My Strategy has remained the same since the collapse of the stock markets in 2008, which is to buy on dips. The main reasons I remain long are:
1. Valuations look attractive long term, low P/Es and high dividend yields vs. cash and govnt bonds
2. Dividends 2 or 3 times the return of cash and government bonds which is no more than 3%
3. Bernanke will print money no matter what it takes, to put growth into the economy. This will create inflation and stocks are the best place to be when inflation picks up. Those investors holding money in cash are received a negative return after inflation at the moment
4. Trillions of dollars/£s of hedge fund and pension’s money is sitting on the sidelines even after the recent rally.
However I do know that the stock markets can fall, as well as rise and therefore I have a diversified strategy. The main pillar of my portfolio is high income shares like Vodafone, AstraZeneca, BP, Glaxo, United Utilities, National Grid. I hold a lot of safe utility stocks for the income and capital preservation. I also have alot of corporate bonds for high income of up to 8% gross.
Then on top of this I hold economic sensitive stocks, such as the banks and insurance companies, which are significantly undervalued, especially Lloyds Banking Group. I am also long China, Russia, emerging markets for the long term.
Recently I have increased cash as a proportion of my Portfolio, ready to buy on dips in a correction in the stock market. Averaging down is an important part of increasing returns over the long term.
Tuesday, 27 March 2012
Wednesday, 20 July 2011
Still long BskyB, added more to Lloyds at 42.7p
I am going to stay in Bskyb(they are currently £7.42) from £6.96. £7 looked like support to me and now there is talk of a special dividend of up to £1.30, as they generate so much cash.
I have now added to my holding in Lloyds at 42.7p. I have taken a beating on them this year but they are trading well below even book value, due to the Europe debt fears. My target is 50-55p before I think about selling. This is a very risky trade to be in but I am a contrarian and go against the trend, when I think a company is undervalued.
I have now added to my holding in Lloyds at 42.7p. I have taken a beating on them this year but they are trading well below even book value, due to the Europe debt fears. My target is 50-55p before I think about selling. This is a very risky trade to be in but I am a contrarian and go against the trend, when I think a company is undervalued.
Monday, 11 July 2011
Friday, 1 July 2011
The bull market remains intact (for now)
Hi all,
Sorry I have not blogged for a while. I am still a buyer of dips. The long term S&P bull market channel is still intact, valuations are not stretced and I have been adding longs into the dip. Particularly still favour high yield stocks like Vodafone, AstraZeneca, National Grid etc. But I have also been adding holdings in growth sectors, mainly large caps in the US, like Cisco and Intel.
I will update further over the coming week
Sorry I have not blogged for a while. I am still a buyer of dips. The long term S&P bull market channel is still intact, valuations are not stretced and I have been adding longs into the dip. Particularly still favour high yield stocks like Vodafone, AstraZeneca, National Grid etc. But I have also been adding holdings in growth sectors, mainly large caps in the US, like Cisco and Intel.
I will update further over the coming week
Saturday, 16 October 2010
Buy on dips
Hi all,
The market has continued to rally strongly since my last post. I am still a buyer of dips but most of my investment went in, when the ftse was 4800 to 5000 and the Dow 9800 to 10000. As you can see from the chart below, I think we are in a bull market channel at the moment. And even though equities are starting to look overvalued in certain areas, money printing from the US and other central banks could push this market higher to the top of the channel above even 1300 on the S&P.
However from my own investment perspective, I become more cautious as we go higher. So far my investment portfolio is up 9%(after tax) YTD, vs. my cash holdings which are only going to make 2.5%. I want to protect my gains and look to buy on dips into shares that are undervalued by Mr Market.
I sold half of my BP holding at £4.40, as it became 7% of my portfolio - it rallied from £3 to £4.40. Although I think BP is a buy at its current price, I do now want to have all my eggs in one basket because that is where I have suffered in the past.
So I then bought HSBC, with the money from BP. I think they are undervalued and the strongest European bank. They have both growth in their core markets, mainly from Asia and they offer the prospect of growing their quarterly dividend payments. Of course there is still a risk the financial crisis will come back but I think they have the best chance of surviving a 2nd round, if it happens.
I have also invested more into Japan. This is my contrarian pick for the next few years. Japan shares are written off and have been for almost 20 years. But I think this is the time to buy. Everyone ignored gold and wrote it off and look now? This is why I buy when everyone else is selling.
