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Doug 2500's Annual Portfolio review

A helpful place to also put any annual reports etc, of your own portfolios
doug2500
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Doug 2500's Annual Portfolio review

#45401

Postby doug2500 » April 11th, 2017, 10:34 pm

Ticker | Name                              |       |            | 2016 | 2015
| | | | |
| Fundsmith | 18.1% | | 16% | 15%
AMS | Advanced Medical Solutions | 12.4% | | 10% | 8%
BATS | British American Tobacco | 5.6% | Top sliced | 6% | 7%
JHD | James Halstead | 4.6% | | 5% | 4%
MCGN | Microgen | 4.2% | | 2% | 2%
FEET | Fundsmith Emerging Equities Trust | 4.2% | Topped Up | 3% | 4%
DPLM | Diploma | 4.2% | | 3% | 4%
| CASH | 3.5% | | 6% | 3%
BVXP | Bioventix | 3.4% | Topped Up | 1% |
ZYT | Zytronic | 3.3% | Topped Up | 2% |
| Standard Life Funds | 3.2% | | 3% | 3%
SSE | SSE | 3.1% | | 4% | 4%
LGEN | Legal & General | 2.8% | | 3% | 4%
ZTF | Zotefoams | 2.7% | | 3% | 3%
CGS | Castings | 2.6% | Topped Up | 3% |
RDSB | Royal Dutch Shell | 2.5% | | 2% | 3%
| Newton Funds | 2.2% | | 2% | 2%
TRCS | Tracsis | 2.1% | Topped Up | 3% | 2%
FGT | Finsbury Growth & Income Trust | 2.0% | Topped Up | 1% |
SOM | Somero Enterprises Inc | 1.8% | New | |
PAF | Pan African Resources | 1.7% | Topped Up | 1% | 1%
AZN | AstraZeneca | 1.6% | | 2% | 2%
WPCT | Woodford Patient Capital Trust | 1.6% | | 2% | 2%
| CF Woodford Equity Income | 1.5% | | 2% | 2%
EAT | European Assets Trust | 1.4% | Topped Up | 1% |
| MFM Slater Growth | 1.0% | | 1% | 1%
XPP | XP Power | 0.8% | New | |
NXT | Next | 0.8% | | 1% |
THAL | Thalassa Holdings | 0.5% | New | |
LLOY | Lloyds Banking | 0.4% | | 1% | 1%
TET | Treatt | 0.2% | New | |
| | | | |
| | | | |
| Sold | | | |
| Regus | | | |
| Vodafone | | | |
| BT | | | |
| Sepura | | | |
| Goodwin | | | |
| TrakM8 | | | |
| Rolls Royce | | | |


Summary

Overall up about 22% total return. Nothing to shout about, slightly below the All share TR which was 23.8%
TrakM8 dragged me down a bit. Ironically I was on holiday when trouble hit, and I read the stockopedia guide to profit warning while relaxing by the pool. By the time I was home the damage was done.
I can live with this but expect to outperform most of the time, otherwise what’s the point? Historically I have done better than my benchmark almost every year so a slight underperformance won’t stress me.

The Sells:

BT
I spent ages working out my tax cost as I’ve held these since privatisation, but in a couple of tranches with top slicing and B & ISA’ing along the way. I realised I didn’t need to know what I’d sold any for just what the total tax cost was and I managed to work this out. Plan a was to sell off within tax gain limits to avoid reporting it but plan b, actually finding out what they cost and getting rid of them all pleases me more. Main reason for selling was the pension deficit (and size). Also woeful customer service must at some point cost them dearly. Since selling they’ve hit the skids which is always pleasing!

Regus
Things got so volatile I just thought I’d get out of a couple of low confidence positions (BT and Regus) and hold some cash. I’d like to see Regus stop expanding for a while and strengthen it’s balance sheet.

Sepura
Thankfully got out at a profit at 125p after the first warnings. I never thought it would sink so low subsequently. Once things stabilize I would consider it again. (written in october for a half year review on the old fool)

Vodafone
It was a small position and I thought I should top up or sell, and sold.

Goodwin
Sold on a tough outlook and so far looks like the correct thing, but I’d be tempted back in if it fell further.

TrakM8
Enough said. Didn’t get out quick enough after the profit warning and (probably) sold at the bottom.

Rolls Royce
Too hard to value, it’s too complicated for me and I sold on an uncertain outlook. It was also a long term holding that I’d built up by converting c shares and the record keeping was annoying me.

