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Recent behaviour since peak

A helpful place to also put any annual reports etc, of your own portfolios
Newroad
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Recent behaviour since peak

#475005

Postby Newroad » January 21st, 2022, 11:46 am

Morning All.

Clearly things have been a bit bumpy recently on the equity markets, so I thought I'd take a look at how much the falls have been. The following (source: TrustNet) represents the performance of the constituent parts of my family's sub-portfolios. As you can see, I've used short-term peak of the FTSE World Index as the notional peak (08/12/2021).

Image
Image

Most are in a tight band of -2% to -6%, which is roughly consistent with the coverage I have given elsewhere (e.g. here https://www.lemonfool.co.uk/viewtopic.php?f=8&t=32992). The outliers are BIPS (doing quite well, especially in the context of interest rates rising a bit) and MNP (probably exhibiting some SMT-like characteristics in its concentrated and high conviction holdings).

We used to own MYI and WTAN, which I why I keep them in (to see if I was right or not to dispose of them) but they are not shown in the graph.

Regards, Newroad

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Re: Recent behaviour since peak

#475104

Postby tjh290633 » January 21st, 2022, 3:27 pm

Interesting. My portfolio is at an all time high as at last night. Quite why is a mystery to me. I have two theories about why I have beaten the market over the years and more recently. They are first, the use of nominally equal weighted holdings, with a fairly narrow tolerance band (+50% above median weight) and a topping up system based on yield and weight, as used in the HYPTUSS tool.

Something, possibly financial shares, acts as a drag on the market. Sometimes it works the other way, but more often in my favour.

TJH

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Re: Recent behaviour since peak

#475285

Postby ADrunkenMarcus » January 22nd, 2022, 11:03 am

Newroad wrote:We used to own MYI


MYI has been a significant drag on my dividend growth portfolio in recent years. I use it as a core global holding to provide a significant dividend income and then the rest of the portfolio is made up of lower yielders which grow faster.

However, it's held up much better than other holdings during the current market falls over the past few weeks.

Best wishes


Mark.

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Re: Recent behaviour since peak

#475295

Postby Bouleversee » January 22nd, 2022, 11:35 am

tjh290633 wrote:Interesting. My portfolio is at an all time high as at last night. Quite why is a mystery to me. I have two theories about why I have beaten the market over the years and more recently. They are first, the use of nominally equal weighted holdings, with a fairly narrow tolerance band (+50% above median weight) and a topping up system based on yield and weight, as used in the HYPTUSS tool.

Something, possibly financial shares, acts as a drag on the market. Sometimes it works the other way, but more often in my favour.

TJH


You deserve an award, Terry. Presumably you must have taken some of your profits on SMT before it nose-dived, which I didn't. My main ISA is down over £22k since Jan.4 and other p/fs also somewhat lower since then. Unilever hasn't done me any favours either but not to worry, the values go up and down like a yo~yo and there's still plenty left for the taxman to get his hands on. It never occurred to me that a tennis player could cause me to lose a chunk of my money. Do we have any lithium in this country which could be mined?

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Re: Recent behaviour since peak

#475297

Postby ReformedCharacter » January 22nd, 2022, 11:42 am

Bouleversee wrote:Do we have any lithium in this country which could be mined?

Yes, there are two companies trying to do that in Cornwall.

RC

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Re: Recent behaviour since peak

#475398

Postby tjh290633 » January 22nd, 2022, 6:41 pm

Bouleversee wrote:
tjh290633 wrote:Interesting. My portfolio is at an all time high as at last night. Quite why is a mystery to me. I have two theories about why I have beaten the market over the years and more recently. They are first, the use of nominally equal weighted holdings, with a fairly narrow tolerance band (+50% above median weight) and a topping up system based on yield and weight, as used in the HYPTUSS tool.

Something, possibly financial shares, acts as a drag on the market. Sometimes it works the other way, but more often in my favour.

TJH


You deserve an award, Terry. Presumably you must have taken some of your profits on SMT before it nose-dived, which I didn't. My main ISA is down over £22k since Jan.4 and other p/fs also somewhat lower since then. Unilever hasn't done me any favours either but not to worry, the values go up and down like a yo~yo and there's still plenty left for the taxman to get his hands on. It never occurred to me that a tennis player could cause me to lose a chunk of my money. Do we have any lithium in this country which could be mined?

I have never held SMT, Lorna. My heaviest shares are S32, DGE and AV., but all have slipped back. It's the out of favour shares that have put on a spurt. They are all still underweight but well off their lows. The two lightest are now ULVR and RKT. For a long time MKS, MARS and CPG were on the floor. Marks & Sparks rose the most last year.

TJH

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Re: Recent behaviour since peak

#475399

Postby Newroad » January 22nd, 2022, 6:43 pm

Hi TJH.

I doubt it is anything significantly to do with equal weighting (though, all things being equal, I would prefer my passive investments to be equal weighted, but it is difficult to find such products in the UK).

I suspect it is more to do with

    (1) Which "market you have beaten". Likely you mean the FTSE100, FTSE 250 or FTSE350 in context (and this has been discussed by us and others before). Well done in context, but I benchmark myself (and structurally fail, due to the bond holdings and no doubt other factors) against the more historically at least challenging FTSE World Index

    (2) Genuine style based cyclicality (we have looked in the past when the UK high yield approach did better or worse). For what it's worth, I think now is once again one of those periods where your style rates to do well - very likely in relative terms and possibly in absolute terms.

