The Lemon Fool

simoan wrote:

Lootman wrote:I feel sure that you know this but much the same can be achieved by leaving in place a series of buy limit orders, to capture any drop in share price to a point where you would like to add. Then you might not feel any need to look at all.

But why would anyone buy based on price alone? To completely ignore valuation is the very essence of stupidity. Maybe for an index tracker with a long term perspective that approach wouldn’t be ruinous, but for individual company shares your limit order is more than likely going to trigger when there has been a profit warning in the current market conditions. The first profit warning is rarely the last in my experience. It’s almost a guaranteed method for capital erosion.

Doubling down on losers is not a good idea generally, I agree. Although it can work out - last year I kept buying Nvidia as its price declined and I am now up 300% on that position in 12 months.

But that was what Gerry said he wants to do, so I was just suggesting a way to do that.

The only faint light in the gloom, as everything drifts down due to recession expectations, was the dead cat bounce in Aviva on takeover speculation. Now if Allianz really does offer 600p a share...

There seems to be a fight between those who expect the Fed to raise rates due to the very strong US employment statistics, triggering a recession, and those who think the employment stats show the strength of the US economy and that companies can cope with higher interest rates and will report good profits. Glass half empty, or half full?

I'll do nothing, as usual

I track monthly but try not to think too hard on ups and downs, as like most, have a habit of selling things when fall, and buying more after gone up. Would say the 1 year, 3 year, 5 year performance is more reliable indicator.

Looking back at my short investing history, the dips in q4 2018, mar 2020, and dec 2022 (on tesla and some us tech stocks) were in hindsight great times to buy.

Having said that you get 5.5% in the Coventry building society, so if you fancy that at least it's guaranteed.

Lootman wrote:

simoan wrote:But why would anyone buy based on price alone? To completely ignore valuation is the very essence of stupidity. Maybe for an index tracker with a long term perspective that approach wouldn’t be ruinous, but for individual company shares your limit order is more than likely going to trigger when there has been a profit warning in the current market conditions. The first profit warning is rarely the last in my experience. It’s almost a guaranteed method for capital erosion.

Doubling down on losers is not a good idea generally, I agree. Although it can work out - last year I kept buying Nvidia as its price declined and I am now up 300% on that position in 12 months.But that was what Gerry said he wants to do, so I was just suggesting a way to do that.

I didn’t read anything in Gerry’s post that said he bought holdings without regard to valuation, which is what your limit order proposal achieves. It’s no good giving examples of where something worked and ignoring the majority of cases where it doesn’t. In the current market a limit order is likely to buy in on the first lurch down only. As doug2500 mentioned, look at the price reaction to the XP Power and Spirent warnings this week. In the formers case you need to be selling, not buying into a company almost definitely about to breach its banking covenants.

88V8 wrote:

Dod101 wrote:Quite depressing portfolio numbers for this last week.

Three of my larger holdings are in Metro Bank, Diversified Energy and Gulf Keystone.

Had better weeks

V8

Commiserations.

Big drops (in the index - but also in individual equities in line with the markets) are, I think, relatively easy to take in one’s stride. If the low level then persists that is also manageable as one looks forward to a (delayed) recovery. It’s long, slow grinding downwards that is hard … the gloom seems ongoing and it’s easy to (mentally) project the trend down and also have regrets about not having sold last week/month/year.

As it happens (and it’s pretty rare) I’ve been doing some major portfolio(s) reorganisation. I wanted to crystallise some big unprotected gains and losses to defuse any silly risks (I expect governments of either stripe to look at easy pickings such as CGT rules). I’m rather hoping RIO, NG. and BA. drop as they are all shares I’d like to buy back after the 30 days, so I’ve got a lot of “dry powder” just at the moment. The other part of the reorganisation (not really relevant here) was to focus the various Vanguard ETF’s into VEVE and 10% VFEM which will cut costs - I also bought more Caledonia IT and Legal and General.

Back to the OP: this slow grind downwards might test some nerves (and plans) if it goes on for a further year or two (who’s swimming naked?)

Best wishes, Steve

Occasionally I do use limit orders. They changed things so your cash can only be used once. I used to be able to use one set of buy funds against x10 shares. The scatter gun worked until the first share hit the limit. Now I need x10 sets of buying funds to do the same. As for valuations, if I decided it was worth buying at a pound then if it drops to 90p without any change in circumstances then if I have free funds why not buy more?

Typically most shares drop with the market so it tends to be times with lots to buy and times with nothing to buy.

BullDog wrote:

88V8 wrote:Three of my larger holdings are in Metro Bank, Diversified Energy and Gulf Keystone.
Had better weeks

Commiserations.

I should have borrowed your bargepole

V8

88V8 wrote:

BullDog wrote:

Commiserations.

