What are your top holdings and why?

[monabri]

Another vote for MGNS as a high quality share. I bought fairly recently and gas been my best performing share in 2023 with a nice dividend and almost 50% price appreciation.

This may not be the best place to discuss Morgan Sindall but I have been mulling it over as a possible replacement for some of my tobacco holdings. Like the sound of it; the culture looks good and I assume the CEO is part of the founding family?

Dod

I think the 50% increase is a bounce back in shareprice similar to that seen in housebuilders ( eg Taylor Wimpey). MGNS appears to be a low margin business.

Page 5 of the 2023 HY Presentation...or, better, Page 6 where margins of the individual parts of the business are stated.

https://www.morgansindall.com/investors/latest-results

[midgesgalore]

My biggest holdings by value are < epic, Name, % holding>

- FCIT, Foreign & Colonial IT, 9.4% - A well diversified global portfolio and I keep it as a growth generator in my SIPP. Not much yield but not much risk and the costs are low.
- BHP, Mining, 7.7% - I have always stuck with this share since first purchase in 2014. It has gone up and down a few times but keeps returning cash through various means, divestment, special dividends and normal dividends. Only dividend setbacks were in 2016 (-76% from 2015) and 2020 (-50% from 2019)
- SMT, Scottish Mortgage IT, 7.4% - Another growth investment (more seed capital than FCIT) in my SIPP that I believe will turn around in its fortune
- BA, BAE Systems, 6.8% - This has done well for me since I first invested in 2011 (in a small way) but now with significantly boosted 50 / 50 investment in my ISA and SIPP, by 2015, has generated 170% total return. Not fabulous but steady enough.
- BIPS, Invesco Bond Income Plus IT, 6.8% - I bought into this recently in my SIPP (where my cash was) as I reasoned bond prices are rising as interest rates are reducing. I don't expect to be holding this forever (probably until interest rates stabilise) but a rising price + approx 7% yield at time of purchase is a decent expectation
- LWDB, Law Debenture Investment Trust, 6.8% - The only trust I could buy with cash during 2020 during the crash but was always on my watchlist. Annual dividend increases of just over 5% since purchase and an adequate dividend too at 3.6%. A steady Eadie.

midgesgalore

[Sorcery]

AMD is my largest holding at about 25% of my portfolio. Bought quite a lot at $6.77 on 1st March 2017 on whispers that AMD was going to produce a game changing chip. I had always been an AMD fan and commercial buyer of their PC compatible CPUs, on the basis of performance per $ (for the CPU cost). It's grown quite a lot by acquisition and sales in the PC market since 2017. Intel the gorilla in the space, is fading into second place behind AMD.

Regrettably I got nervous during the Covid market downturn and sold a few and had to buy back some of the shares sold
at higher share prices. Over the years since, Lisa Su as CEO of AMD has achieved some remarkable results: the introduction of 8 core chiplets with the Zen 1. This allowed them to sell their fully operational chips at high prices and the slightly less operational chips (6 core, 4 core, or reduced speed) at lower prices to produce a whole range of CPUs from one chip. Now we are onto Zen 4 and anticipating Zen 5 next year.

The main reason for holding AMD as an investment is it's caught up with Nvidia's H100 which is the market leader in AI hardware and is responsible for Nvidia's earnings and share price growth. AMDs MI300X has been on sale during Q4. AMD's chip are faster and cheaper. I expect AMD's earnings to grow substantially over the next year, however on a PE of approx 1500 it needs to.

The AMD share price is $146.07 on 28/12/23 Nasdaq close, not far from it's 52 week high of $150.41. I am quite relaxed about my oversize holding.

[dealtn]

This may not be the best place to discuss Morgan Sindall but I have been mulling it over as a possible replacement for some of my tobacco holdings. Like the sound of it; the culture looks good and I assume the CEO is part of the founding family?