The Buys:

Thalassa
It looked interesting and was the closest thing to a true value share I’d seen in a while. No sooner had I bought them and management started blowing all the cash on non core investments. I had only taken a small nibble planning to top up as I got to know the company better, and see how results were going. I doubt I’ll do that now but I’ll let it run for a while and see what happens.

TrakM8 (written at the half year stage!!!)
I think it looks okay but I bought too early. Worryingly it has been sold off quite badly in a rising market. Results are due soon so I’ll see what they say. With hindsight I’ll probably end up wishing I’d filled my boots at 160p, or sold the lot! It wasn’t long ago there was a placing at 330p, ouch.

Somero
I was a bit late to the party (I was worried it was too cheap!!!!) but eventually gave in because the value was too great to ignore. I missed some good gains but still made some.

XP Power
I really like this company and bought an ‘opening’ position since when it has gone above what I’m prepared to pay. What do I do now? I think I’ll keep it and pounce on any weakness.

Treatt
Again I really liked it and was determined to buy some but struggled with the valuation. In a weak moment I bought a very small holding and don’t know what to do now. Probably the same as XPP above.

General Musings:
I must take larger opening positions. If I’ve done my research I should have more courage in my convictions. It’s hard when valuations are generally high though. Especially when there is so much uncertainty on the horizon.

Still need to work on my long tail of small holdings.

Due to the two largest holdings also being about the best performing they are dominating and are becoming ever bigger as a percentage of the portfolio. I can’t help their outperformance, and will let my winners run. Risk wise I can accept a 50% drop in either. If it happens to both I would guess there will be wider market issues.

Compounding is magical and I’m beginning to really see it working. A couple of years ago CGT was not an issue for me, now I harvest my tax free allowance every year and can’t keep pace with growth. The increase in portfolio value year on year is very pleasing and growing. Cue bad year.
For the second year in a row I’ve swapped brokers. It never seems to go right and throws my paperwork into disarray. I hope that’s me settled now for many years.

My recordkeeping is becoming cumbersome and I’m going to keep better cashflow records and use XIRR to get a performance result at the years end. After 10 years investing my XIRR is 12.2% although there’s been so many changes along the way this figure may be compromised. I’m trying to simplify my record keeping from now on.

Plans

Not much.
Top slice BATS again if I have CGT headroom at the end of the year.
Top up some smaller holding on any weakness, particularly SOM, XPP and TET.

Any comments welcome!

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Re: Doug 2500's Annual Portfolio review

#45677

Postby ADrunkenMarcus » April 13th, 2017, 7:48 am

Doug2500

Thanks for your review. It's always nice to see a portfolio that is somewhat different to many of the blue chip stalwarts. You have a punchy holding in Fundsmith and I heartily approve of a large, core global holding. I think if you are paying for, and have confidence in, a truly active manager and stockpicker then it's worthwhile doing this. For myself, I have about 18 percent of my dividend growth/ISA portfolio in Murray International, which has a higher dividend yield but I have Fundsmith on my list as well for the future and I suspect the latter may outperform the former over a long period.

I hold Diploma, too, and AstraZeneca. Your holding in James Halstead is a good choice, I think.

As you alluded to, there is the question of new holdings and small positions. For example, Treatt at present could triple but still only go from 0.2 to 0.6 percent of your portfolio and therefore add less than half a percent to your overall portfolio total return.

You have quoted an impressive XIRR but have you looked at unitising, too?

Best wishes

Mark.

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Re: Doug 2500's Annual Portfolio review

#45684

Postby YeeWo » April 13th, 2017, 8:31 am

Really intrigued by Tracsis! Why do you hold this? I know the Rail Industry quite well and while I really like the idea of an asset-lite business such as Tracsis, I'm deeply suspicious of the illogical way in which TOC's/Network Rail turn-on-a-sixpence and cancel outsourced contracts for no logical reason. In the distant past I held Invensys which owned Westinghouse (Signalling Equipment) and found it was impossible to fathom when/why and if large scale expenditure was going to take place and who was Master/Servant in any negotiation!
ADrunkenMarcus wrote:You have quoted an impressive XIRR but have you looked at unitising, too?
Mark, I'm still not Sold on the idea of Unitisation! Presumably the benefit is to benchmark against an Index? Over how many years is this relevant i.e. How many years of Stock Picking before you throw-it-all-in and buy an ETF? Best, YW.

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Re: Doug 2500's Annual Portfolio review

#46045

Postby doug2500 » April 15th, 2017, 11:43 am

Thanks for your review. It's always nice to see a portfolio that is somewhat different to many of the blue chip stalwarts. You have a punchy holding in Fundsmith and I heartily approve of a large, core global holding. I think if you are paying for, and have confidence in, a truly active manager and stockpicker then it's worthwhile doing this. For myself, I have about 18 percent of my dividend growth/ISA portfolio in Murray International, which has a higher dividend yield but I have Fundsmith on my list as well for the future and I suspect the latter may outperform the former over a long period.