I should have borrowed your bargepole

V8

It broke when I bought some Regional REIT. Another too good to be true dividend stock.

Steveam wrote:Big drops (in the index - but also in individual equities in line with the markets) are, I think, relatively easy to take in one’s stride. If the low level then persists that is also manageable as one looks forward to a (delayed) recovery. It’s long, slow grinding downwards that is hard … the gloom seems ongoing and it’s easy to (mentally) project the trend down and also have regrets about not having sold last week/month/year.

As it happens (and it’s pretty rare) I’ve been doing some major portfolio(s) reorganisation. I wanted to crystallise some big unprotected gains and losses to defuse any silly risks (I expect governments of either stripe to look at easy pickings such as CGT rules). I’m rather hoping RIO, NG. and BA. drop as they are all shares I’d like to buy back after the 30 days, so I’ve got a lot of “dry powder” just at the moment. The other part of the reorganisation (not really relevant here) was to focus the various Vanguard ETF’s into VEVE and 10% VFEM which will cut costs - I also bought more Caledonia IT and Legal and General.

Back to the OP: this slow grind downwards might test some nerves (and plans) if it goes on for a further year or two (who’s swimming naked?)

Best wishes, Steve

I think that SSE is probably good value at around £15.20 or thereabouts. It was over £18 a few weeks back. Since it revealed that wind turbines are not the guaranteed producer of electricity that they were once thought to be they have fallen away. And of course that cut in the dividend but as I keep saying at least that is to release funds for investment. OTOH, their debt is quite high.

Dod

BullDog wrote:Another typically awful week, for sure.

Since I retired and had little new cash to invest, it feels like I've been engaged in a financial war of attrition. About 15% down in capital terms over three years feels about right. Thankfully dividends have held up rather well, broadly.

An expensive lesson in owning some of the highest yielding stocks has been painfully learned here too. The very high yields are great. Until they aren't. Or there's a corresponding loss in capital. Not on my own there.

At least my dividend income isn't needed to live off. I'm curtailing drawing a portion of dividend income for the next couple of years to reinvest and rebuild some of the losses from the too good to be true high yield shares. I'm fortunate I can do that with zero impact on lifestyle.

A more modest but growing income from shares is the future here.

You have just cheered me up as mine is currently just 10% down re where it was as peak.

Whilst little fresh cash goes into the SIPP (nominal 62.50 per month these days) and it churns out a bit in dividends, it is like walking in treacle, I am still 10% down on peak SIPP with three or holdings looking very sore, my Scottish Mortgage holding now in loss.

On the plus side over two years until I start taking any of it, most of what I will take and spend will be the dividends and the 25% tax free sums will get withdrawn and roll into our ISA positions, so as the holdings will in large part be with me for 10-12 years possibly too early to panic. (I did have a forecast where I would be by now and if no headway now made by 2026 I expect by then to be 25% down on where I first expected to be at retirement)

However as no wholesale encashment envisaged there is still time, for me, for markets to improve .

Evening All.

I measure (unitise) twice monthly, starting from £100 units at 30/06/2021.

The relevant values (picking up some of the earlier conversations in the chain) are

Year To Date (to 30/09/2023): +4.19%
Since Peak (from 31/12/2021): -5.44%
Since Inception (as above): +0.15%

These are all absolute values - not time or inflation adjusted.

Can't comment on the last week specifically (yet at least) but today was rather good, and I have quite sizable holdings in HDIV which have done well with the announcement of the merger with HHI. Almost all the other trades I have done recently have worked out well in the short term at least - it isn't always that way!

Regards, Newroad

- Since 01 Jan 23 (YTD) +7.71% including Dividends received.
- Since 01 Jan 23 I have disposed of Roll Royce banking a large gain, this is probably the reason for the +ve YTD figure.
- Diageo has been invested in mightily over the last couple of weeks, hence the outsized % of portfolio.
- The S&P500 Index ETF (HSPX) was added as an anchor to benchmark everything else against.

YeeWo wrote:

Code: Select all

     | % PF  | YTD    | Agg XIRR | Held Since
BATS | 12.1% | -26.8% |   -9.06% | 17-May-23
DGE  | 26.5% | -15.7% |    5.16% | 12-Jan-11
HSPX |  2.6% |  12.0% |    3.54% | 17-Aug-23
INCH | 12.0% | -17.9% |   22.81% | 11-Apr-22
REL  | 15.5% |  26.3% |   19.08% | 01-Aug-10
RIO  | 14.0% | -13.1% |    3.71% | 03-Jul-23
ULVR | 14.6% |  -6.4% |    8.45% | 12-Jan-11


- Since 01 Jan 23 (YTD) +7.71% including Dividends received.
- Since 01 Jan 23 I have disposed of Roll Royce banking a large gain, this is probably the reason for the +ve YTD figure.
- Diageo has been invested in mightily over the last couple of weeks, hence the outsized % of portfolio.
- The S&P500 Index ETF (HSPX) was added as an anchor to benchmark everything else against.

