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Speculative Stock Portfolio

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Let go of Aveo Group (AOG) because I am scared as to what might happen once the indicative proposal is lapsed on the 22nd (see snippets of announcements):

'Aveo received a confidential non-binding and conditional indicative proposal (the Indicative Proposal), from the preferred party'

"The IBC has indicated that if the agreements leading to a Scheme of Arrangement cannot be agreed by Monday, 22 July 2019, the whole-of-company sale transaction process will be discontinued."



Added Clean TeQ Holdings Limited (CLQ), which did well in this portfolio in the past. Past results are not indicative of what may happen, so I could be buying too early and it might continue down in which case it will have to be sold at a loss. Just can't ignore the potential though. CLQ is getting the plan together to supply the Electric battery market with two of the key needed commodities, namely Nickel and Cobalt. These are also key components in hardening steel. CLQ's 'Sunrise' project is big and up there with the projects held by the major mining companies:



The DFS conducted last year has pretty good statistics, so looks like a pretty good stock to me:



Current Portfolio:
 
A company that has fallen out of favour in recent times is the IT services and virtual office space provider Servcorp Limited (SRV). Numbers look good and although the historical yield is 7.7% as stated below, the forward dividend yield is still nice, revised down to ~6% based on the 21c in 2019.



Company has no debt and around $70m in cash based on the last report.

The price chart seems to have found some historical support before moving a little higher recently, so bought some shares today.



Open Portfolio:
 
I was on the lookout for lenders to put on the portfolio, especially given the low interest rate environment. All the major banks seems to be rallying at the moment, but I wanted to look outside the box to find other opportunities.

FlexiGroup Limited (FXL) is a diversified lender that is quite active in the online space. Offers a dividend yield in the mid-4%'s. The price jumped today with a gap up and was added to the portfolio.

 
The two small cap stocks in the portfolio had a brief run up but has fallen back down, so was sold today and removed from the portfolio. So both 5G Networks Ltd (5GN) and Orthocell Ltd (OCC) are gone.

Sold:
 
Just a quick update, MCP has shot up on a JV announcement, so I sold that position and took profits. Will post details later...
 
Hi aus_trader, do you use system , discretion, fundermentle or combinations?
 
willoneau said:
Hi aus_trader, do you use system , discretion, fundermentle or combinations?
Click to expand...
Hi Will, I use a combination of fundamental analysis (my own research into what a company does as well as it's stock matrices such as P/E ratios and dividend yields) as well as very basic level charting such as a simple moving average just to gauge the direction of a stock.

It's not a system that can be coded or put into a recipe i.e. Do 1.A 2.B 3.C etc so it's a bit different to what the other system guys do. By the way what the other traders/investors do I really respect and also something I always learn from. I can honestly say I have learnt some useful nuggets of information from fellow members like Peter2, Skate, Zaxon, yourself and others that are too many to mention that has helped my own methodology and thinking.
 
One stock sold and another bought into the portfolio which I will go into a little detail.

Stock sold was McPherson's Ltd (MCP) which went up a significant amount today as I mentioned in the quick post during the day. The Joint Venture is a good milestone for MCP and helps to branch it out to health & wellness area so it's possible price may continue up. I have to keep my greed in check and be thankful that a return that I wished for in a year or so has come in a space of 1 month from this stock.

Closed:


The stock bought was Mortgage Choice Limited (MOC). I believe another effect of the extreme low interest rate environment is for mortgage holders and investment property owners to shop around for much better low rate loans. This is a great environment to refinance loans and save a bundle so why would anyone not want to ? One of the annoying reasons could be to check individual banks and lenders to find the best rate and package not to mention the paperwork involved. This is where MOC is a leader in comparing many different products and find the ones that could narrow down your selection.



Please ignore the historical dividend yield, it will be revised down to a more reasonable value going forward. In the past that would have made my eyes pop but I try not to fall into the yield trap these days.

Open Portfolio:
 
Are you leaning towards investing or trading?
how are you able to gauge your fundamental input into stock choice? eg ratios or news releases for example.
 
willoneau said:
Are you leaning towards investing or trading?
how are you able to gauge your fundamental input into stock choice? eg ratios or news releases for example.
Click to expand...
This portfolio is a trading portfolio. I also have a longer term portfolio that hasn't been touched for a while because I like that to be a longer term hold type of portfolio. That's something that has evolved over time because it was not initiated that way. But from what I am learning that's the way it's heading. In other words:

Speculative Stock Portfolio : Trading in and out of stocks.

Medium/Longer Term Stock Portfolio : Long term holdings either for growth/safety(wealth preservation) or income.

There is no magic way of doing fundamental analysis for me. I know there are some software and stock filters around but I find doing the tedious work reading reports/news and looking at the company ratios helps me to understand the business better than a buy/sell signal based on some black box system or some star rating from a broker or an investment firm.
 
willoneau said:
How do you keep your greed in check?
Click to expand...
Good question Will, one way to do it is to take profits off the table, at least with part of the position. My positions are smallish so sometimes no point splitting the position, but I have taken partial profits in the past on some of the positions that have had a good run.
 
I looked at taking half my profits off the table at a certain % but came to realize that in order to skew the odds of being consistently profitable i needed to get those outlier trades. Not knowing which they were makes it impossible so i stopped. I don't mind having less than 50% win rate as long as my profit to loss ratio is high.
How is closing a portion of trade controlling greed? I can only see it fanning the ego of being right.

PS I don't like sudden moves up after a period of consistent gain, it is one of the few times i deviate from my system and usually close the position.


I didn't like the move and reached a popular price as well
 
Last edited:
Agree that it's not something that should be used all the time on all positions and I normally let a stock run up if it is going up merrily. But in the case of MCP it had a big up day with a gap up. So in these type of scenarios, when the market hands you a quick price spike, I think it's prudent to lock in or take some profits and say 'thank you'. I find when I say 'Thank You' as opposed to 'I Want More', greed disappears or reduces, hence my comment.
 
aus_trader sit down and look hard at the things that make you deviate from your methodology and find ways to either remove them or control them.
watch Mark Douglas on youtube, very insightful i have watched it a few times. Long but worth it in my opinion.
 
I have two evils that i need to control - overtrading and to some degree tinkering with the system.
I recently started a daily trading system to allow me to indulge my overtrading as i want to be more involved in trading on a daily base at this time and hopefully increase my return. Time will tell and i constantly monitor it, still following my system to the letter and only putting on trades it generates.
 
OK, I will check it out. I have heard about his discipline in the markets and seen some of his books.
 
I suppose that could be a winning system if applied daily during a market going up as we are seeing. There is a risk of putting on too many positions at once if it generates daily signals and you take all/most of them though.
 
I have two systems, a weekly 30 position system and a daily system position size not decided. They are similar so if i have a daily position open and my weekly system triggers that stock i move it from my daily portfolio over to my weekly.
 
Added a Real Estate Investment Trust (REIT) that owns a portfolio of Early Learning Centres across Aus and NZ. Managed by the well respected Charter Hall group, the entity is Charter Hall Education Trust (CQE). I think having a good management team is important, because it wouldn't be nice buying into a company only to see it go into liquidation down the track as experienced by "ABC Learning Centres" in the past.

Pays a quarterly distribution with a yield of around 4% and has been steadily growing the distribution amount over the years...



Open Portfolio:
 
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