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Harry Trout
Posted: 03 April 2023 10:19:00(UTC)
#161

Joined: 08/06/2014(UTC)
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Good morning all, here are my transactions for March

March 2023 Summary

Quite a busy month !! I've posted some of these thoughts elsewhere recently but, to try to summarise, this is what I think I am trying to do:

1. "Win by not losing" (i.e. paying greater attention to risk management)
2. Prefer Passive over Active
3. Think more about what headline asset allocation I want to reduce volatility (useful Citywire threads on the 60:40 portfolio have made me think harder about this)
4. Focus on reducing costs and being more efficient

I'm now analysing holdings each month between equities and non equities to start to monitor where I am in the 60:40 sprectrum. After some big position reductions in Apple and Microsoft I am currently 48% Equities. Non equities are currently actual cash, gilts, money management funds and gold.

I don't know where I will end up in terms of allocation but I'm currently happy to forego some return for reduced volatility.

And here is the performance of the tech heavy portfolio of individual stocks:

SP 0323

After heavy selling recently I am currently 30.9% cash in the Share Portfolio which I will be looking to put to work.

Cheers

Harry
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Chalky W on 03/04/2023(UTC), Sheerman on 03/04/2023(UTC), Sara G on 03/04/2023(UTC), Jesse M on 03/04/2023(UTC), mdss68 on 03/04/2023(UTC), Robin on 03/04/2023(UTC), dlp6666 on 04/04/2023(UTC), gillyann on 04/04/2023(UTC), Raj K on 24/04/2023(UTC), Ben's dad on 24/04/2023(UTC), Vince. on 24/04/2023(UTC), Mr GL on 25/04/2023(UTC), Markkus on 25/04/2023(UTC), Vital Signs on 05/06/2023(UTC), Old Scientist on 04/08/2023(UTC)
Sara G
Posted: 03 April 2023 11:55:32(UTC)
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Thanks for sharing, Harry. I like the way you have set it all out, especially the conviction level. I'd not thought of adding this element myself - I make the assumption that every decision needs to be backed by high conviction, but perhaps not in these (more) uncertain times. I think that's a good idea for portfolio analysis as well as transactions, so I may have to steal your format!
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Harry Trout on 03/04/2023(UTC), Mr GL on 25/04/2023(UTC), Sheerman on 01/05/2023(UTC)
Harry Trout
Posted: 24 April 2023 08:32:27(UTC)
#163

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Sara G;263096 wrote:
Thanks for sharing, Harry. I like the way you have set it all out, especially the conviction level. I'd not thought of adding this element myself - I make the assumption that every decision needs to be backed by high conviction, but perhaps not in these (more) uncertain times. I think that's a good idea for portfolio analysis as well as transactions, so I may have to steal your format!

Thanks for your comments Sara

It's a work in progress and whilst I really like the idea of position sizing rules I'm wary of damaging returns by not letting winners run.

For example, I've just reduced Apple and Microsoft quite significantly yet these two stocks have been the stars of my portfolio, by a distance actually.

And so if the naysayers are right and we do see a (say) 20% drop in the market in the next year or so then I could see me buying back some Apple and Microsoft if the fundamentals were ok at that time.

In other words I don't think I will be too hard and fast about the 10% upper cap on position size.

Tim D occasionally refers to the janitor story which resonates a lot with me, particularly the Tony Peterson style messaging around buying companies that you use and can easily understand.

The janitor apparently invested in such companies and never sold, this video tells the story in 10 minutes and there is plenty in there that suits my personality and investing style .....

The Janitor Story - A Short Video

And then of course there is the Diageo-loving Grahame Pincock, a school teacher from Glasgow

Grahame Pincock

Cheers

Harry
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Thrugelmir
Posted: 24 April 2023 09:11:48(UTC)
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Harry Trout;265174 wrote:

And so if the naysayers are right and we do see a (say) 20% drop in the market in the next year or so then I could see me buying back some Apple and Microsoft if the fundamentals were ok at that time.



