Office Machines, an IBM Typewriter dealer with two Brisbane locations in Aspley and the CBD, contributed to Data#3 an excellent reputation and a wealth of experience in provision of quality office equipment, materials and supplies Data#3 staff in the mid eighties from the most respected, reliable and progressive suppliers.

 

[Ves]

Nice? You’re referring to it as nice; obviously you have passed your practical with flying colours.

My three biggest positions (by cost) are DTL, UGL and CAB (although CAB is under 10% down, break even with divs). I've taken a bit of a bath in relative terms in that order. They're my only three underwater positions.

Performance wise, they have cost the portfolio 10% or so. Respectively they are 12.7%, 10.7% and 12.1% of the portfolio on terms of cost.

Interesting reading. If you look at them in isolation, it may seem the end of the world, but in totality, the team is going OK. About 7% above the S&P ASX 200 accumulation index since inception (despite perhaps being too aggressive at times).

 

[robusta]

Well its been a while I haven't updated this portfolio since early March, life has been busy...

Portfolio Update

The portfolio started on the 20th of July 2011 with a $30,000 line of credit and no cash, $40.00 a week was initially deposited building up to the current $75.00 a week that is currently being transferred. It still surprises that in such a short time this now adds up to $8850.00. The debt on the line of credit is now $27,673.74 and at the close of trading today the portfolio has a market value of $54,446.49 so if liquidated right now with no brokerage there would be $26,772.75 of equity.

Here are the investments held.

CAM - Clime Capital Limited

Bought 1456 @ $1.03 = $1519.63 on 26/3/14, now trading at $0.965 ($1405.04) a loss of -6.31%. This small position should grow through the DRP and the nice conservative value investing strategy. If I can stay the corse this one should pay my utilities in retirement through the quarterly distributions.

CAMO - Clime Capital Options issued 9/4/14 at N/C, exercise price $1.04, expire 20/10/15 now trading at $0.015 ($21.84)


EZL - Euroz Securities.

Bought, 1412x EZL @ $1.055 = $1509.61 on 17/07/12, now trading at $1.40 ($1976.80) a gain of 30.95% Revenues, dividends and NPAT are up, the management and majority shareholders running this business know a whole lot more about the resource and energy sectors than I ever will and they have a good history of share holder friendly capital allocation.

HHL - Hunter Hall International

Bought; 1182 xHHL @ $2.85 = $3388.65 on 23/11/12, 717 xHHL @ $2.83 = $2049.06 on 11/03/13, and 638 xHHL @ $2.35 = $1519.25 on 30/05/13 for a grand total of 2357 shares for $6956.96, now with a market value of $5075 a loss of -27.07%

ICQ - Icar Asia Limited

Bought 1220 @ $1.23 = $1520.55 on 9/04/14, now trading at $1.635 ($1994.70) a gain of 32.93%

Once again like my other related holding IPP there is not a lot as far as valuation metrics going for this business. They do seem to have first mover advantage and it would be nice if they could emulate major shareholder CRZ over the next ten years...IMF - Bantham IMF limited

Bought; Bought 819 IMF @ $1.83 = 1518.72 on 3/10/2013, Bought 877 @ $1.71 = $1519.62 16/12/13 and Bought 870 @ $1.72 = $1516.35 on 05/02/2014 for a grand total of 2566 shares for $4554.69 now with a market value of $5067.85 a gain of 11.27%


IPP - Iproperty Group

Bought; 1660 x IPP @ $0.915 = $1538.85 on 14/11/12 and 1910 x IPP @ $0.785 = $1519.30 on 22/04/13 for a total of 3570 shares for $3058.15 now with a market value of $11888.10 a gain of 288.74%


MTU - M2 Group

Bought, 649 x MTU @ $2.62 = $1711.99 08/08/11, now with a market value of $3762.00 a gain of 126.61%



NVT - Navitas Limited

Bought; 1023 x NVT @ $2.93 = $3017.34 on 02/02/12 and Bought 266 @ $5.63 = $1517.53 on 30/10/13, now with a market value of $9074.56 a gain of 100.13%


SRX - Sirtex Medical Limited

Bought, 150 x SRX @ $9.74 = $1480.95 on 24/04/13, now with a market value of $2860.50 a gain of 93.15%

This small investment is now 4.65% of the portfolio, a long history of growth is about to reach a crossroads with results of major clinical trials due for release early next year. The expected results should be either a large multi-bagger or a small loss in the future.