Dod

I'll carry on the conversation over on the Company News board.
viewtopic.php?f=94&t=28068&start=20

So you consider it off topic here yet chose to move the discussion to an alternative board where it is definitely off topic.

Why make extra work for the site moderators?

[Dod101]

I'll carry on the conversation over on the Company News board.
viewtopic.php?f=94&t=28068&start=20

So you consider it off topic here yet chose to move the discussion to an alternative board where it is definitely off topic.

Why make extra work for the site moderators?

The mods in this case seem very relaxed about it although I agree that bluedonkey’s comments are not Company News.

But does it really matter?

Dod

[tacpot12]

As an income investor, as well as large holdings of JGGI and CTY (and numerous other ITs) , I also hold a large amount of IUKD. This is an iShares EFT that has served me well. Yield has been an average of 5.8% over the last five years, and cost is better than most of my ITs (at 0.4%).

[TUK020]

1. Newcastle Building Society PIBS 24% of liquid family investments. Reason: Value increased from previous smaller holding, yield is still a reasonable 7.3%. Will gradually reduce when price looks toppy or for cashflow.

2. Long FTSE futures 8% (leveraged). Reason: Bullish UK stocks. Need leverage because of above large position. UK stocks must be unbelievably cheap now. Can't understand why everyone hates them.

3. Bank of Ireland Group Ords 8%. Reason: Bullish UK and EU banks. Growth from previous smaller holding. Banks will continue to hugely profitable and over-capitalised. Everyone hates them or is bored of them. Even holders "don't know how they will ever make a profit" [paraphrased comment from 2020]. I've top-sliced 20% of the holding over the past two years. Will see how things evolve.



GS

Interesting combo.
What vehicle do you use for leveraged FTSE futures?

[GoSeigen]

1. Newcastle Building Society PIBS 24% of liquid family investments. Reason: Value increased from previous smaller holding, yield is still a reasonable 7.3%. Will gradually reduce when price looks toppy or for cashflow.

2. Long FTSE futures 8% (leveraged). Reason: Bullish UK stocks. Need leverage because of above large position. UK stocks must be unbelievably cheap now. Can't understand why everyone hates them.

3. Bank of Ireland Group Ords 8%. Reason: Bullish UK and EU banks. Growth from previous smaller holding. Banks will continue to hugely profitable and over-capitalised. Everyone hates them or is bored of them. Even holders "don't know how they will ever make a profit" [paraphrased comment from 2020]. I've top-sliced 20% of the holding over the past two years. Will see how things evolve.



GS

Interesting combo.
What vehicle do you use for leveraged FTSE futures?

As noted, it's a result of price growth more than deliberate allocations of those proportions.

I use IG Index spread bets for leveraged trades, including index futures (KID). Given the inverted yield curve I'm leary of this trade but have stuck to it regardless. It'll look pretty stupid if the FTSE doesn't move much, more sensible as yield curves normalise.


GS

[MrFoolish]

As an income investor, as well as large holdings of JGGI and CTY (and numerous other ITs) , I also hold a large amount of IUKD. This is an iShares EFT that has served me well. Yield has been an average of 5.8% over the last five years, and cost is better than most of my ITs (at 0.4%).

I think the 0.4% fee for IUKD is way too high, given it has a mechanical share selection. And its long term capital performance has been woeful. They should be charging less than 0.3% IMO.

[Adamski]

50% world trackers, 50% defensive - like to be well diversified. Been investing 6 years, had losses first year in 2018, flash crash 2020 and losses 2022. In between good years Found 2020 crash quite scary lost 20% in a week. Put me off taking too much risk.

Does it really matter which company long term as long as keep to a strategy? Want a slow and steady ride, not trying to beat the market.

[LooseCannon101]

My portfolio (ISA, GIA) is incredibly simple - 99% in F&C Investment Trust (FCIT) and 1% in cash.
FCIT owns stakes in over 350 individual companies, is highly diversified, lowly geared and has a great long-term track record - 155 years.
It is effectively a 'one-stop shop'. This phrase was used by our late chairman - Simon Fraser, when asked what was the trust's unique selling point.