My XIRR for Fundsmith is 21.43% which is sobering as I really think of myself as a stock picker!

As you alluded to, there is the question of new holdings and small positions. For example, Treatt at present could triple but still only go from 0.2 to 0.6 percent of your portfolio and therefore add less than half a percent to your overall portfolio total return.


I am aware it's a pointless holding, even XPP is, but my intention is to build on them, but only at sensible valuations. It's very difficult to be fully invested but only but what I like at sensible valuations. Most of my smaller holdings I'm content to leave smaller, for now at least.

You have quoted an impressive XIRR but have you looked at unitising, too?


I have looked in the past but decided it's too difficult. I'm looking again but the problem is the detail - getting a whole portfolio valuation everytime I do something and how and when to treat dividends. Swapping brokers has really messed me about,they swap assets at different times and leave some behind and everything got complicated. It would mess with any way of analysis. I do like the idea of a comparable figure though.

Thanks for the feedback.

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Re: Doug 2500's Annual Portfolio review

#46048

Postby doug2500 » April 15th, 2017, 11:51 am

YeeWo wrote:Really intrigued by Tracsis! Why do you hold this? I know the Rail Industry quite well and while I really like the idea of an asset-lite business such as Tracsis, I'm deeply suspicious of the illogical way in which TOC's/Network Rail turn-on-a-sixpence and cancel outsourced contracts for no logical reason. In the distant past I held Invensys which owned Westinghouse (Signalling Equipment) and found it was impossible to fathom when/why and if large scale expenditure was going to take place and who was Master/Servant in any negotiation!
ADrunkenMarcus wrote:You have quoted an impressive XIRR but have you looked at unitising, too?
Mark, I'm still not Sold on the idea of Unitisation! Presumably the benefit is to benchmark against an Index? Over how many years is this relevant i.e. How many years of Stock Picking before you throw-it-all-in and buy an ETF? Best, YW.


Thanks for the feedback. I'm not convinced by unitisation either but I'm looking into it.

Tracsis has been a good investment for me. I liked the idea of their scheduling software and condition monitoring, the opportunity in the US is huge. They are also diversifying into traffic and people control and data collection so they are not totally reliant on network rail. They've shown good growth, good return on capital and good cash generation since I've held them. I have no insight into the rail industry.

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Re: Doug 2500's Annual Portfolio review

#132636

Postby doug2500 » April 16th, 2018, 7:25 pm

Year Ending 2018 Review

Results:

Trading Account is up 9.6%
ISA’s are up 19.6%
Funds are up 10.5%
FTSE 100 TR is up 1%
My chosen benchmark the FTSE All-share TR is up 2.9%

For interest, my trading accounts and ISA's are roughly equal amounts, and the funds are about 5% of the total (some funds in the portfolio are in the ISA and trading bits, just newton and standard life are in the 'funds' bit!)

These figures are based on my new unitised system which I started last year while inspired by discussions on The Lemon Fool. I wish I’d started earlier but I couldn’t be bothered to back date it. I really like it and it’s not too much work to do acc units. You could argue that I should lump everything in together instead of three subsections, but I like this approach. It makes it so quick and easy to get a snapshot of how things are going at a certain point in time. I have also taken valuations at new year so I can compare calendar years as well as tax years.

I say it’s not been much work but I’ve just re-written my spreadsheet and re-entered last years data! Again thanks to TLF I found pinchthepennies spreadsheet which I preferred to my own so I started again following his as a guide rather than just using it as is. I’m happy with the results and hopefully that’s it done for many years. Thanks to pinchthepennies, and I think drunkenmarcus also encouraged me (bear in mind this was last year) and everyone else who contributed to that discussion and community.

My only problem is that I still track individual accounts using XIRR which I quite like so I’m guilty of overanalysing things a bit. Also I’m not quite sure how best to analyse my units going forward? This year was easy as I started at 100 last year, but should I XIRR my unit value? Any comments welcome.

I’m very happy with the performance especially as it will have suffered from slight cash drag all year and I also believe my portfolio to be less risky than the index. I mean this in both senses: 1) less volatile – this may not always be true of course, but this year it has risen more than the index but fallen less in the recent decline, and 2) it is largely made up of very well capitalised companies so risk of bankruptcy and financial stress should also be low.