TGA - Thorn Group

Bought, 972 x TGA @ $1.505 =$1482.81 on 05/04/12, 1074 x TGA @$1.395 =$1518.18 on 26/04/12, 867 x TGA @ $1.745 = $1532.87 on 20/11/12 and Bought 762 @ $1.97 = $1521.09 on 07/02/14 for a grand total of 3675 shares for $6054.95, now with a market value of $8121.75 a gain of 34.13%


UOS - United Overseas Australia

Bought; Bought 2634 @ $0.535 = $1429.14 on 13/2/14 and 3460 x UOS @ $0.52 = $1819.15 on 26/2/14, currently trading at $3199.35 a loss of -0.9%

 

[Klogg]

Well its been a while I haven't updated this portfolio since early March, life has been busy...

Portfolio Update

The portfolio started on the 20th of July 2011 with a $30,000 line of credit and no cash, $40.00 a week was initially deposited building up to the current $75.00 a week that is currently being transferred. It still surprises that in such a short time this now adds up to $8850.00. The debt on the line of credit is now $27,673.74 and at the close of trading today the portfolio has a market value of $54,446.49 so if liquidated right now with no brokerage there would be $26,772.75 of equity.

Congrats robusta, that's a nice record you've got for yourself. And even nicer that you've done it for all to see, removing all doubt.


Interest fact on UOS (I own) - I was looking at the "10 year return vs sector" graph in ComSec and found UOS has average a shareholder return of 35% per annum over a 10 year period (approximately)... In absolute terms, $10k invest in late '04 would be worth $160k today (dividends reinvested), according to the feature on Comsec that is.

See here:



I find that amusing, given it's trading below NTA/book value...

 

[robusta]

Thanks Klogg but I think there are a few posters on this forum with a better longer record...

I agree crazy regarding UOS, I looked at it for ages and thought it was way too risky: If I remember correctly you provided some research that helped me look at this business in a new light - thank you.

 

[McLovin]

Congrats robusta, that's a nice record you've got for yourself. And even nicer that you've done it for all to see, removing all doubt.

+1

Just putting stuff on here changes the psychology of the investment. It's a lot harder when you have people telling you you're wrong (refer to the early part of this thread). Well done Robo.

 

[robusta]

Investment Increased

NVT- Navitas

Bought 409@ $4.88 = $2015.87

NVT have announced Macquarie Uni will not renew contract and the price has fallen from $7.00 +. Time will tell how this works out.

Days like this are the reason I love the stock market, yesterday I had a bit over $26,500 in equity, today a touch over $23,500 and now I'm fully invested as well. Anyway lucky it's reporting season, those dividends will help to rebuild the kitty for the next opportunity.

 

[robusta]

Investment Increased

Nothing exciting like NVT just the first of hopefully many CAM DRP's

17 shares @ $0.96446 =$16.40

I have to admit it's small potatoes now but looking forward to watching this one compound quarter by quarter.

 

[GG999]

I'm wondering what your approach will be to stocks like NVT and MTU in the future.

Is it best to decide that they were good choices and that you will hold on to those stocks indefinitely as long as nothing significantly changes with the companies. You will be prepared for big losses (on paper) where people will be saying that you should have taken profits. Instead you will be happy with increasing dividends and eventually a much higher stock price many years in the future. And you would avoid transaction costs and paying tax on the capital gains thus meaning that you can keep more funds invested.

Or do you keep monitoring some sort of 'intrinsic value' and sell stocks where you think the price has gone up too much. Then move into a different stock that you estimate is better value at the time, only moving back to e.g NVT or MTU if they again appear to be good value.

 

[robusta]

I'm wondering what your approach will be to stocks like NVT and MTU in the future.

Is it best to decide that they were good choices and that you will hold on to those stocks indefinitely as long as nothing significantly changes with the companies. You will be prepared for big losses (on paper) where people will be saying that you should have taken profits. Instead you will be happy with increasing dividends and eventually a much higher stock price many years in the future. And you would avoid transaction costs and paying tax on the capital gains thus meaning that you can keep more funds invested.

Or do you keep monitoring some sort of 'intrinsic value' and sell stocks where you think the price has gone up too much. Then move into a different stock that you estimate is better value at the time, only moving back to e.g NVT or MTU if they again appear to be good value.

Sorry for the slow reply, I haven't been been on ASF much lately.

I would have to say with stocks like NVT and MTU the intention is to buy and hold but I would't rule out taking profits if the price gets too far ahead of "fair value". I'm not a fan of moving in and out of stocks as I've discovered I'm not a good trader.