I think it might be a good time to top up DGE. It's on my top up list but,as I said in another post elsewhere, it's knowing where to top up or add to first! 26% is a strong position !

Spurred into action by this thread, I decided to take a periodic "snapshot" of asset performance. I ignore cash savings but include cash balances in Investment accounts, Figures were taken last Thursday 12/10/23.

What complicates things slightly is that for the last 12 months or so I've sold a fixed sum of units each month to provide income, plus taken dividends from a pot of circa 10% of our assets, and paid £240/month into a SIPP. Generally I ignore those in my valuations as all I'm interested in is "what's left". As II is down today I can't easily work out the divis, but using last year's Tax cert I can get a good idea that net withdrawal is about 0.06%, so I'll continue to ignore it

Valuation date and performance since that date.... this is discreet performance over that time period, not cumulative or between the time points.

30/03/22 : +8.9%
06/07/22 : +8.2%
06/08/22 : +3.4%
03/01/21 : +4.7%
31/05/23 : +2.3%

The sharp eyed amongst you will have spotted the huge decrease in increase since Aug 2022 compared to a month earlier. Looking at VWRP (global accumulating) it registered a 14% gain between 16/6/22 and 18/8/22., and showed a 3% gain from 30/3/22 to last Thursday, although a week before the return had been Zero.

This tells me 2 things
1) I've been lucky
2) when the Global indices can shift 5% or so in a week, then looking at the value of your portfolio every few days without some sort of reference point to compare it against doesn't serve any practical purpose.

Paul

DrFfybes wrote:This tells me 2 things
1) I've been lucky
2) when the Global indices can shift 5% or so in a week, then looking at the value of your portfolio every few days without some sort of reference point to compare it against doesn't serve any practical purpose.

Paul

Obviously you would compare it with your chosen index. But do not forget the HYPers mantra. It's the dividend income that matters. The capital value can and will fluctuate. You have little control over that fluctuation, but you can choose investments that do not exactly align with the market. I am talking about constituents of the index which are lower in the capital rankings, and so have less effect on the index value, but a bigger effect on your portfolio value.

I always keep a record of how the share prices of my investments have changed since the start of the year. What rose one year is often a faller in the next year and vice versa. I'm not at home at the moment, so cannot reproduce the figures, but they are on this site somewhere.

My preference is for nominally equal weighting of holdings, but with action points to flag up overweight shares. Things can move quite rapidly on occasions, so it helps to keep a regular eye on individual holding values.

TJH

Ref TJH’s post,O am not a HYPer and do reference to that can be ignored. In fact I was doing just the opposite, commenting on capital values.

Dod

Dod101 wrote:Ref TJH’s post,O am not a HYPer and do reference to that can be ignored. In fact I was doing just the opposite, commenting on capital values.

Dod

So was I Dod. My point is that capital growth can come more from smaller members of an index, than from the heavyweights. Because of index weighting, if you buy tracker funds you are going to be proportionately more invested in those heavyweight companies. Keeping an eye on the relative movements in individual shares can be valuable.

TJH

tjh290633 wrote:

Dod101 wrote:Ref TJH’s post,O am not a HYPer and do reference to that can be ignored. In fact I was doing just the opposite, commenting on capital values.

Dod

So was I Dod. My point is that capital growth can come more from smaller members of an index, than from the heavyweights. Because of index weighting, if you buy tracker funds you are going to be proportionately more invested in those heavyweight companies. Keeping an eye on the relative movements in individual shares can be valuable.

TJH

Thanks I take your point.

Dod

I won't lie, this year has been tough, especially for anyone running a HYP. My HYP and my portfolio in general (HYP is not my only strategy) remains somewhere between 5-10% below its Jan peak, and right on the lower end of that range in the week ending 7th Oct.

This shouldn't really be a surprise, but I don't think it's anything to really be worried about - all strategies will go through periods of underperformance. The underlying companies are still the same, just that Mr Market has chosen to value them differently.

If you are living off your portfolio then the last couple years hasn't been good - we are in trickier times now and may be in for a period of sucky returns for a few years, but personally as someone still mid-late career and and in accumulation phase, I will continue to each month build my HYP pot as my main active strategy, while contributing to my Nest pension as a default passive strategy.

Indeed it is the market's job to keep investors worried - if it was easy and losses (even paper losses) didn't cause regret then there would be no risk, and then ultimately no excess return.