I will update further in the next few weeks. Stay nimble and be careful out there. Do not risk more than you can afford to lose.
The market has continued to rally strongly since my last post. I am still a buyer of dips but most of my investment went in, when the ftse was 4800 to 5000 and the Dow 9800 to 10000. As you can see from the chart below, I think we are in a bull market channel at the moment. And even though equities are starting to look overvalued in certain areas, money printing from the US and other central banks could push this market higher to the top of the channel above even 1300 on the S&P.
However from my own investment perspective, I become more cautious as we go higher. So far my investment portfolio is up 9%(after tax) YTD, vs. my cash holdings which are only going to make 2.5%. I want to protect my gains and look to buy on dips into shares that are undervalued by Mr Market.
I sold half of my BP holding at £4.40, as it became 7% of my portfolio - it rallied from £3 to £4.40. Although I think BP is a buy at its current price, I do now want to have all my eggs in one basket because that is where I have suffered in the past.
So I then bought HSBC, with the money from BP. I think they are undervalued and the strongest European bank. They have both growth in their core markets, mainly from Asia and they offer the prospect of growing their quarterly dividend payments. Of course there is still a risk the financial crisis will come back but I think they have the best chance of surviving a 2nd round, if it happens.
I have also invested more into Japan. This is my contrarian pick for the next few years. Japan shares are written off and have been for almost 20 years. But I think this is the time to buy. Everyone ignored gold and wrote it off and look now? This is why I buy when everyone else is selling.
I will update further in the next few weeks. Stay nimble and be careful out there. Do not risk more than you can afford to lose.
Monday, 13 September 2010
"I am a huge bull on this country" - Warren Buffet
I`m still not yet able to share Warren Buffets enthusiasm for the future of the US stock market but I still believe that stocks are the better asset class to hold, whether or not there is a double dip or weak growth in the global economy. Government bonds are at yielding at near 30 year lows, at 2%, cash is no better but still shares can give you a yield of 5-6%, even with the latest rally.
Vodafone are a good example. I tipped them on this blog at £1.32. They are now £1.60 and their dividend is over 5%. that’s a total return of 26% currently, 12 times what you would get in cash!
One of my best tips on this blog is AVIVA, they are up 34% since I tipped them at £3.05. With the dividend on top, it’s near 40% return.
As we have seen my biggest mistake was BP. I have managed to reduce my avg buy price to £4.50 and still optimistic that they are undervalued and will sit tight for the long term. The oil spill was what I call a "black swan" event. It happens to every investor and this is why you need a strategy, to be able to cope with disasters like this.
This is why I never hold more than 5% in one investment, so in the unlikely event that BP had gone bust, I would have still had 95% of my Portfolio remaining.
YTD the investment portfolio is up 7.5% vs a 3% gain on the FTSE100. A couple of disappointing investments such as BP and absolute return funds, have held back the performance of my Portfolio but there is still 3.5 months of the year left and many of my holdings still look undervalued and overlooked by "Mr. Market"
GlaxoSmithKline, AstraZeneca, BP, Vodafone (the Big safe blue chips) particularly have further to run in my view....
Good luck all!
Vodafone are a good example. I tipped them on this blog at £1.32. They are now £1.60 and their dividend is over 5%. that’s a total return of 26% currently, 12 times what you would get in cash!
One of my best tips on this blog is AVIVA, they are up 34% since I tipped them at £3.05. With the dividend on top, it’s near 40% return.
As we have seen my biggest mistake was BP. I have managed to reduce my avg buy price to £4.50 and still optimistic that they are undervalued and will sit tight for the long term. The oil spill was what I call a "black swan" event. It happens to every investor and this is why you need a strategy, to be able to cope with disasters like this.
This is why I never hold more than 5% in one investment, so in the unlikely event that BP had gone bust, I would have still had 95% of my Portfolio remaining.
YTD the investment portfolio is up 7.5% vs a 3% gain on the FTSE100. A couple of disappointing investments such as BP and absolute return funds, have held back the performance of my Portfolio but there is still 3.5 months of the year left and many of my holdings still look undervalued and overlooked by "Mr. Market"
GlaxoSmithKline, AstraZeneca, BP, Vodafone (the Big safe blue chips) particularly have further to run in my view....