Portfolio:



There’s still a bit too much of a tail but generally speaking I’m much happier with my portfolio now than in the last few years. Most of the tail end I’m happy to let sit there, some like Treatt I’d top up if it ever got to an attractive valuation. I accept it’s a bit unbalanced but I can live with it. It doesn’t look so bad if you ignore the top two holdings! For once I’m glad to see my own stock picking has outperformed Fundsmith!


Sales

Castings I just got worried about lack of growth, concentration of customers and possibly being more at risk from leaving the EU than most. Sold at 420p for a small loss.

Astrazeneca Too difficult for me to value, but I didn’t like the feel of it, markets were high and it looked a good bet to ‘take some risk off the table’ Sold at 5085p for a good profit.

Pan African Resources Too many operational / political problems for my liking in the end. Sold at 13.5p for tiny loss.

Next I just lost faith in even the best retailer. It sounds tough out there, and if it gets worse I’d be happy to reinvest. Sold at 4333p for a loss.

Polypipe I thought it looked a good, solid, boring company and I still suspect it is. I worried that it may get caught up in the carillion debacle either directly or just through sentiment so sold out (bar a small rump in one account that will go sometime. Probably) Looks like the right decision because it fallen steadily since then. Sold at 413p for small profit.

Royal Dutch Shell ‘Never sell Shell’. Well, we’ll see. I track my holdings XIRR’s and this was at the bottom after many years (2% plus the generous yield, I guesstimate that to be in the range of 6 – 8% total return). While oil will be their mainstay for many years I can see problems from them re-inventing themselves as an energy company. Execution risk if you like. I did well and sold 1/3 at £26 hoping that the price would continue up. It didn’t and I sold the rest for £22.90. Should I have sold the lot once I’d decided to sell? Possibly, but I didn’t have anything to spend the proceeds on so just thought I’d see what happened. Decent profit on the face of it, but not time weighted.

Newton Continental European Fund Tracking my holdings XIRR’s showed this was also at the bottom (6.48%). How long should you give a holding to assess it properly? I’m not sure but 11 years was enough for me. I decided I’d rather hold more EAT if I wanted European exposure.

Standard Life UK Equity Unconstrained I just couldn’t believe how poorly this has done in the last couple of years (XIRR of 4.24% over 3 years) during a bull period and couldn’t be bothered to wait and see if it did better in a bear.

Top Sliced

Advanced Medical Solutions I just used up some CGT allowance to make the tiniest top slice. Maybe next year I’ll do it properly.

Woodford Equity Income Again took some (modest) CGT allowance and tidied up my record keeping. Accounting for acc funds in an untaxed account isn’t the end of the world but it’s one more thing to do. He’s certainly having a hard time just now and I hadn’t actually planned to sell but when I assessed my portfolio to see if there was anything suitable for selling it hit the spot.


Purchases

Polypipe As above (in sells) I thought it looked a good, solid, boring company.

Focusrite I took a gulp at the valuation and bought some at 242p, then a few more at 331p. I don’t think this will ever be a huge holding for me, but it’s on a tear right now!

IQE I don’t mind admitting this is a punt. Total punt. I don’t understand semiconductor wafer manufacturing but I had a bit of FOMO and had a small quantity of cash in an ISA where I had no desire to top up anything, so I had a bet at 129p

Burford Capital I’ve watched on the sidelines for a while thinking it was too expensive. Although I would be the first to admit I can’t really value it, I thought at £10.14 it was not expensive so bought half my holding before the recent results. I bought the other half at the open on results day at £11.70. Possibly my best short term trading ever. But then I’m not a short term trader.

Top Ups

Treatt Small top up but too expensive to get much. Will hang on though as there’s plenty to go wrong in the next couple of years.

XP Power Great Company. Topped up at £26 in the summer, then again at £32 in march.

European Assets Trust Just gives me some European exposure.

Somero Spent most of the year thinking that if anything was cheap in my portfolio this was it – but did not do a lot about it apart from a small top up at 272p. I should listen to myself more.

James Halstead Just as small top up as part of a bed and ISA. It took me to a nice round number of shares, which is always nice.

There’s been too much activity again with too much trading, closing (moving) one ISA and opening one joint account (to maximise dividend and CGT allowance) which has contributed to work and complexity. Hopefully this year will be quieter for once.

I’m surprised how much it aggrieved me to swap certificates into a nominee account. I’m no fan of the nominee system but it really irked me having to use it to minimise tax. Why can’t all accounts be CREST? I’m not sure if it’s a plus or not but I feel much less of an ownership bond and feel I’m more likely to sell those shares now. Weird, but that’s how I feel.

Thanks for reading and sorry about the formatting (cutting and pasting from word didn't work that well, any comments welcome.