There was a time when Microsoft was considered a value rather than a growth stock. The shares could be purchased on a PE of around 8x -9x.
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Harry Trout on 24/04/2023(UTC), Dan L on 24/04/2023(UTC)
Raj K
Posted: 24 April 2023 10:34:56(UTC)
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Also the UPS guy who amassed 70million buying stock in UPS

Theodore Johnson worked for UPS and never made more than $14,000 a year and yet, in his old age, was worth more than $70 million. When he said he had no money to save, a friend told him that if he were taxed, the money would be taken out of his account and he’d never see it. So he created a tax for himself to make him wealthy. Even though he made little money, he took 20 percent of his money and it went straight into an investment account. Over more than five decades, that compounded to make him $70 million
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Harry Trout on 24/04/2023(UTC), Johan De Silva on 24/04/2023(UTC), dlp6666 on 24/04/2023(UTC), Chalky W on 01/08/2023(UTC)
Dan L
Posted: 24 April 2023 12:24:13(UTC)
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Thrugelmir;265177 wrote:
Harry Trout;265174 wrote:

And so if the naysayers are right and we do see a (say) 20% drop in the market in the next year or so then I could see me buying back some Apple and Microsoft if the fundamentals were ok at that time.



There was a time when Microsoft was considered a value rather than a growth stock. The shares could be purchased on a PE of around 8x -9x.


At that time though Microsoft was a bit of a dinosaur and had failed to come up with anything new/exciting for years. Nowadays it is the worlds biggest cloud company and still growing. I doubt we will see valuations like that again for a while.
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Harry Trout on 24/04/2023(UTC)
J-san
Posted: 24 April 2023 13:23:54(UTC)
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https://citywire.com/fun...ai-opportunity/a2415057

article on MSFT on Citywire today, quote:

The growth of Microsoft’s commercial cloud revenue has been nothing short of astonishing in recent years. In 2015, it accounted for just 6% of total revenues. At the end of 2022, it was almost half.
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Raj K on 24/04/2023(UTC), dlp6666 on 24/04/2023(UTC), Harry Trout on 24/04/2023(UTC), Dan L on 24/04/2023(UTC), PW2021 on 25/04/2023(UTC)
Thrugelmir
Posted: 24 April 2023 14:12:32(UTC)
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Dan L;265183 wrote:

At that time though Microsoft was a bit of a dinosaur and had failed to come up with anything new/exciting for years. Nowadays it is the worlds biggest cloud company and still growing. I doubt we will see valuations like that again for a while.


Valuations ultimately have to be justified by actual profits. Not purely perceptions. Unsurprisingly much of the corporate world is focussing on overhead cost reduction. Nor is growth is likely to remain as buoyant in the sector as competition for business increases. Then there's the small matter of the energy cost of running these data centres.

I doubt we will see more recent broad company valuations at such extreme levels again in our lifetimes. That era has past.
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Harry Trout on 24/04/2023(UTC), DIY Investing on 24/04/2023(UTC)
Harry Trout
Posted: 01 May 2023 10:24:10(UTC)
#169

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Morning all, here is a summary of my transactions for the month

Apr 23 Summary

Continuing themes for 2023:

1. Bearish, win by not losing
2. Passive over Active
3. Less tech, less concentration, more large cap dividend paying compounders

As at 30 April, I remain 48% in equities, the balance being in cash, gilts, gold, money market funds and now ERNS.

And here is the performance of my portfolio of individual stocks which represents 25.8% of my HL account currently:

0423 SP v VWRL

Within the share portfolio subset, 33.8% is currently in cash and ERNS from recent US tech sales. Normal cash levels average < 10%.

Plenty to deploy in the coming months, my favourite ideas are currently Visa, McDonalds, United Health and potentially new investments in Costco, Proctor & Gamble, Johnson & Johnson, Coca Cola. If Diageo dropped a little further I would look closely at a top up there too.
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Markkus on 01/05/2023(UTC), dlp6666 on 01/05/2023(UTC), Fife Clive on 01/05/2023(UTC), Jimmy Page on 01/05/2023(UTC), Robin on 01/05/2023(UTC), SF100 on 01/05/2023(UTC), Newbie on 01/05/2023(UTC), Chalky W on 01/08/2023(UTC)
Fife Clive
Posted: 01 May 2023 11:57:48(UTC)
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Looks good Harry, only comment from me, why are you buying Gilts in ISA/SIPP while buying risk assets and MMFs in GIA?

Gilts are exempt of tax on capital gain (the driver of most returns in short dated gilts these days). This is a huge freebie from the state vs. paying tax on interest/dividends/gains in other unsheltered assets, you may be giving it up unnecessarily
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3 users thanked Fife Clive for this post.
Thrugelmir on 01/05/2023(UTC), Harry Trout on 01/05/2023(UTC), Tim D on 01/05/2023(UTC)
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