Good luck all!
Friday, 20 August 2010
BP and Severn Trent/Imperial Tobacco update
Hi all,
Although I don`t generally do this, I have resorted to some short term trading in BP, to bring my average buy price down. I sold some of my £4.22 holdings for break even a few weeks ago and have now just re - bought at £3.79. So I have 2 lots under £4 but offset against the ones I bought at £5.68 and £5, my average is £4.30. Although this was not the original plan, I am happy to hold BP for the long term at that price, looking for £5 again next year.
Severn Trent is now £12.85, from £13.41 when I sold. I am very happy I took some profits in the Portfolio. Never be scared to take profits, even on a good asset such as Severn Trent. Imperial Tobacco look good value and holding above the £18 support line currently, even as the market falls. A very good defensive asset to hold in times like these.
The world markets are very weak at the moment, as fears of a double dip continue to persist. My view is that equities, especially high yield ones look too cheap relative to other assets such as govt bonds, cash or property. Even with a double dip scenario, I think defensive companies such as GlaxoSmithline, AstraZeneca and National Grid with yields of 5-6.5% will outperform cash(with rates unlikely to go up anytime soon)
Just make sure you have a diversified Portfolio and "hold at least your age in cash". That is the absolute minimum weighting I would have in cash because you never know what black swan event is round the corner. Then if the market tanks further from here, I you will have cash remaining to buy into further weakness and average down your holdings for the long term.
Although I don`t generally do this, I have resorted to some short term trading in BP, to bring my average buy price down. I sold some of my £4.22 holdings for break even a few weeks ago and have now just re - bought at £3.79. So I have 2 lots under £4 but offset against the ones I bought at £5.68 and £5, my average is £4.30. Although this was not the original plan, I am happy to hold BP for the long term at that price, looking for £5 again next year.
Severn Trent is now £12.85, from £13.41 when I sold. I am very happy I took some profits in the Portfolio. Never be scared to take profits, even on a good asset such as Severn Trent. Imperial Tobacco look good value and holding above the £18 support line currently, even as the market falls. A very good defensive asset to hold in times like these.
The world markets are very weak at the moment, as fears of a double dip continue to persist. My view is that equities, especially high yield ones look too cheap relative to other assets such as govt bonds, cash or property. Even with a double dip scenario, I think defensive companies such as GlaxoSmithline, AstraZeneca and National Grid with yields of 5-6.5% will outperform cash(with rates unlikely to go up anytime soon)
Just make sure you have a diversified Portfolio and "hold at least your age in cash". That is the absolute minimum weighting I would have in cash because you never know what black swan event is round the corner. Then if the market tanks further from here, I you will have cash remaining to buy into further weakness and average down your holdings for the long term.
Wednesday, 11 August 2010
Another Defensive asset added
As soon as I sold Severn Trent I moved the money into Imperial Tobacco at £18.01.
You can see on the chart there is strong support at £18. It has a yield of 4.6% and is seen as very defensive. A re-rating such as the one that happened on Severn Trent, looks likely on this share over the next 6-12 months. They have been struggling so far this year and I thought this was a good time to enter, with the worries about growth effecting risk appetite among investors. They are likely to build stakes in more defensive shares that are undervalued such as this share.
You can see on the chart there is strong support at £18. It has a yield of 4.6% and is seen as very defensive. A re-rating such as the one that happened on Severn Trent, looks likely on this share over the next 6-12 months. They have been struggling so far this year and I thought this was a good time to enter, with the worries about growth effecting risk appetite among investors. They are likely to build stakes in more defensive shares that are undervalued such as this share.
Tuesday, 10 August 2010
Sold Severn Trent for 40% profit
This week I sold Severn Trent for £13.40 for 40% profit(as well as the final dividend). Bought at £9.60.
Although I believe they are a good long term investment, they have risen so much so fast and can see other shares that are now better value currently. The dividend is still good on Severn Trent but the capital gain might be limited unless there is a bid approach.
Although I believe they are a good long term investment, they have risen so much so fast and can see other shares that are now better value currently. The dividend is still good on Severn Trent but the capital gain might be limited unless there is a bid approach.
Monday, 9 August 2010
Buy low, sell high
Hi all, sorry I have not updated the blog for a while. It was a tough time in the correction. The FTSE 100 at one point was -18% since the start of the year, close to a becoming a technical bear market. Since the low in May we have bounced back strongly.