One would need a large portfolio to live on the income from FCIT's 1.4% yield.

V8

I agree that the yield isn't great, but I look for total return, compounding over the long term. Why make investing complicated? Could I do better by chopping and changing?

I have made a conscious decision to only invest in one trust as it is easy to follow all the regulatory news e.g. director holdings and discount, and also speak to the fund manager, Paul Niven, each year at the AGM. I once had a conversation with the late chairman, Simon Fraser, who asked me why I had invested practically all my life savings in FCIT. I can't remember if I used the exact phrase 'one-stop shop' but that was effectively my reply.

[88V8]

One would need a large portfolio to live on the income from FCIT's 1.4% yield.

I agree that the yield isn't great, but I look for total return, compounding over the long term. Why make investing complicated? Could I do better by chopping and changing?

Better... well, FCIT has not outperformed its AIC sector but neither has it been mediocre.
Some people enjoy investing as a hobby and some just want enough to power their lives. If you are content with your choice, then you have done the right thing.
More than enough is not necessarily better.

V8

[Lootman]

UK stocks must be unbelievably cheap now. Can't understand why everyone hates them.

The problem is that UK stocks have been "unbelievably cheap" for years now. You could have made that same statement 5, 10 or 15 years ago, and the under-performance just carried on.

For example the FTSE-100 has doubled since its low in the financial crisis 15 years ago. Not bad, you might say. But the S&P 500 is up seven-fold in that same time period. Buying the UK market just because it is "cheap" has been a disastrous strategy and an expensive mistake. Has something materially changed?

[Dod101]

One would need a large portfolio to live on the income from FCIT's 1.4% yield.

V8

I agree that the yield isn't great, but I look for total return, compounding over the long term. Why make investing complicated? Could I do better by chopping and changing?

I have made a conscious decision to only invest in one trust as it is easy to follow all the regulatory news e.g. director holdings and discount, and also speak to the fund manager, Paul Niven, each year at the AGM. I once had a conversation with the late chairman, Simon Fraser, who asked me why I had invested practically all my life savings in FCIT. I can't remember if I used the exact phrase 'one-stop shop' but that was effectively my reply.

That to me would be a very risky strategy, much too risky for me. Even ITs fall by the wayside from time to time and certainly their fund managers do. I would need at least four generalist trusts to feel at all comfortable, however much of a one stop shop FCIT might be.Still I suppose you are not relying on it for income but how would you feel about a significant decline in its value if say the fund manager had to retire unexpectedly?

Dod

[Lootman]

I agree that the yield isn't great, but I look for total return, compounding over the long term. Why make investing complicated? Could I do better by chopping and changing?

I have made a conscious decision to only invest in one trust as it is easy to follow all the regulatory news e.g. director holdings and discount, and also speak to the fund manager, Paul Niven, each year at the AGM. I once had a conversation with the late chairman, Simon Fraser, who asked me why I had invested practically all my life savings in FCIT. I can't remember if I used the exact phrase 'one-stop shop' but that was effectively my reply.

That to me would be a very risky strategy, much too risky for me. Even ITs fall by the wayside from time to time and certainly their fund managers do. I would need at least four generalist trusts to feel at all comfortable, however much of a one stop shop FCIT might be.Still I suppose you are not relying on it for income but how would you feel about a significant decline in its value if say the fund manager had to retire unexpectedly?

FCIT invests in many of the same big names as other generalist ITs. So if it collapsed in value that would be because Apple and other large international shares have collapsed, and that would affect the other big ITs as well. There is a lot of overlap of holdings.

I do not have a lot of use for generalist ITs but I do use index funds which, again, can be a one-stop shop.

[GoSeigen]

UK stocks must be unbelievably cheap now. Can't understand why everyone hates them.

