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Small Cap Investing 12 Month Portfolio High Return

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Hi Bear

Thanks for putting in the time and effort.
Some seriously excellent results for your
portfolios.

Congrats.
 
investtrader said:
Mr. Bear,
Thanks for the detail. Okay, so you calculate a DCF valuation for all stocks in your universe? How do you estimate earnings for AXL for example?
Which screener? Thanks.
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Correct, I don’t estimate the earnings myself, I collate the information from various sources, I do however use my own terminal growth rates and growth rates for earnings from year 4 onwards until the terminal rate kicks in. I admittedly have access to information the average person doesn’t. The screener is Reuters Eikon product.

My secret as you have alluded to is how I construct the DCF model, everything else I’m happy to share.
 
Mr Bear said:
How much liquidity are you looking for? some of these are admittedly small but paying extra when the returns are so high isn’t much of an issue.. or is your primary concern exiting? I usually get filled without moving the market much at all and my portfolio is over 200k.
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I don't like to go below 10 day MA vol x close/5 > $100,000
It means I can pyramid in (if it moves) without worry and I can always get out without worry. Yes it's the exits I am most concerned about.

But that is just me. There are so many ways to trade.
 
tech/a said:
Hi Bear

Thanks for putting in the time and effort.
Some seriously excellent results for your
portfolios.

Congrats.
Click to expand...
Thanks Tech, I’ve been watching your recent thread, haven’t had enough time to read through it properly yet, completely different method of trading but one I have been interested in for a long time.. will share some thoughts when I get around to it..
 
bngood said:
I don't like to go below 10 day MA vol x close/5 > $100,000
It means I can pyramid in (if it moves) without worry and I can always get out without worry. Yes it's the exits I am most concerned about.

But that is just me. There are so many ways to trade.
Click to expand...
I haven’t spent as much time as I should on analysing liquidity and therefore spreads in my trading, what I do know is I don’t pay much relative to my returns, there is also a trade off, I know from researching these smaller names the less liquidity also results in larger returns so you still get paid off in a way.

As I have mentioned I trade every second month 5 times a year, soon this will need to be monthly, this allows me to enter/exit without moving price much.
 
investtrader said:
Guessing you work for an insto. then.
What earnings did you use for AXL? Last question, I think.
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Company guidance for FY18 is 7m, I’m expecting EPS of 0.132.

Then FY19 0.18 and FY20 0.30

This means they currently trade on 7x 2020 estimated EPS.
 
Mr Bear said:
I haven’t spent as much time as I should on analysing liquidity and therefore spreads in my trading, what I do know is I don’t pay much relative to my returns, there is also a trade off, I know from researching these smaller names the less liquidity also results in larger returns so you still get paid off in a way.

As I have mentioned I trade every second month 5 times a year, soon this will need to be monthly, this allows me to enter/exit without moving price much.
Click to expand...

What you are doing is getting excellent results and you definitely don't overtrade. :)
Stick with it. I watch with interest.
 
Mr Bear
Thanks for an excellent series of postings. I found this thread ironically searching for AXL postings.
Very good work and please keep it up.
Now I have registered on your thread.
Regards
 
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