I have continued to buy on dips and increased my appetite for risk the lower we went. I added more BP to the Portfolio at £3.40 averaging down my other buys. I misjudged how bad the oil leak was and to be honest not happy with how BP communicated the situation. But now, I am where I am and still believe they are undervalued and will hold them for the long term and wait for the dividend to be restored.
However all my other buys into the dip are looking good. Aviva are up 27%, AstraZeneca up 14%, BT up 22%. I am also still doing very well on other high income shares in 2010, Severn Trent(+24% YTD) and United Utilities(+18% ytd).
My UK bank holdings are also doing very well and driving gains in the portfolio. Lloyds is up 50%, RBS up 76%, Barclays up 15%
Some of the shares struggling and holding back the Porfolio, are Glaxosmithkline (-14% YTD) and surprisingly Tesco (-7%). I think both of these are undervalued significantly and will bounce back. My 2 absolute returns & bond funds are holding back the portfolio’s gains as well. My Chinese and Japan funds are also not doing well so far this year but are good long term prospects.
However as I have always said, make sure you have a diversified Portfolio. Although the total gain in my Portfolio is lower than if I just invested in high risk stocks like the banks and miners, I am aiming for consistent profitability over the long term. As Warren Buffet says, rule no.1 Never lose money, rule no.2 – Never forget rule no.1
The stocks, bonds and shares Portfolio is up 5.5% YTD vs a 1% gain in the S&P 500 and 0.5% on the FTSE 100. I am happy with this given that BP is taking 1.0% points off my portfolio currently. On top of this I estimate my income will be around 3% at the moment, which would equate to 8.5% in total return for the full year. I am hoping that by the year end I can increase the 5.5% capital gain up to about 7% to give me a 10% gain overall in 2010.
Of course a lot of this depends on how the stock market does for the rest of the year. Forecasts vary from 4000 to 6000 on the ftse100. My estimate at the start of the year was 5800. I still believe equities are a better asset class to have your money than in cash or govnt bonds and will buy on dips into further drops in the stock market.
I have continued to buy on dips and increased my appetite for risk the lower we went. I added more BP to the Portfolio at £3.40 averaging down my other buys. I misjudged how bad the oil leak was and to be honest not happy with how BP communicated the situation. But now, I am where I am and still believe they are undervalued and will hold them for the long term and wait for the dividend to be restored.
However all my other buys into the dip are looking good. Aviva are up 27%, AstraZeneca up 14%, BT up 22%. I am also still doing very well on other high income shares in 2010, Severn Trent(+24% YTD) and United Utilities(+18% ytd).
My UK bank holdings are also doing very well and driving gains in the portfolio. Lloyds is up 50%, RBS up 76%, Barclays up 15%
Some of the shares struggling and holding back the Porfolio, are Glaxosmithkline (-14% YTD) and surprisingly Tesco (-7%). I think both of these are undervalued significantly and will bounce back. My 2 absolute returns & bond funds are holding back the portfolio’s gains as well. My Chinese and Japan funds are also not doing well so far this year but are good long term prospects.
However as I have always said, make sure you have a diversified Portfolio. Although the total gain in my Portfolio is lower than if I just invested in high risk stocks like the banks and miners, I am aiming for consistent profitability over the long term. As Warren Buffet says, rule no.1 Never lose money, rule no.2 – Never forget rule no.1
The stocks, bonds and shares Portfolio is up 5.5% YTD vs a 1% gain in the S&P 500 and 0.5% on the FTSE 100. I am happy with this given that BP is taking 1.0% points off my portfolio currently. On top of this I estimate my income will be around 3% at the moment, which would equate to 8.5% in total return for the full year. I am hoping that by the year end I can increase the 5.5% capital gain up to about 7% to give me a 10% gain overall in 2010.
Of course a lot of this depends on how the stock market does for the rest of the year. Forecasts vary from 4000 to 6000 on the ftse100. My estimate at the start of the year was 5800. I still believe equities are a better asset class to have your money than in cash or govnt bonds and will buy on dips into further drops in the stock market.