The problem is that UK stocks have been "unbelievably cheap" for years now. You could have made that same statement 5, 10 or 15 years ago, and the under-performance just carried on.

I didn't make the statement five years ago though, I made it now.

For example the FTSE-100 has doubled since its low in the financial crisis 15 years ago. Not bad, you might say. But the S&P 500 is up seven-fold in that same time period. Buying the UK market just because it is "cheap" has been a disastrous strategy and an expensive mistake. Has something materially changed?

I didn't buy the FTSE100 15 years ago -- though I did close out a lot of short positions in individual stocks (in Jul 1019). I bought gilts and bank bonds 15 years ago. I started buying FTSE futures in 2020 after the COVID correction. I've been short S&P500 forever but reducing the short position on the dips, with a huge covering purchase in 2018, amongst others.

I can't actually change the past and wouldn't because the returns have been stellar. Certainly not a disastrous strategy or expensive mistake.

That is all the rear view mirror. I invest for the future not the past.

Has something materially changed? Yes. Two decades have elapsed. My hair is grey. My kids have been born and grown up. Gilt yields have been run all the way down to negative levels. The UK has been shafted for 13 years by a hapless, economically clueless series of governments who have borrowed extravagantly and monetised much of it. Globalisation has run its course. Inflation is back.

Two decades. And now I'm ready to buy the FTSE. Clearly many investors think that will be a mistake as the past extrapolates seamlessly into the future. I'm quite content to take the other side of their trade.

GS

[MrFoolish]

I've been short S&P500 forever but reducing the short position on the dips, with a huge covering purchase in 2018, amongst others.

I can't actually change the past and wouldn't because the returns have been stellar. Certainly not a disastrous strategy or expensive mistake.

It sounds like you are claiming you can (or at least could) time the US market? Or are you saying your US holdings were insignificant and thus minimised your shorting mistake?

[Lootman]

I've been short S&P500 forever but reducing the short position on the dips, with a huge covering purchase in 2018, amongst others.

I can't actually change the past and wouldn't because the returns have been stellar. Certainly not a disastrous strategy or expensive mistake.

It sounds like you are claiming you can (or at least could) time the US market? Or are you saying your US holdings were insignificant and thus minimised your shorting mistake?

That seven-fold increase in the S&P 500 over 15 years works out at about 14% compounded annual growth (before dividends and FX gains, so maybe 16% or 17% with that). If anyone was short that index for all of the same time period then it is hard to see how that could lead to "stellar" returns in the way that being long has.

Shorting stock markets is usually tactical - to hedge against short-term losses. As a long-term strategy it is expensive and runs up against the long-term tendency for markets to rise. I have sometimes hedged short-term over say the end of a tax year, but not as a secular or directional bet. And I would use options to define my risk and loss.

[tjh290633]

I agree that the yield isn't great, but I look for total return, compounding over the long term. Why make investing complicated? Could I do better by chopping and changing?

I have made a conscious decision to only invest in one trust as it is easy to follow all the regulatory news e.g. director holdings and discount, and also speak to the fund manager, Paul Niven, each year at the AGM. I once had a conversation with the late chairman, Simon Fraser, who asked me why I had invested practically all my life savings in FCIT. I can't remember if I used the exact phrase 'one-stop shop' but that was effectively my reply.

That to me would be a very risky strategy, much too risky for me. Even ITs fall by the wayside from time to time and certainly their fund managers do. I would need at least four generalist trusts to feel at all comfortable, however much of a one stop shop FCIT might be.Still I suppose you are not relying on it for income but how would you feel about a significant decline in its value if say the fund manager had to retire unexpectedly?

Dod

There is always the approach taken by Alliance and Witan, of having several corporate managers, each with a defined remit. They do hire and fire occasionally. F&C do use others for private equity investment, for example. Maybe as Paul Niven nears retirement, they might use the other approach.

TJH