Tag: portfolio

  • Portfolio Performance

    Two years strong

    July the 4th marked the two year point for the portfolio, landing (a little sadly) while I was away. This meant the portfolio update - and the birthday celebrations, with a dollar-shaped cake and novelty £50 pound note serviettes - were delayed for a while, notably until after I'd actually caught up with what was going on and rambled on about Communisis for a little bit. We're here now, though, and after the extremely tedious task of updating all the spreadsheets which keep my backend calculations in working order, I've put together the usual charts and figures Satisfying reading they make for, too! Through a combination of blind/beginner's/sheer luck and some modicum of improving stock picking analysis, its done rather well for itself over the last couple of years:

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  • Portfolio

    More (late) spring cleaning

    With the fluctuations of the past few months, and the time I spent researching stocks, I figured it was time to go back to the portfolio and see what I wanted to change. I take a relatively laissez-faire approach to managing the fund in that respect - I probably only rejig things once every couple of months, though I'll break that trend if something interesting happens (bid for a company, 60% price surge etc.) and I can clearly see a company either on my watchlist or in my portfolio is under/overvalued. Most of the time my investing eyes are so cloudy and estimates of value suitably fuzzy that I tend to not worry too much about what happens on a day-to-day basis. There's a good deal of evidence that value investors tend to sell too soon, anyway, so perhaps letting momentum take hold and holding back on the pruning is a winning strategy.

    Still - there was two companies I liked - Tricorn and Vislink, and I knew much of my portfolio had appreciated. This meant that the value in some of my stocks had become less obvious, but the portfolio also had a reasonable (~8%) cash pile to play with. I don't like holding cash - if I were to have no ideas and didn't think I'd find any for any prolonged period of time I'd either buy an index tracker or another 'productive' asset like bonds. Here are the transactions, then: (more…)

  • Portfolio

    Chopping and changing

    I haven't paid a great deal of attention to the structure of the portfolio recently, which is a bit of a shame as things have been bobbling up and down all over the place. This afternoon, I finally took some time to sit down, update the (increasingly gargantuan) spreadsheet and figure out what, if anything, needs changing. I've made a few transactions today, then, which I'll cover briefly before leaving with an explanation of the composition of the portfolio as it stands. That's not to say I'm happy with everything in there - I'm not, particularly, which might be indicative of an investor who started only when everything was cheap and is now finding the going a little more tough.

    The sells

    I've sold Barratt, because I don't think they're worth a premium to their assets in their current state. The whole market shift on Barratt has been rather dramatic when you think about it; only a couple of years ago they were valued at about half of their tangible asset value - an effective statement that the market thought their assets were worth half of what they were on balance sheet at, loosely. There were lots of questions around the impairment of land and the representation of that on the balance sheet, for instance. (more…)

  • EV Portfolio

    Moving things around

    I mentioned last week that I was thinking about selling Tullett Prebon from the EV portfolio after a set of results, and the realisation it was a company I had a particularly poor level of knowledge on. It was a tough decision - not least because it still appeared cheap - but, I hope, was the right one. The situation in actuality was completely at odds with my perception of what was happening, mostly because (as I mentioned) my perception was rather flawed. Since selling it's continued to fall, which always makes me feel a little better!

    The market's fallen pretty significantly this week too, though, which means that the company I bought with the proceeds - Northgate - has dropped a few percentage points. Noise anyway, so of no particular concern. I first discussed Northgate a few months ago, where I was interested by didn't particularly want to sell anything, and so they sat in my shortlist. Some thanks also has to go to red for a post which refreshed my memory and undoubtedly helped me to make up my mind.

    More to come..

    Even with those two changes, though, I'm not particularly happy with the structure of the portfolio. I've included a chart and a table below - the chart is in line format since a pie chart gets too fiddly at small sizes - which give my current holdings. This also serves as a nice update on that side of things, since it's the first thing people usually ask, and has been somewhat lacking since I stopped doing monthly reviews and swapped to half-yearlies to try and avoid the noise and incessant chart watching. (more…)

  • The Portfolio

    Composition

    A reader emailed asking about the current stocks in the portfolio, a slight omission on my website since I got rid of the rather finicky portfolio page. I am working on something to spruce it up a little - it seems a bit silly to have started a blog with the hope of drawing ideas from around the web and opening ideas up to scrutiny and to then not make it obvious what you're currently holding! That's particularly important since I've moved a lot of things around recently and got rid of some of the lower conviction stocks in the portfolio.

    Anyway, below I've collected the 13 stocks in my portfolio and arranged them by percentage holdings, along with the few scraps of cash left in the kitty. (more…)

  • Relative Value

    Measuring quality

    My post on Begbies Traynor last time raised a few interesting questions from a portfolio management point of view. As I was writing it, I couldn't help but draw comparisons to RSM Tenon, the rather despised accountancy firm - both service firms trading on tiny multiples of last years profits after an acquisitive period and some extensive intangibles. Both have balance sheets tied up in illuiqid receivables, and both sets of management seem bearish even in the face of such market hammerings. Many things aren't the same, of course - there are some rather big factors that separate the two companies. Regardless, the questions a comparison between the two companies raised left a few lingering doubts in my mind about my current method of comparatively valuing companies.

    As readers of the blog will know, I rarely use any form of discounted cash flow analysis or any more 'concrete' method for assigning companies a present value. My long-standing reasoning is that they simply represent the biases we possess anyway - me being bullish on all the companies I am, for instance, will mean that I'll obviously just come out with figures that'll make them look like sound investments. Does assigning a number to my biases really help in any way if it does not fundamentally change my thought process? Instead of filling in a spreadsheet to which I know the answer anyway, I figured, I'd rather just move on and do more productive work.

    With that, though, I raise a completely different set of problems. As I thought about the differences between Tenon and Begbies, I struggled with a way to attribute a value to the different problems they face. RSM Tenon faces a management that doesn't seem to particularly care about shareholders. Begbies Traynor faces an uncertain market and may well have just enjoyed their best two years, with corporate insolvencies running way above a long-term average. Qualitatively, I feel I've determined the issues underlying the share price; it's the quantitative bit that needs a little work. (more…)