Monday, 7 June 2010
Portfolio update
Hi all,
Here is the latest update on my Portfolio. 2010 year to date(as at 7th june), my share Portfolio is down 0.9% on a like for like basis, if you include cash and look at my total Portfolio, the loss is 0.5%. This is ignoring income. The FTSE 100 is down 5.3% at its current value of 5115, so at the moment although my Portfolio has not risen so far this year, at least I have not lost much. At least the income continues to come in from my defensive high yield investments which will help “average up” my low income on cash.
Aviva is doing well since I bought at £3.05 as per the blog, up 7%. My water stocks are the strongest performers, Severn Trent and Untied Utilities are up 12% so far this year. RBS is my best performer up 45% YTD.
My worst investment so far in 2010 is BP (down 26% YTD). However at the start of the oil spill, I was underweight in BP, only 2% of the Portfolio. This was because they were rising very fast and I was worried about oil prices falling in a stock market correction, hurting BP. However it was a 1/1000 event, the deep water oil spill, that has caused the dramatic decline in the price. As we have headed lower, I bought at 5.70 thinking the leak would be capped quickly. Unfortunately things got a lot worse. As the price continued to collapse, I have added more at £5 and £4.20. This has brought my weighting in BP, to a hefty 5%, the maximum allocation I will risk in one investment.
My simple approach is to buy when others are fearful, hence the increased risk taken on BP. I don’t understand why people wait till the market is doing really well and start buying shares. I might buy too early but the fear of missing out is too great for me, to wait.
On my general strategy, overall I am still cautious and still overweight in defensive income shares but still have growth shares and funds for the longer term. I am worried about a further pull back in the stock markets but will continue to invest into this dip, for the long term.
Here is the latest update on my Portfolio. 2010 year to date(as at 7th june), my share Portfolio is down 0.9% on a like for like basis, if you include cash and look at my total Portfolio, the loss is 0.5%. This is ignoring income. The FTSE 100 is down 5.3% at its current value of 5115, so at the moment although my Portfolio has not risen so far this year, at least I have not lost much. At least the income continues to come in from my defensive high yield investments which will help “average up” my low income on cash.
Aviva is doing well since I bought at £3.05 as per the blog, up 7%. My water stocks are the strongest performers, Severn Trent and Untied Utilities are up 12% so far this year. RBS is my best performer up 45% YTD.
My worst investment so far in 2010 is BP (down 26% YTD). However at the start of the oil spill, I was underweight in BP, only 2% of the Portfolio. This was because they were rising very fast and I was worried about oil prices falling in a stock market correction, hurting BP. However it was a 1/1000 event, the deep water oil spill, that has caused the dramatic decline in the price. As we have headed lower, I bought at 5.70 thinking the leak would be capped quickly. Unfortunately things got a lot worse. As the price continued to collapse, I have added more at £5 and £4.20. This has brought my weighting in BP, to a hefty 5%, the maximum allocation I will risk in one investment.
My simple approach is to buy when others are fearful, hence the increased risk taken on BP. I don’t understand why people wait till the market is doing really well and start buying shares. I might buy too early but the fear of missing out is too great for me, to wait.
On my general strategy, overall I am still cautious and still overweight in defensive income shares but still have growth shares and funds for the longer term. I am worried about a further pull back in the stock markets but will continue to invest into this dip, for the long term.
Wednesday, 2 June 2010
The dangers of going against the herd
Well I have to hold my hands up here and admit that my BP investment has not gone to plan. Going against the herd can often be very risky but also lucrative over the long term. BP is now down 36% from its peak just before this oil crisis.
However I still believe that this investment can come good. I have therefore averaged down on BP again at £4.20. I would have rather waited for the March 09 bear market low of £4 or even £3.68 which was the Lehman Oct 08 low. If we get towards £3.68, I will have to consider one more entry, as I believe by this point, bidders will be circling BP. There are already rumours Shell and Exxon will be tempted to swallow BP.
This has now become quite a big bet that BP can still turn the situation around, cap the leak and continue to pay its high level of dividends, despite the huge costs of the cleanup.
But the key rule as ever is not to risk too much on one investment. Good performers such as AstraZeneca, Severn Trent and United Utilities, are offsetting the current weakness of BP in my Portfolio.
But just remember this; the key to making money in stocks is not to get scared out of them. Many people have sold out of the stock market through fear, just at the time when it’s better to be adding good quality shares to your portfolio. I can guarantee that if this market starts to recover again, all the analysts will come out saying buy shares, after they have gone up 10%!
