Speculative Stock Portfolio

Karoon Energy Ltd (KAR) was sold this morning. It's a cash box but don't know when that value will be realised so rather than waiting forever I decided to put some of that money to better use with other investments.

Bought Aveo Grp (AOG) which is another healthcare operator in the Aged Care industry, similar to one of my holdings EHE in the Medium/Longer Term Stock Portfolio. However I have followed AOG over the years as well and since it has been in some -ve press which caused the share price do drag lower and lower. But offers 3.6% dividend yield and price may have hit bottom. Don't know if it has any further downside due to ghosts from the past, so that's why it's bought as a speculative play in this portfolio.


Open Portfolio:


Closed:

Rather than recovering Aurelia Metals Ltd (AMI) is making lows so exited the position today. Perhaps all the time and effort going into researching stocks can only take me so far. I like looking under the hood to see what a business is like before buying and despite the poor track record on this portfolio I have become better and better at recognising good businesses from the duds having spent countless hours doing stock research. When there is forces outside of my control such as with company management and change of sentiment, unfortunately I also have to exit the stock despite having good business fundamentals.

The reason why this portfolio is not well populated is because I missed most of the latest rally since January as I have been putting all my business researching skills into building my own business. I can get far better returns if I put the same effort that I put into researching publicly listed companies into building and running my own company. I am in control and I can see what I need to do to improve my sales, reduce costs and therefore improve margins. I also know how to make use of existing resources within the business, for example if my business was shaping to be like a "cash box" I know how to put that into immediate and effective use to grow existing product lines or to try out new exciting products that could grow my business. With the stock market, I am at it's mercy which is why I have to exit good businesses like AMI and the 'cash box' oil/gas explorer KAR.

I was looking for a way to start my own business with low startup capital since I don't want to put all of my savings into it or to liquidate both of my share portfolios to fund it. I came across a similar business model last year but it was more American based and the dude running the course was asking thousands of dollars up front. So I was reluctant to join. This year I came across similar opportunity and it was based on the Australian market and the mentor is an Aussie. The big 'green button' for me to go ahead was it was a pay as you go / cancel anytime course which was a low startup cost for me which means both of my stock portfolios are untouched and mostly full of cash at the moment. I don't normally recommend anything unless I am doing it myself and this is an early bird opportunity in the Aussie market so there's plenty to go around. If anyone is interested about what sort of business I am running, you can check out the training on the link below. It's starting to work for me, but as always DYOR...

http://tinyurl.com/amazon4aussies

Closed today:

Inghams Group Ltd (ING) added to this portfolio as mentioned in the ING thread. Although I look at as a possible longer-term dividend payer, the stock is highly volatile so I will monitor it's price behaviour in this portfolio.

With market breaking the 6500 barrier led by the massive rally in banking stocks, I decided to add a few more positions to this portfolio, especially stocks that have been hammered and presenting excellent dividend yields:



CSR dividend coming up on the 30th of this month, so hope to be holding then...

Open Portfolio:

With a big down day in Oil, I sold my Woodside Petroleum Limited (WPL) position. WPL chart itself looks OK but I was just being cautious due to oil chart:



Closed Positions:

aus_trader said:

With a big down day in Oil, I sold my Woodside Petroleum Limited (WPL) position. WPL chart itself looks OK but I was just being cautious due to oil chart:

View attachment 94926

Closed Positions:
View attachment 94927

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Hi aus_trader ,
looking at your table and wondering what is the difference between your P/l and total P/l ? did notice the div in one stock
should total P/L be running tally?
I guess seeing all that red i would be curious to see if your in front.
the other usual stats would be interesting too.

Also after looking at a trade you took in AMI on 11SEP -18 i could understand your entry but not your exit?
Also i noticed the chart doesn't take into account the commision drag.

willoneau said:

Hi aus_trader ,
looking at your table and wondering what is the difference between your P/l and total P/l ? did notice the div in one stock
should total P/L be running tally?

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Hi willoneau, the P/L is just the Sell price - Buy price multiplied by the number of shares i.e capital gain/loss only. The Total P/L is capital gain/loss + any dividends received. Since this is a speculative portfolio there is very few dividends received.