Take NVT as an example the all time high of $7.88 was probably overvalued but I think in the long term that price will be surpassed. I took profits on MTU over a year ago around the $6.50 mark and still regret that decision.

Anyway onto something else I hope to hold for the long term.

New Investment

VED- Veda Group Limited

Bought 725 shares @$2.20 =$1614.95 21/10/14

Been over three months since my last trade and have had an eye of VED for a long time. While the price is not a screaming buy I reckon this one has some sort of competitive advantage and some decent growth prospects.

 

[robusta]

Been a while again since my last post or trade for that matter anyway first a bit of housekeeping.

Investment Increased

CAM- Clime Capital

18 shares @ $0.954769 23/10/14 (DRP)

Now the real reason for this post.

Investment Reduced

Thorn Group
Sold 867 shares @ $2.955 = $2542.04 1/12/14

Below is my trading history with TGA

TGA - Thorn Group

Bought;
972 x TGA @ $1.505 =$1482.81 on 05/04/12
1074 x TGA @$1.395 =$1518.18 on 26/04/12
867 x TGA @ $1.745 = $1532.87 on 20/11/12
762 @ $1.97 = $1521.09 on 07/02/14
for a grand total of 3675 shares for $6054.95

I really like this company and hope to not regret this sale like when I took profits in MTU but the fact remains the share price has had a good run and probably gotten a bit ahead of the value of the business.
There seems to be some good prices being thrown up by the market at the moment in businesses that I want to have a piece of, VED for example is back in my buy zone and NVT is also looking enticing.

Out of sheer laziness I've sold the smallest entire parcel that will minimise CGT.

 

[robusta]

Thanks to my good friend copy and paste below is what the portfolio looks like tonight, 1/12/14



Code Qty Cost Basis Date Acquired Last Price Change ($) Gain/Loss ($) Market Value
CAM 1,491 AUD 1.030 26/03/2014 0.940 -0.005 -134.48 1,401.54
CAMO1,456 AUD 0.000 17/04/2014 0.002 0.000 2.91
EZL 1,412 AUD 1.069 17/07/2012 1.055 -0.010 -19.95 1,489.66
HHL 2,537 AUD 2.742 23/11/2012 1.870 0.100 -2,212.77 4,744.19
ICQ 1,220 AUD 1.230 09/04/2014 1.030 0.005 -244.00 1,256.60
IMF 2,566 AUD 1.775 03/10/2013 2.180 -0.020 1,039.19 5,593.88
IPP 3,570 AUD 0.857 14/11/2012 2.460 -0.060 5,724.05 8,782.20
MTU 627 AUD 2.648 08/08/2011 8.230 -0.080 3,500.11 5,160.21
NVT 1,698 AUD 3.846 02/02/2012 4.920 -0.110 1,823.82 8,354.16
SRX 150 AUD 9.873 24/04/2013 26.000 -0.590 2,419.05 3,900.00
TGA 2,808 AUD 1.685 05/04/2012 2.930 -0.020 3,495.13 8,227.44
UOS 6,094 AUD 0.530 13/02/2014 0.450 0.000 -486.04 2,742.30
VED 725 AUD 2.200 21/10/2014 2.190 -0.100 -7.25 1,587.75
$14899.77 $53242.84

 

[Anglers Rest]

Thank you for posting consistently over the last several years here robusta. It's valuable to see things mapped out in real time. As someone who is just starting out - Dec 16 will be one year of investing direct in the ASX for me. Your thread is a useful place to learn and I haven't fully digested it either! We have come to some different conclusions on the value of a stop loss and averaging down however! Jessie Livermore's idea of not fighting the market holds a lot of weight for me, but perhaps it's that I'm not comfortable with short term volatility (or losing capital over the long term). I agree however picking the tops and bottoms is futile. I enjoyed Nick Radge's book Adaptive Analysis for Risk Management.
Consider a list of "A1" stocks from Montgomery in 2010 - if an investor followed the buy and hold approach they would have a 13.83% pa return vs a per holding stop loss set at 8% would lead to a return of 17.08% pa - excluding dividends along the way. I know there are a lot of assumptions here (was there a MOS at the time of purchase for all these stocks, that RM's 'picks' are worth buying, that prospects and therefore valuations didn't change) but it is food for thought. I use RM's stocks only because we both follow a similar valuation methodology based on his book and that several of yours and his investments are similar (not all!).

Thanks again, it's really an enlightening and refreshing read to see a journal from a value investor!