However I still believe that this investment can come good. I have therefore averaged down on BP again at £4.20. I would have rather waited for the March 09 bear market low of £4 or even £3.68 which was the Lehman Oct 08 low. If we get towards £3.68, I will have to consider one more entry, as I believe by this point, bidders will be circling BP. There are already rumours Shell and Exxon will be tempted to swallow BP.
This has now become quite a big bet that BP can still turn the situation around, cap the leak and continue to pay its high level of dividends, despite the huge costs of the cleanup.
But the key rule as ever is not to risk too much on one investment. Good performers such as AstraZeneca, Severn Trent and United Utilities, are offsetting the current weakness of BP in my Portfolio.
But just remember this; the key to making money in stocks is not to get scared out of them. Many people have sold out of the stock market through fear, just at the time when it’s better to be adding good quality shares to your portfolio. I can guarantee that if this market starts to recover again, all the analysts will come out saying buy shares, after they have gone up 10%!
Wednesday, 26 May 2010
2 defensive high income tips
Hi all,
Some recovery on the Dow Jones and Ftse. A risky rally and some relief short term. However if you are like me and want to shore up your portfolio, with defensive high yield shares, then these are 2 I suggest.
Scottish and Southern
Scottish & Southern Electric are one of the biggest electricity providers in Europe and the UK. They are a defensive high yield company (7%). Yes they are susceptible to the economy but everyone needs electric and I believe these worries are priced in at the moment. As you can see from the chart, they are still holding the support line I have drew just above £10, for 2 years now.
RSA insurance
Again this company like SSE above is holding at the support line in the chart below. They are considered quite a safe investment in the insurance industry, with a high yield at approx 7%. Of course they are not as safe as the drug companies or water companies but I think that this is a good opportunity to enter if you do not already have them. I would spread your risk and buy Aviva yielding 8% as well.
Remember these are investments for the long term and one big risk is they cannot sustain their dividend levels if there is any further deteriation in their business vs. say Glaxo and AstraZeneca where their dividend is pretty much safe and growing.
Some recovery on the Dow Jones and Ftse. A risky rally and some relief short term. However if you are like me and want to shore up your portfolio, with defensive high yield shares, then these are 2 I suggest.
Scottish and Southern
Scottish & Southern Electric are one of the biggest electricity providers in Europe and the UK. They are a defensive high yield company (7%). Yes they are susceptible to the economy but everyone needs electric and I believe these worries are priced in at the moment. As you can see from the chart, they are still holding the support line I have drew just above £10, for 2 years now.
RSA insurance
Again this company like SSE above is holding at the support line in the chart below. They are considered quite a safe investment in the insurance industry, with a high yield at approx 7%. Of course they are not as safe as the drug companies or water companies but I think that this is a good opportunity to enter if you do not already have them. I would spread your risk and buy Aviva yielding 8% as well.
Remember these are investments for the long term and one big risk is they cannot sustain their dividend levels if there is any further deteriation in their business vs. say Glaxo and AstraZeneca where their dividend is pretty much safe and growing.
Monday, 24 May 2010
Keep your nerve
Hi all,
Fear continues to dominate market direction. Officially we are in a "correction", which many define as 10% or more decline from the peak. Unfortunately the sentiment is so negative, that we could continue to go lower, if the Dow loses 10,000 and the FTSE 5000.
My strategy has not changed however. I am drip feeding funds into the market as we go lower. My latest additions are the following:
1. Averaged down on BP@£5. Continue to believe that BP is being oversold but I understand that is impossible to "catch a falling knife", therefore I will add more positions as we head lower. I will wait for £4.50 before thinking about buying another trench of BP.
2. Topped up in Newton Higher Income fund. This fund is paying at least 7% income at the current price and is invested in Big blue chips, that should do well from the global economic recovery and the weak £.
This is going to be a tough couple of months but remember Warren Buffets famous quote - “Be Fearful When Others Are Greedy and Greedy When Others Are Fearful”.
Fear continues to dominate market direction. Officially we are in a "correction", which many define as 10% or more decline from the peak. Unfortunately the sentiment is so negative, that we could continue to go lower, if the Dow loses 10,000 and the FTSE 5000.