By the way I am looking forward to including more dividend paying stocks in this portfolio going forward. This portfolio has been a good learning experience for me and I find the ultra-speculative end of the spectrum is not easy for stock picking in. I will still research the penny stocks but reasons have to be so compelling that it might be 1 stock that I pick after researching 20 to 50 stocks. Even if there are no candidates after doing back-breaking (sitting down for hours is not good for the back ) research for 100 penny stocks, that's fine I don't want to buy something just to justify my time and effort.

willoneau sounds like Will O'Neal, just a thought.

What software are you using to search?
I understand how you get the results, what is total profit or loss after your commission after all those trades?
I use amibroker with a simple breakout search to find stocks that i might trade in.
Are you searching technically or fundamentally?

willoneau said:

Also after looking at a trade you took in AMI on 11SEP -18 i could understand your entry but not your exit?
Also i noticed the chart doesn't take into account the commision drag.

Click to expand...

AMI was exited because it was tanking and I wanted to minimise further losses.

I do have commissions on each of the trades but do not record it for this portfolio. All I am interested in is the % profit and not the $ amount. All I want achieve is a +ve % return and I am happy to continue this portfolio and slowly increase the position sizing. If I look at the $ amounts after brokerage it will show a very low profit or a -ve profit. But for me that doesn't matter as I want to see there is an edge if I traded $10,000+ per position for the same entries and exits because then brokerage will be insignificant. For your info, brokerage varies from $9.95 to ~$13 depending how frequently I trade due to tiers based on trading frequency offered. It is all accounted for during tax time.

willoneau said:

What software are you using to search?
I understand how you get the results, what is total profit or loss after your commission after all those trades?
I use amibroker with a simple breakout search to find stocks that i might trade in.
Are you searching technically or fundamentally?

Click to expand...

I search stocks fundamentally first. I may search based on P/E, Dividend Yield and if the company has Debt then Interest Cover etc. For the small end of the market these don't really come into play since the penny stocks are usually yet to make a profit so no P/E's or Dividends. I also check the chart before buying anything.

I took $20 out of every P/L to come up with a total P/L for you, although it is not 100% accurate as my brokerage varies as I mentioned before. Anyway the net result is still +ve number which is good. It came to:

I use commsec which is $10 each way (under $1000) and $20 conditional orders

willoneau said:

I use commsec which is $10 each way (under $1000) and $20 conditional orders

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My portfolio is with CMC markets with variable brokerage as stated above.

aus_trader said:

AMI was exited because it was tanking and I wanted to minimise further losses.

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Good to see you joined the "angry birds" I believe you called them. AMI hasn't got any better.

Quick summery of your chart,
total trades=52
wins=17
losses=35
win%=33
av win236.78
av loss=74.82
av return per trade=27.12
payoff ratio=3.16
expectancy=0.36
profit=$1497.7 gross
commision ($10 each way )=1040
net profit= $457.7

Great win / loss ratio but commision drag kills.

Zaxon said:

Good to see you joined the "angry birds" I believe you called them. AMI hasn't got any better.
View attachment 94948

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Yes, I realise that sentiment takes time to change and I like to be agile in this portfolio and not wait and hope for stocks to turn around. willoneau has kindly done analysis of this portfolio and it has a +ve expectancy so despite the long losing streaks (painful) it has shown to make a bit of money in the long haul (so far...). The results would have been so much worse if I held onto some of the ultra speculative stocks that have continued to fall. There would have been a winner or two such as EXL that was cut short but it would not have made up for all the losers should they have been held.

willoneau said:

Quick summery of your chart,
total trades=52
wins=17
losses=35
win%=33
av win236.78
av loss=74.82
av return per trade=27.12
payoff ratio=3.16
expectancy=0.36
profit=$1497.7 gross
commision ($10 each way )=1040
net profit= $457.7

Click to expand...

Awesome analysis mate, is there a quicker way to do this type of analysis (e.g. Excel) or all manual entry ?

aus_trader said:

Awesome analysis mate, is there a quicker way to do this type of analysis (e.g. Excel) or all manual entry ?

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Yes there are many free excel spread sheets around just go looking.
that is what i did, also you can now go back and look more deeply into how you are trading and what works for you.

A good start, aus_trader is to look at all those losses and especially were you got out and why. Or even all those wins and where and why you got out.
Was it technically based or emotional?