The Long Road To ISA Millionaires

Honest reporting on shorter-term trading activity and ideas
will89
Posts: 25
Joined: November 7th, 2016, 9:33 am

Re: The Long Road To ISA Millionaires

Postby will89 » December 5th, 2016, 5:22 pm

Current ISA 1 (Sharedealing) Holdings are now shown below. As mentioned above, funds are available to add 1 more holding to the HYP element of the portfolio, suggestions welcome.

HYP Holdings:
BATS
CNA
EZJ
GSK
GNK
HSBA
IMB
KIE
LGEN
NG.
RDSB
TW.

Current Small Cap Holdings:
G4M
RBG
SOM

tjh290633
Lemon Slice
Posts: 255
Joined: November 4th, 2016, 11:20 am

Re: The Long Road To ISA Millionaires

Postby tjh290633 » December 5th, 2016, 5:51 pm

It all depends what you have already. Sorry, missed your later post. VOD would be my choice. You don't have any telecoms.

TJH

Jon46
Posts: 47
Joined: November 4th, 2016, 11:45 am

Re: The Long Road To ISA Millionaires

Postby Jon46 » December 5th, 2016, 6:56 pm

gbjbaanb wrote:
Jon46 wrote:I spent half an hour at least, while logged in of course, typing along private message to you, in response, went to post it, the system asked me to login (again), and my message had gone.


Get Firefox. I've been in the same situation, click a link, the site says "meh". With FF, clicking the back button often takes you back where you were in the (now cached) history, and your text is right there in the box you typed it out in. I don't know if its a feature, or a "feature", but I don't care. Saved my hair on a couple of occasions now.


Can't, it won't work on a Windows RT Surface, which is the only device I have at the mo., since my desk top PC died. (I was seriously cheesed off losing those two very detailed posts answering key questions.)

I need to do something about this because on the RT tablet(and the battery on this is getting poorer to re charge), I don't have a full version of Excel either, and some of the more advanced features of my home devised and very slick portfolio tool don't work either. My grankids want me to move over to Apple of course, but most of my stuff is just to do with Office, Outlook and Web browsing, so I am just looking into getting a nice new Windows 10 PC, maybe a Surface Pro 4, or a similar laptop(suggestions?), won't need another desktop for sure.

Thanks anyway

Jon

MDW1954
Lemon Pip
Posts: 89
Joined: November 4th, 2016, 8:46 pm

Re: The Long Road To ISA Millionaires

Postby MDW1954 » December 5th, 2016, 9:06 pm

Can't, it won't work on a Windows RT Surface, which is the only device I have at the mo., since my desk top PC died. (I was seriously cheesed off losing those two very detailed posts answering key questions.)

I need to do something about this because on the RT tablet(and the battery on this is getting poorer to re charge), I don't have a full version of Excel either, and some of the more advanced features of my home devised and very slick portfolio tool don't work either. My grankids want me to move over to Apple of course, but most of my stuff is just to do with Office, Outlook and Web browsing, so I am just looking into getting a nice new Windows 10 PC, maybe a Surface Pro 4, or a similar laptop(suggestions?), won't need another desktop for sure.

Thanks anyway

Jon


Jon,

Your post has been reported as "off topic". Perhaps you can post it on the Computing board, where you'll reach a wider and more informed audience?

I'm not going to "move" it there, as I'm sure you'll re-post if you really want the answers to these questions...!

MDW1954 (acting a moderator)

will89
Posts: 25
Joined: November 7th, 2016, 9:33 am

Re: The Long Road To ISA Millionaires

Postby will89 » December 5th, 2016, 9:09 pm

tjh290633 wrote:It all depends what you have already. Sorry, missed your later post. VOD would be my choice. You don't have any telecoms.

TJH



Would someone mind elaborating on the VOD dividend cover situation? At face value it's scarily low and also converted from dollars so I presume we'll be getting less thanks to the exchange rate? Apologies if I'm making a glaring error. I've been tempted by ISAT in that vague sector.

tjh290633
Lemon Slice
Posts: 255
Joined: November 4th, 2016, 11:20 am

Re: The Long Road To ISA Millionaires

Postby tjh290633 » December 5th, 2016, 11:13 pm

will89 wrote:Would someone mind elaborating on the VOD dividend cover situation? At face value it's scarily low and also converted from dollars so I presume we'll be getting less thanks to the exchange rate? Apologies if I'm making a glaring error. I've been tempted by ISAT in that vague sector.


