Your thoughts on this portfolio

So ive been investing now for around 3 months and I’m curious what feedback might be given on my current portfolio distribution:

A few notes:

My aim has been to have diversity in my exposures informed by what seem to be fair prices under current circumstances based on weighted consideration of the businesses overall and previous, pre crash performances and speculation on long term viability.

I’m also currently in the process of rebalancing the portfolio to have a 40/60 split of ETF, Trust and Trackers / Stocks

WTI Crude Oil was Bought near the floor of the drop currently standing at plus 75% overall having taken half my original investment out as a loss limiter earlier and I think there’s more to go on it but it isn’t intended to be a mainstay of my portfolio. I simply saw the potential oppertunity and took my risk.

TSCO is currently being considered for dump with the funds from that to either move to B&M (BME), Accor (AC) or to the wisdom tree cloud (KLWD) wtf

Finally my current all time P+L sits at 11.6% and find myself regularly matching the market within +/-0.3-0.5% with more frequently positive results then negative in that regard.

Hopefully that gives some insight to the portfolio overall to allow for some feedback but if there’s other questions please do ask :blush:

I don’t want to be rude…but why these companies? What’s the actual goal?

Tesco & B&M are just a bit meh. I don’t see market beating growth in either year on year.

Lloyds has been a dog since I started investing after 2008 and definitely will never beat the market consistently.

Microsoft is overvalued, but I see the appeal.

Frontier Dev has potential to beat the market if the studio continues to grow.

Sage had had its best years.

EasyJet I can’t see beating the market long term and the airline industry is in dire straits.

Accor I suppose could be flipped on a decent short term return.

I don’t buy oil but see the appeal and you’ve done well.

SMT is a good pick and has historical evidence of beating the market as is KLWD.

FTSE 100 is a dog index.

So it reminds me of my first portfolio, well intentioned, but didn’t really cut it.

(Sorry, I like the way you presented it though)

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Undeniably you’ve done well. I’m interested in the bit where you say you think these are priced well for current situation. How do you arrive at that conclusion with Microsoft?

No advice to give, a few of the stocks on there I would not have bothered with, but each their own.

Your up 11%, which is 11% better than the highstreet savings are offering.
Good going, just stay looking for deals and be open to change, which you are.

:v: Well done - keep doing what you are doing and don’t be discouraged.

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I have Tesco myself, it’s a low volatility share, which has its place, the dividend used to be nice but I don’t know the situation at the moment, plus when they report their earnings from the March period, it’s going to tick up I think.

Lloyds is relatively cheap, but going nowhere fast, I just day trade now, made a nice bonus yesterday when it jumped from 29.70 to around 30.30 in a quick time.

Microsoft will grow, and again be fairly tepid in regards to volatility.

15% in EasyJet, or any airline, scares me, but where there is risk, there is reward

B&M is a nice share at the moment, I had some myself last month but took my profit around earnings time.

I don’t know much about the others, so overall quite solid I think.

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Hi SteelCityInvestor,

Before giving you my thought I have cut and pasted a section of another post by @Joey_Fantana. Which I think is great and worth you bearing in mind. (I was hoping to link the post but not sure how to do it. )

“1. Know why you’re investing this way. Is it for a quick win, starting a long term investment plan (early retirement), passive income? If you don’t have a goal, maybe give that, some thought and always come back to it, review it, make sure you’re happy with how your current strategy is working towards it.”

Based on the above I think your portfolio is overweighted towards IT shares (around 60% ) with some I presume are speculative investment such as Easyjet and WTI Oil. Which may be due to your confidence in the future of the IT sector as well as your risk profile.

However I noted from your notes:

“My aim has been to have diversity in my exposure”

I would query if it is diverse as while the IT sector is experiencing alot of growth during this pandemic, you cannot predict what may happen in the future. Legislative changes/new competitors etc However if you have done your research and are still confident and happy with the allocation, then carry on.

I am not sure if I came across well and made my point. But need any clarification , fell free to reply.

Not a problem in you selling Tesco to buy B &M as Tesco should already be part of the FTSE100 iShare ETF.

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Don’t apologise that’s why I asked for feedback.