My strategy has not changed however. I am drip feeding funds into the market as we go lower. My latest additions are the following:
1. Averaged down on BP@£5. Continue to believe that BP is being oversold but I understand that is impossible to "catch a falling knife", therefore I will add more positions as we head lower. I will wait for £4.50 before thinking about buying another trench of BP.
2. Topped up in Newton Higher Income fund. This fund is paying at least 7% income at the current price and is invested in Big blue chips, that should do well from the global economic recovery and the weak £.
This is going to be a tough couple of months but remember Warren Buffets famous quote - “Be Fearful When Others Are Greedy and Greedy When Others Are Fearful”.
Tuesday, 18 May 2010
Buying on dips
Hi all,
Sorry for not updating for a couple of months. I am going to start updating my blog at least weekly going forwards.
It’s been a tough couple of weeks on the stock markets, as the 10% correction has hit us hard, with Greece and Europe concerns dominating the news.
My strategy of being fairly defensive positioned and increasing my cash position to 45% at the end of Q1, has benefited me a lot by reducing how much I lost in the sell off. I sold Skandia global best ideas (which was overexposed to miners/banks), half of my ftse100 tracker at 5775 and Aberdeen Emerging Markets. My portfolio is up by 2.5% YTD(without income) vs. the Ftse100 which has a YTD return of -3%. This is not amazing return but I hope that the stock market may pick up later in the year
This has enabled me to drip feed funds into the market at lower prices and I have reduced my cash position by 5% to 40% as I have invested in what I see as good assets at knock down prices. I have bought the following,
1. Doubled up on BP @£5.70. Unfortunately I bought too early but will consider adding even more into such a good long term opportunity. They currently yield 7.3% and are in the top 3 dividend payers on the ftse100 now. I think the fears of the oil slick are overdone.
2.I bought Aviva @£3.05, down 20% over 30 days. They yield over 7% and have not participated in the rally since the low last year. Short term they could continue to suffer but the fears are overdone that they are overexposed to the PIIGS (Portugal, Italy, Ireland, Greece and Spain).
3. AstraZeneca @£ 28.65 – another defensive asset, yielding over 5%. In uncertain times such as these, investing in a company with a strong balance sheet, dividend growth and strong brand, seems like a good bet. I already have GlaxoSmithKline, so these 2 defensive assets are now a key part of my Portfolio.
4. Fidelity China special situations @£1 offer price - Bought this into the sell off in China. China will be the Worlds biggest economy in 20years time, and I want to increase my exposure to their growth. (I already have Jupiter China)
Therefore my strategy remains the same going forwards to “buy on dips” into defensive, high yielding companies, with strong balance sheets. But also to hold onto my investments in Banks, commercial property and other “dogs”, that are undervalued if you look at the longer term recovery story over the next 5 years. And finally to invest in the high growth economies such as China, for long term growth, as the West struggles to come out of its huge debt problems over the next decade.
Remember that it is key not to keep all your eggs in one basket, hence why I have a diversified strategy, with no more than 5% of my Portfolio in one asset.
Sorry for not updating for a couple of months. I am going to start updating my blog at least weekly going forwards.
It’s been a tough couple of weeks on the stock markets, as the 10% correction has hit us hard, with Greece and Europe concerns dominating the news.
My strategy of being fairly defensive positioned and increasing my cash position to 45% at the end of Q1, has benefited me a lot by reducing how much I lost in the sell off. I sold Skandia global best ideas (which was overexposed to miners/banks), half of my ftse100 tracker at 5775 and Aberdeen Emerging Markets. My portfolio is up by 2.5% YTD(without income) vs. the Ftse100 which has a YTD return of -3%. This is not amazing return but I hope that the stock market may pick up later in the year
This has enabled me to drip feed funds into the market at lower prices and I have reduced my cash position by 5% to 40% as I have invested in what I see as good assets at knock down prices. I have bought the following,
1. Doubled up on BP @£5.70. Unfortunately I bought too early but will consider adding even more into such a good long term opportunity. They currently yield 7.3% and are in the top 3 dividend payers on the ftse100 now. I think the fears of the oil slick are overdone.
2.I bought Aviva @£3.05, down 20% over 30 days. They yield over 7% and have not participated in the rally since the low last year. Short term they could continue to suffer but the fears are overdone that they are overexposed to the PIIGS (Portugal, Italy, Ireland, Greece and Spain).