There are various complicating factors, but one is that they have been spending cash since the Verizon split off. The last half year results are at http://www.investegate.co.uk/vodafone-g ... 00081536P/ which may give you some clues.

They now account in €uros, not US$.

TJH

will89
Posts: 25
Joined: November 7th, 2016, 9:33 am

Re: The Long Road To ISA Millionaires

Postby will89 » December 6th, 2016, 11:19 am

VOD was added this morning at 189.45.

CommissarJones
Posts: 25
Joined: November 10th, 2016, 9:15 pm

Re: The Long Road To ISA Millionaires

Postby CommissarJones » December 6th, 2016, 4:12 pm

will89 wrote:Would someone mind elaborating on the VOD dividend cover situation? At face value it's scarily low and also converted from dollars so I presume we'll be getting less thanks to the exchange rate? Apologies if I'm making a glaring error. I've been tempted by ISAT in that vague sector.


Vodafone's dividend coverage is set to improve because the company has completed Project Spring, the big program of investment in its network, which was draining free cash flow in recent years. From the latest annual results in May: "We expect free cash flow to exceed €4.0 billion, after all capex, before M&A, spectrum payments and restructuring costs. This level of cash generation, combined with healthy growth and continued operating leverage, provides us with the visibility to sustain a progressive dividend policy."

As for ISAT, this stock rings alarm bells for me. 2011 was the most recent year in which free cash flow covered dividends paid, and net borrowings surged 74% in the five years through 2015. No thanks.

will89
Posts: 25
Joined: November 7th, 2016, 9:33 am

Re: The Long Road To ISA Millionaires

Postby will89 » December 7th, 2016, 10:29 am

One further trade today, which will likely be the last for a while. I top-sliced HSBA, which had become too large in the HYP after buying at 432p in May, 1/4 of my holding was sold at 671p, which took it back to exactly median.

With the proceeds and the remaining cash in the account I added a slice (half holding) of CAKE, which I had been looking to add to my Value/Small Caps portfolio for a while. Tasty!

ADrunkenMarcus
Posts: 44
Joined: November 5th, 2016, 11:16 am

Re: The Long Road To ISA Millionaires

Postby ADrunkenMarcus » December 7th, 2016, 1:04 pm

will89 wrote:With the proceeds and the remaining cash in the account I added a slice (half holding) of CAKE, which I had been looking to add to my Value/Small Caps portfolio for a while. Tasty!


Welcome to the club. I bought CAKE in 2015 and hope to hold it for the long term.

Best wishes


Mark.

minerjoe
Posts: 13
Joined: December 8th, 2016, 10:30 am

Re: The Long Road To ISA Millionaires

Postby minerjoe » December 15th, 2016, 5:35 pm

My own person projection from starting at 27. I know forecasts aren't to be trusted, but its good fun to take a punt. FYI I am actually ahead of plan and should be around 78k at the end of this year, not the forecast £72,997. Here is to hoping I can keep up the payment in!

Note they are financial years, not calendar.


tjh290633
Lemon Slice
Posts: 255
Joined: November 4th, 2016, 11:20 am

Re: The Long Road To ISA Millionaires

Postby tjh290633 » December 15th, 2016, 6:50 pm

Projections are all very well, but the real world is not like that. I recall in 1999 that I could see my fortunes going ballistic, but while they rose like the rocket, they came down like the stick. Although the market fell a lot, I was never invested in any of the dot.com shares, so did not feel the fall-out so much. The other time to take note was 2008, when dividends were being cut wholesale and the banks were in severe danger.

You have the advantage of investing substantially each year, so you will be able to take advantage of the periodic falls in the market. Looking back at some of my records from about 1959 to the time when PEPs began, I plotted my then unit trust savings plans on log-log paper, plotting the value against the amount invested. If the value rose above the amount invested line, then I was on target, but the progress was nothing like uniform. There were setbacks from time to time, notably in 1974.

You may like to keep regular checks on progress, as euphoria can turn to angst very quickly.

TJH

minerjoe
Posts: 13
Joined: December 8th, 2016, 10:30 am

Re: The Long Road To ISA Millionaires

Postby minerjoe » December 16th, 2016, 9:16 am

As I said, its a good bit of fun, but not worth staking your life on it. I am more interested to see just how far + or - I am from the project as I get there. Last year I was behind, this year it looks (fingers crossed) that I will be ahead...

But in relation to the sub-forum, I should be at my million in my forties... maybe!

will89
Posts: 25
Joined: November 7th, 2016, 9:33 am

Re: The Long Road To ISA Millionaires

Postby will89 » December 16th, 2016, 9:17 am

It seems, paradoxically, that since I started this thread my trading activity has really increased, which was not my intention at all!