So to answer why on the stocks you mentioned:

Lloyds has droped 50% on pre crash and I think has a potential to come back up. At the time I started with them I didn’t favour other banks as I felt they were a little too unevenly exposed or there are moral reasons for not wanting to be directly investing in them (eg: HSBC’s actions in Hong Kong). It’s history as a good dividend payer and relatively cheep price pulled me in and I’ve put a bit more in recently to average down to here I’m sitting around 29.9p a share.

Tesco and BME were some of my very first pics. Bought mainly on speculation as they were the only business operating relatively freely at the time. Tesco was based on strong financials at an uncertain time with all indicators being they would weather the storm well it was also bought with a mind of gaining some exposure to consumer retail in a brand that I felt was strong in recognition.

BME however was based upon its expansion plans and seemingly financials alongside a lowered price. In addition, lockdown forced many people to shop outside their usual comfort zones and become exposed to B&M for food shopping at discounts they may miss elsewhere leading to an uptick in sales. It currently sits around +22% for me

Microsoft is a funny one. I’ve yet to decide if I’m going to flip that at the end of the month for the reason you mention. Comparing Microsoft to its competitors I’m not so sure that it is over valued any more than the NASDAQ is as a whole. I think that s market dip is to come but that it may well be worth riding out. Microsoft also have some large developments In their pipeline. Azure Cloud while not as prevelent as AWS provides for strong infrastructural components while cloud based services of theirs such as the 365 suite etc put them on for strong recurrent personal and business clients. Additionally the new Xbox console releases at the end of this year and their E3 equivelent keynote occurs on the 23rd which will introduce the performance, price and games for the console. Many of which are Microsoft game studio games and accessable by their game pass reccurent revenue stream. While the console may be a loss leader there’s speculation of them to be coming in lower priced as a loss leader to gain in the console leadership which would put them in good footing over the next 5-10 years in that sector. In addition, their key announcement titles in this field were industry changing historically and have high recognition as well as being dependant on their Azure infrastructure for both development and ongoing support.

Frontier Dev is a pet of mine. I admit my investment here is in belief in the company overall rather then sound financials (though I think they have that also). They have signed multi-year IP deals with both F1 and Games Workshop leading to increased throughout over the next 4 years and have other titles in the works. They have had market upsetting titles in the past with their park and city simulation games usurping market leaders as the go to title in the field with 3 strong Unique IP’s that have DLC and other recurring revenues. Their investor documents indicate a strong future here and in addition to my belief I saw nothing but positive signals.

Sage is another I caught in the drop and I think has the potential to come back up, they were also making positive moves to support businesses through shutdown with deferment of payments which while yes will hurt the bottom line short term has seemed to gain themselves good favour from SME’s who have been fighting somewhat with other payment providers. I think that goodwill may well translate long term and they seem to have a strong set of financials that mean theyre secure mores then some others. Again, the key for me with them was diversification looking to extend my exposure and make me less prone to single sector drops in the market.

EasyJet was another I got in near the floor. Prior to that I wouldn’t have touched airlines but I saw the potential for growth and rolled my dice. The main factor making me take them over other operators was they swift action at the start of the pandemic to secure themselves. Despite some agrevation in the board they made clear they could withstand 9 months with no flights without need for assistance which out them in far better standing then other operators. I honestly think this is a stock that has some strong potential as normality starts to resume.

Accor I bought later then easy but I feel they have a decent propsective short to midterm return potential as they are lagging currently due to the downturn of tourism and travel that will start to ease as the world restarts.

Oil I already noted

SMT and KLWD are based on strong historical performances and their potential for future up tick particularly as cloud computing and remote working has shown its benefits due to Corona.

As for the FTSE, I think realistically it will only go up and return to where it once was and since it tracks the market as a whole I’m ok with a relatively small pot of it just as an addition though as I build it out I may split 10% of the overall portfolio away from stocks to being distributed into a pie holding FTSE, S&P and others.

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So long as you have conviction in your picks that’s all that matters.

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My background is in IT infrastructure and Big Data so I am overexposed somewhat there as it where I understand the risk better than other areas. While I’m over exposed there I have attempted to do so in a way that hits s few different areas of the technology field spreading myself somewhat.