Doug

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Re: Doug 2500's Annual Portfolio review

#132686

Postby tjh290633 » April 16th, 2018, 11:11 pm

doug2500 wrote:Newton Continental European Fund Tracking my holdings XIRR’s showed this was also at the bottom (6.48%). How long should you give a holding to assess it properly? I’m not sure but 11 years was enough for me. I decided I’d rather hold more EAT if I wanted European exposure.

My wife has had a holding in Newton Continental Europe Fund since 1998, so approaching the 20-year mark.

All income has been reinvested and the XIRR is 5.61%. October 2002 was a low point at about 80p. It started at 110p. There was a class conversion to Class B in 2016.

On the other hand, Newton Oriental has been held for the same length of time and its XIRR is 11.78%.

TJH

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Re: Doug 2500's Annual Portfolio review

#132921

Postby doug2500 » April 17th, 2018, 8:21 pm

tjh290633 wrote:
On the other hand, Newton Oriental has been held for the same length of time and its XIRR is 11.78%.

TJH


Funny that. Those are the same two funds I had, now just the one. I inherited mine so possibly purchased originally 20 years ago. I wonder if they were sold together regularly or if it's just a coincidence?

My XIRR on the oriental fund is 8.5% since 2006 so it might just find itself being sold too. TBH it's not a terrible growth rate but it is low compared to my other holdings. Of course you're never comparing like for like because they're all bought at different times.

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Re: Doug 2500's Annual Portfolio review

#134635

Postby doug2500 » April 25th, 2018, 10:07 am

I thought I'd pop up an image of my unitisation spreadsheet to prove that's it's not difficult. I took some convincing but I'm glad I started. I would hesitate to do income units but acc units are easy unless you're moving money all the time.

It's just a case of looking up your account values every time you move cash. It has to be the proper accounts because a portfolio on e.g. stockopedia won't show how much cash is in your account.

It helps a lot if you have a dedicated bank account to receive dividends if you have direct holdings. Most people have nominee accounts so it's not an issue. This was what swung my decision, I realized I had a dormant account which could take all my dividends, and this account then became part of my portfolio. Only when I take cash out of it do I update the spreadsheet, and then only if the cash is not going into a trading account.

It's a screenshot of my funds page, which are acc funds so no dividends to account for (for the purpose of unitisation at least):

https://i.imgur.com/6O5802y.png

I'd hoped to make it an image rather than a link but that appears not to be possible. [img] is off apparently.

Doug

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Re: Doug 2500's Annual Portfolio review

#135463

Postby ADrunkenMarcus » April 29th, 2018, 9:57 am

doug2500 wrote:I thought I'd pop up an image of my unitisation spreadsheet to prove that's it's not difficult. I took some convincing but I'm glad I started.


Once it's all set up, it doesn't take too much effort, but the data you get from it can be invaluable. I hope it works for you.

Best wishes

Mark.

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Re: Doug 2500's Annual Portfolio review

#150441

Postby doug2500 » July 6th, 2018, 11:48 am

1st Quarter

For anyone that's interested my unit price change for the first quarter (since start of tax year) are:
Trading: 3.4%
ISA's: 6.2%
Funds: 8.6%
FTSE Allshare TR: 6.7%

So a bit behind my chosen index, although they didn't fall as much from jan to april so they would be well up on the last six months. Which just shows it all depends on what time frame you choose.

Unit prices since inception at 100p(1 year and 1 quarter ago) are:
Trading: 113.44
ISA's: 127.03
Funds: 120.11
FTSE Allshare TR: 109.85

There are no changes to my portfolio but the cash pile has grown, although not in percentage terms which is still 7.6%.
I'd like to deploy but am not seeing much value.

I don't include my SIPP as I can't be bothered dealing with monthly contributions and tax refunds, but I often make a small purchase in whatever is on my watchlist that looks best value once a month in it. The way my broker works it costs me less to trade once than do nothing. While this is a rubbish way to decide to trade I take another view: it's some pound cost averaging and drip feeding in something that will be held for the long term. It's no different to what would happen if my pension contributions went into a manager's fund, although if I trade in another account and I don't want to trade for it's own sake in the SIPP, I don't and let the cash accumulate. So far this year I bought small amounts of Zytronic and Somero, and so far both are up slightly.

Doug

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Re: Doug 2500's Annual Portfolio review

#150940

Postby ADrunkenMarcus » July 8th, 2018, 4:50 pm

Thanks for sharing, Doug.

It can be hard to have a reserve of cash waiting to be invested, but it'll pay off when the market turns down and you may be able to bag some real bargains.

Best wishes

Mark.


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