There has been more trading, this time slightly more pertinent. Something my Wife and I have discussed for a while is the place of Tobaccos in our portfolios. A member of her family had some sad cancer-related news in the last week (not related to smoking but it still makes you think), so as a result we decided that from now on we're not going to invest directly in any Tobacco shares. IMB and BATS were both sold yesterday.

To be fair, I know they are oft-quoted as 'perfect' HYP shares, but the yield was well below my average so I'm not devastated, even though I appreciate their potential for dividend growth.

I intent to top-up CAKE, and then I've got a couple of more speculative small-caps on my Watchlist, namely PURP and CCT.

Jon46
Posts: 47
Joined: November 4th, 2016, 11:45 am

Re: The Long Road To ISA Millionaires

Postby Jon46 » December 16th, 2016, 10:26 am

minerjoe wrote:As I said, its a good bit of fun, but not worth staking your life on it. I am more interested to see just how far + or - I am from the project as I get there. Last year I was behind, this year it looks (fingers crossed) that I will be ahead...

But in relation to the sub-forum, I should be at my million in my forties... maybe!


£1,716,225. That would be your target if RPI behaves in the next twenty years as it has behaved in the last twenty, which I don't see in your model.

I agree with you about models as targets can be fun. We used to do this when we were young and building up our savings/portfolios with ten year plans.

We used to target a reasonably modest easily achieved model, so the actuals generally stayed well ahead even if markets and RPI did not play ball. It was more encouraging that way.

Best of luck

Jon

PS Personally I think you need to allow another ten years, in particular if you just stick to FTSE350 HY stuff.

saechunu
Posts: 21
Joined: December 14th, 2016, 5:46 pm

Re: The Long Road To ISA Millionaires

Postby saechunu » December 16th, 2016, 12:16 pm

Over a 10 year period commencing February 2001 I operated a discretionary investment approach in my ISA account marrying value with trend following that focused on less well researched - more inefficient - market sectors. The 10 year XIRR on that account was 25.51% in a period that spanned two deep bear markets in stocks and the strategy suffered no negative years and no deep drawdowns ensuring it was not a rollercoaster ride.

If you opened a new ISA account today with an initial full subscription of 20k and generated that same annual return of 25.5%, subscribing another 20k at each anniversary while maintaining that rate of return, at the 10 year point you'd have turned the total 200k subscribed into around 850k. If at the beginning you'd already had 15k - instead of zero - in your ISA account before adding that first 20k subscription then if my maths is correct the 25.5% CAGR would lead to a £1M terminal balance at the 10 year point. No RPI adjustment but preferable to a slap in the face.

I don't think that today's markets offer as attractive opportunities as they did then but it's possible they may also not present as much danger. Then again, if you yourself can somehow sidestep some of the danger then dangerous markets eventually lead to wonderful opportunities as happened during both of the deep market falls in that noughties decade. I recognise also that mine was an unusually positive result that few others would have had the good fortune to enjoy.

Still, your plan envisions a 30% longer timeframe and twice the contributions which change the maths considerably making this eminently achievable. I would hesitate to set your target as an explicit goal though because when investing actively you do not want to be reaching for opportunities but instead letting the opportunities come to you.

I may have missed something in your plan but I didn't notice anything about selling. There are certain types of businesses whose characteristics make them potential 'permanent' holds by virtue of possessing dependable and repeatable cashflows. Most businesses aren't like that and have much more cyclical business models which cause them to oscillate between significantly under valued and over valued. My view is that unless you are holding an all market index tracker then these lesser quality cyclical businesses are not good permanent holds and should be traded so as to capture more of the up-cycle than the down-cycle. If you can devise methods to help you do that you may be able to significantly raise your rate of return.

My suggestion of areas to focus on are then:
i. Finding value in under-researched areas of the market that operate inefficiently plus have a method of exiting these positions eventually. Be careful because there be dragons here also. Small cap and value factors.
ii. Holding high quality businesses indefinitely. Quality factor.
iii. Finding value in cyclical businesses plus a method of existing these positions eventually to avoid the full-cycle. Value factor.