Also re knowing why I’m investing in kind of doing so for a combination of s longer term nest egg thst will grow faster then a savings account which can be drawn down in the future for debt clearing, house purchases or much later on retirement. My portfolio represents about 25% of my capital but on paper has gained in 3 months what my savings wouldn’t take 3+ years to achieve. Long term a passive income increase is something that attracts me but building it in such a way is well beyond my current capabilities due to limited capital in hand as I’m finishing our my studies.

Firstly I think you are doing the right thing. You have a plan and my feedback would be to stick to your plan if it is working but be flexible enough to change things around if anything changes. What anyone else thinks about your portfolio is irrelevant. Most experienced investors and fund managers struggle to achieve the returns you’re seeing so far and your goal should be to achieve those results consistently. Never use the market as your benchmark, trying to beat will only lead to you taking unnecessary risk and in the long run you will not win. The majority of fund managers never beat the market anyway. Just keep doing what you are doing and just tinker around the edges whenever necessary.

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Don’t think I need to say much because the feedback has been good so far, but I just wanted to say I love the look of this pie! Very clean
This looks quite high risk though, I would probably add a few more blue chips to lower the risk if I were you, or buy a total market index. Just a lot of weight in some Meh stocks, so I’d like to get that reduced if I were you

Oh I understand that what others think is “irrelevant” burn I do think it’s worthwhile hearing different opinions as you may be exposed to a consideration that you hadn’t made from someone with an alternative perspective.

I have a few friends who have invested far longer then I have who looked at my oil and easyJet picks with a balk only to now be saying they wish they had jumped on. But despite that, their feedback helps me pin down where to go out of a few options of different companies in airlines through discussions of some considerations I had missed.

As for using the market as a bench mark I think it’s a double edged sword. It shouldn’t.be used with the aim of “beating” the market all the time every time. Hell, there’s some in there that have dropped sinc do picked them up but I believe in their long term (accor for example). But i do think it can be usefull to know how your doing alongside the market in order to know if you have something that’s dragging you down to a significant degree that it’s worth a rethink.

Is there any in particular that you are refering to with high risk/meh stocks?

I’m also open to suggestions on some good blue chips that would compliment my picks so far for me to consider if you have any.

A few people have mentioned the layout of the pie. It’s managed through an android app (I don’t have iOS so can’t check if it’s there) called “my stocks portfolio”

They allow for custom tagging of symbols for creating various different Pies, I’d show another example but I’m afraid they’re in dissarsy right now and need some clean up haha

I’d like to weigh in also, the market choices you make depend totally on the market conditions.
Some people like “steady-eddy” brands that just plod on and don’t rock the boat much (Buffett), whereas others like to chance emerging tech and take risks (Ark Investments Cathy).

Both have merits, both have risks.

I’d focus in on how you see the market developing, maybe you think spending will return in bulk leading to xmas - then go for more cyclical stocks rather than defensive.

A lot of good advice in here, but as always mentioned go with your gut. :+1:

That’s almost the exact opposite of what Buffett does. You should read more about Benjamin Graham and Buffetts philosophy because it isn’t this.

If buying businesses that “plod along” equates to beating the S&P comfortably over three decades…

I meant the likes of campbell soup and coke etc. which buffett was a big believer in, steady companies which were simple businesses to understand etc… Those being more defensive in nature.

My point is, no one can beat the market consistently. You have achieved a great result in 11 %. You should use this as your benchmark and aim to replicate it year after year irregardless of what the market is doing. As you know the market goes up and down so if you are consistent then in the long run you will beat the market anyway. The most important thing is to manage your risk by identifying sectors that are not performing so well and avoiding them.

Well I don’t agree with this either, he didn’t buy them because they were a steady business. He bought them because they were wildly undervalued, as is his ethos which he and Munger inherited and developed from Benjamin Graham.

He’s made 7 times his original investment back in dividends alone. The share price has risen significantly since then.

Tomatoes … Potatoes … you get what I was on about. :rofl:

My main takeaway - defensive brands vs cyclical. Market conditions decide the choice.

I have read your other replies as well and it looks as though you know what you are doing and working in the IT industry itself helps as well. Nothing more to add from the other feedback.