3. AstraZeneca @£ 28.65 – another defensive asset, yielding over 5%. In uncertain times such as these, investing in a company with a strong balance sheet, dividend growth and strong brand, seems like a good bet. I already have GlaxoSmithKline, so these 2 defensive assets are now a key part of my Portfolio.
4. Fidelity China special situations @£1 offer price - Bought this into the sell off in China. China will be the Worlds biggest economy in 20years time, and I want to increase my exposure to their growth. (I already have Jupiter China)
Therefore my strategy remains the same going forwards to “buy on dips” into defensive, high yielding companies, with strong balance sheets. But also to hold onto my investments in Banks, commercial property and other “dogs”, that are undervalued if you look at the longer term recovery story over the next 5 years. And finally to invest in the high growth economies such as China, for long term growth, as the West struggles to come out of its huge debt problems over the next decade.
Remember that it is key not to keep all your eggs in one basket, hence why I have a diversified strategy, with no more than 5% of my Portfolio in one asset.
Thursday, 4 February 2010
Vodafone update
Hi all,
As you know I added to my position in Vodafone at £1.34. They have been stuck in a trading range since August. They are undervalued, forward dividend yield was as high as 6.3%.
Today was their trading statement and they popped 4% higher, as they increased their profit outlook above expectations for 2010, with free cashflow rising 0.5 billion above previous forecast in 2010 as well.
They are a strong hold and my 4th biggest holding.
As you know I added to my position in Vodafone at £1.34. They have been stuck in a trading range since August. They are undervalued, forward dividend yield was as high as 6.3%.
Today was their trading statement and they popped 4% higher, as they increased their profit outlook above expectations for 2010, with free cashflow rising 0.5 billion above previous forecast in 2010 as well.
They are a strong hold and my 4th biggest holding.
Tuesday, 2 February 2010
Stopped out on BP and Man Group
All,
Unfortunately I was stopped out at breakeven on BP and Man Group today. I don`t think I wanted to risk staying long on them on my spreadbetting account when I already hold them.
I have another share tip to discuss which I will put up a blog about later.
Unfortunately I was stopped out at breakeven on BP and Man Group today. I don`t think I wanted to risk staying long on them on my spreadbetting account when I already hold them.
I have another share tip to discuss which I will put up a blog about later.
Move BP and Man stops
Moving BP and Man Group stops to breakeven at 5.66 and 2.40. Lets not take any risks in this market.
Long BP @5.66
All,
BP results lower than expected and overreaction on the share price. I am long on BP at £5.66, stop loss tight at £5.63. Limit order for 5.75
Still long Man group, moved stop to 2.30
BP results lower than expected and overreaction on the share price. I am long on BP at £5.66, stop loss tight at £5.63. Limit order for 5.75
Still long Man group, moved stop to 2.30
Monday, 1 February 2010
Today`s actions
Hi all,
I just wanted to discuss a few things that happened today. I went long on Man Group as per the previous post at £2.40. At an 11.6% yield the highest in the ftse 100 and with the price dropping 41% over 11 consecutive days, I saw an opportunity to go long(buy). I already hold this share as you know from previous posts but I wanted to take advantage of the severe sell off recently, that was unjustified and overdone. Sentiment in the market was changing this morning and I got on board for the short term. Stop loss is £2.20 for now.
On another note, did you see the water companies today?! Wow what a move to the upside. Rumours about a bid for Northumbrian water, lifted up my holdings in United Utilties and Severn trent by 4% today.
Mr Market is realising now that the defensive income shares were or are undervalued. Will Vodafone be next? Their results are this week, watch out for those on Thursday.
I just wanted to discuss a few things that happened today. I went long on Man Group as per the previous post at £2.40. At an 11.6% yield the highest in the ftse 100 and with the price dropping 41% over 11 consecutive days, I saw an opportunity to go long(buy). I already hold this share as you know from previous posts but I wanted to take advantage of the severe sell off recently, that was unjustified and overdone. Sentiment in the market was changing this morning and I got on board for the short term. Stop loss is £2.20 for now.
On another note, did you see the water companies today?! Wow what a move to the upside. Rumours about a bid for Northumbrian water, lifted up my holdings in United Utilties and Severn trent by 4% today.
Mr Market is realising now that the defensive income shares were or are undervalued. Will Vodafone be next? Their results are this week, watch out for those on Thursday.
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