The holy grail is to identify small under-researched good-value businesses that have high quality characteristics enabling them to be held for the long term. Value (initially), small cap (initially) and quality factors combined can lead to tremendous long term compounding of returns. Very rare beasts and hard to find but a few in an investment career can juice returns enormously.

dspp
Lemon Slice
Posts: 255
Joined: November 4th, 2016, 10:53 am

Re: The Long Road To ISA Millionaires

Postby dspp » December 17th, 2016, 12:23 pm

w89,

I read your comment about tobacco shares with interest. There has long been discussion over on the HYP board about ethics of tobacco. At the end of the day it is a personal choice on ethical grounds. I note personally that mankind pretty much does everything possible to be unethical - even food production is cataclysmic for the environment if one assesses it carefully, and if you really want to challenge yourself consider the ethics of reproduction in an overpopulated world. Soooo ...... I don't go there.

However I was doing something at work the other day and I realised that our supply chain was potentially at risk due to factors in the tobacco industry and I did some digging around. The result is that we could be at 'peak tobacco' both in production & consumption terms (as after all they must balance). Take a look at these links

https://www.statista.com/statistics/279 ... ince-1880/ (stick consumption 1880-2014)
http://www.tobaccoreporter.com/2016/05/balancing-act-3/ (tobacco production 2012-2016)
http://www.tobaccoleaf.org/Userfiles/Fi ... GA-eng.pdf (interesting spin)

If I am reading this correctly peak tobacco was 2009 and the trend is down now despite global population continuing to increase. This has the same implications for tobacco as I pose for oil in my watching out for effects of peak oil, and likely over similar decadal timescales. However I am seeing much less discussion about tobacco (global revenues $500bn) vs oil (global revenues $760bn - 1.2trn). Food for thought in my mind.

Regards, dspp

idpickering
Lemon Slice
Posts: 282
Joined: November 4th, 2016, 5:04 pm

Re: The Long Road To ISA Millionaires

Postby idpickering » December 17th, 2016, 3:22 pm

dspp wrote:w89,

I read your comment about tobacco shares with interest. There has long been discussion over on the HYP board about ethics of tobacco. At the end of the day it is a personal choice on ethical grounds. I note personally that mankind pretty much does everything possible to be unethical - even food production is cataclysmic for the environment if one assesses it carefully, and if you really want to challenge yourself consider the ethics of reproduction in an overpopulated world. Soooo ...... I don't go there.

However I was doing something at work the other day and I realised that our supply chain was potentially at risk due to factors in the tobacco industry and I did some digging around. The result is that we could be at 'peak tobacco' both in production & consumption terms (as after all they must balance). Take a look at these links

https://www.statista.com/statistics/279 ... ince-1880/ (stick consumption 1880-2014)
http://www.tobaccoreporter.com/2016/05/balancing-act-3/ (tobacco production 2012-2016)
http://www.tobaccoleaf.org/Userfiles/Fi ... GA-eng.pdf (interesting spin)

If I am reading this correctly peak tobacco was 2009 and the trend is down now despite global population continuing to increase. This has the same implications for tobacco as I pose for oil in my watching out for effects of peak oil, and likely over similar decadal timescales. However I am seeing much less discussion about tobacco (global revenues $500bn) vs oil (global revenues $760bn - 1.2trn). Food for thought in my mind.

Regards, dspp


As a holder of tobacco shares (BATs and IMB), I'm not concerned about the ethics at all, but respect other investors may be so. A large plus note to me is that the Chinese are allowed more than one baby now. Going forward that's got to be good should the littleuns start smoking. ;)

disc - I don't smoke.

Ian.

dspp
Lemon Slice
Posts: 255
Joined: November 4th, 2016, 10:53 am

Re: The Long Road To ISA Millionaires

Postby dspp » December 17th, 2016, 3:25 pm

idp,
If it was not for the Chinese effect the numbers would probably be falling quite steeply from what I looked into briefly re our supply chains. I too hold a couple of stocks, BATs and Imperial brands from memory.
Regards, dspp

idpickering
Lemon Slice
Posts: 282
Joined: November 4th, 2016, 5:04 pm

Re: The Long Road To ISA Millionaires

Postby idpickering » December 17th, 2016, 3:41 pm

dspp wrote:idp,
If it was not for the Chinese effect the numbers would probably be falling quite steeply from what I looked into briefly re our supply chains. I too hold a couple of stocks, BATs and Imperial brands from memory.
Regards, dspp


Hi dspp,

Thanks for your post. Notwithstanding Chinese babies etc, from what I have seen, I have not noticed any reduction in my work mate's smoking habits at all. Even if it's those that choose to 'vape' instead. They're all puffing away as before. IMB and BATS offer 'vaping' items too. So I'm not remotely concerned. I wish I'd bought even more tobacco shares in the past. It's unlikely I'll be buying any more anytime soon as I'm top heavy in the sector.

Regards,

Ian.


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