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A reminder of what I'm doing

Honest reporting on shorter-term trading activity and ideas
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A reminder of what I'm doing


Postby globalarbtrader » November 18th, 2016, 6:54 am

Starting portfolio

Amlin £29,149
GSK £19,967
BAE £26,683
BMS £20,706

Cash £3,494

Sell criteria:
Hit a 30% trailing stop on exit price or high since exit

[Set to ensure an expected holding period long enough so that I won't incur excessive trading costs. See chapter 12 of my book to explain the logic of how this is done, if you're interested]

Replace with:
Eithier one (or two or three shares...) with highest forecast yield(s) meeting following conditions

2016 PE < 12
EPS growth > 0
Forecast yield > 4%
PTBV < 1.5
Forecast div. Cover > 1.2
Gearing < 50%

Data from ... se350.html

Somewhat controversially I won't be double checking any of these figures apart from the forecast dividend, or worrying about the fact this is only updated monthly.

Why would we sometimes buy one, or two or more shares? Well suppose we have an absolute stellar performer that ends up being more than half our portfolio, especially when we throw in accumulated divis. At the point of sale I'd like to diversify somewhat.

So the rule is, if the amount to reinvest is:

- less than 30% of the portfolio, buy one share
- more than 30% of the portfolio, buy two shares
- more than 45% of the portfolio, buy three shares
- more than 60% of the portfolio, buy four shares

... and so on.

Starting portfolio

Value Highest price or entry Stop Current price

HSBA £16,322 5.11 3.58 5.11
OML £16,321 1.64 1.15 1.64
GSK £19,967 16.29 11.40 13.70
BAE £26,683 5.45 3.82 5.00
BMS £20,706 5.5 3.85 4.60


First trade

BMS has broken through the stop (actually did so yesterday but I wasn't looking at my computer, and I don't leave fixed stops with my broker) so I placed an order to SELL. I achieved a price of 3.65 versus the stop of 3.85. With accumulated dividends I realised £18,366 versus my investment of £20,706.

I will be reinvesting the proceeds plus BMS dividends (I can't include other divis, as they are in a different account), in a single new share (as it will be less than 20% of the total portfolio). As the stepone spreadsheet is currently missing some values I will leave this a few days until the end of August vintage is available which will also give a more accurate indicator of which is the best value stock.

More detail to follow then in a few days, for now here is the rest of the portfolio looking healthy:

high stop current
HSBA 5.70 3.99 5.65
OML 2.26 1.58 1.94
GSK 17.12 11.98 16.4
BAE 5.45 3.80 5.64

I've bought 672 shares of BKG at 27.16 and change, which after commission and stamp cost me £18,360.

Aghh.... I hate the idea of owning a bleeding housebuilder, but that is the (dis)advantage of systematic rule based investing.

Here is the current 'folio:

high stop current
HSBA 5.81 4.07 5.79
OML 2.26 1.58 1.99
GSK 17.12 11.98 16.44
BAE 5.56 3.89 5.55
BKG 27.16 19.01 27.16

There is a real procyclical bent now; with a bank, a fund manager, and a housebuilder only partly balancing out the more defensive Defence contractor and pharma firm.

And here is how I've done

Start Cost Divis Current Sold value % of portfolio

BMS £20,706 £2,340 £0 -11.3% £18,366
GSK £19,967 £1,178 £23,908 25.6%
BAE £26,683 £672 £29,851 14.4%

HSBA £16,322 £16,322 £712 £18,454 17.4%
OML £16,321 £16,321 £611 £19,417 22.7%

BKG £18,360 0 £18,360

Cash £1 £3,180

Total £99,999 £113,170 13.2%

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