Anyway, we no doubt live in interesting times!

Regards, Newroad

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Re: Recent behaviour since peak

#475404

Postby tjh290633 » January 22nd, 2022, 6:57 pm

Newroad wrote:Hi TJH.

I doubt it is anything significantly to do with equal weighting (though, all things being equal, I would prefer my passive investments to be equal weighted, but it is difficult to find such products in the UK).

I suspect it is more to do with

    (1) Which "market you have beaten". Likely you mean the FTSE100, FTSE 250 or FTSE350 in context (and this has been discussed by us and others before). Well done in context, but I benchmark myself (and structurally fail, due to the bond holdings and no doubt other factors) against the more historically at least challenging FTSE World Index

    (2) Genuine style based cyclicality (we have looked in the past when the UK high yield approach did better or worse). For what it's worth, I think now is once again one of those periods where your style rates to do well - certainly in relative terms and possibly in absolute terms.

Anyway, we no doubt live in interesting times!

Regards, Newroad

All my investments are on the LSE, all UK domiciled except S32, so I consider UKX as the index to judge my performance against. HIX might be a better fit, but so far this year that is racing ahead.

Obviously there is a reason for outperformance, but it is not clear to me. I do keep a record of how my shares have performed, and the change in share prices in the calendar year is often revealing. I have posted that on several occasions.

TJH

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Re: Recent behaviour since peak

#475411

Postby Bouleversee » January 22nd, 2022, 7:13 pm

I was mixing you up with Dod, Terry. Thinking about it, SMT wouldn't fit in your p/f. I have held M&S for years and they haven't yet recovered to the price I paid. Nor have MARS.

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Re: Recent behaviour since peak

#475418

Postby 77ss » January 22nd, 2022, 7:34 pm

Bouleversee wrote:...It never occurred to me that a tennis player could cause me to lose a chunk of my money. Do we have any lithium in this country which could be mined?


Yes, but they are small beer compared to the huge Serbian deposits.

Last time I looked, the Jadar mine had a 40 year life with projected annual sales of lithium carbonate and by products of about $2bn a year.

Is Serbia so rich that it can afford to spurn such a resource? Or is there more to the matter?

The 'environmental' concerns predate the Australian Open and, in my view are classic nimby doublethink.

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Re: Recent behaviour since peak

#475421

Postby richfool » January 22nd, 2022, 8:14 pm

Newroad wrote:Morning All.

Clearly things have been a bit bumpy recently on the equity markets, so I thought I'd take a look at how much the falls have been. The following (source: TrustNet) represents the performance of the constituent parts of my family's sub-portfolios. As you can see, I've used short-term peak of the FTSE World Index as the notional peak (08/12/2021).

Most are in a tight band of -2% to -6%, which is roughly consistent with the coverage I have given elsewhere (e.g. here https://www.lemonfool.co.uk/viewtopic.php?f=8&t=32992). The outliers are BIPS (doing quite well, especially in the context of interest rates rising a bit) and MNP (probably exhibiting some SMT-like characteristics in its concentrated and high conviction holdings).

We used to own MYI and WTAN, which I why I keep them in (to see if I was right or not to dispose of them) but they are not shown in the graph.

Regards, Newroad

Newroad, thanks for your comparison table, really interesting and helpful. Noting that it includes MWY and FCIT, it would have been great to have seen it with Brunner (BUT) included.

Regards
Richfool

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Re: Recent behaviour since peak

#475559

Postby Newroad » January 23rd, 2022, 2:19 pm

Hi TJH.

Here's why I benchmark like I do, though I illustrate this mostly for the benefit of others - I'm sure you appreciate it at some level. An indicative graph from Trustnet (can't go back further than 10 years from that source).

Image

It shows the two anchor holdings for the sub-portfolios - indeed the SIPP's were 100% ATST until 2 or so years ago and similarly the JISA's were 100% FCIT until 2 or so years ago. The JISA's were started 2008 +/- 2 years or so and the SIPP's earlier again, but I can't recall exactly when. The ISA's started later (after the mortgage was paid off) and had WTAN, now MWY, as the core holding.

As can be seen, the FTSE100 and FTSE350HY have not been particularly challenging to beat and my default choices for the family performed rather well. Indeed, ignorance would have arguably been bliss - and me taking an interest and "balancing" the portfolios more recently has done more damage than good in absolute terms (perhaps less so in risk adjusted terms, but I suspect even taking that into account too).

As I said earlier, I think now is on balance likely to be a good time for your style in so far as I understand it, as have other periods in the past no doubt, but I wouldn't want the casual reader to misunderstand the broader picture.

Conversely, I take the short term hit as indicated in the original post (and may yet have to take some more pain) but in the longer term, it's gone OK. I'm happy for the children that I seem to have made effective choices for them (indeed, their JISA's, originally Child Trust Funds, are rather sizable).

Regards, Newroad

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Re: Recent behaviour since peak

#475692

Postby tjh290633 » January 24th, 2022, 10:46 am

Newroad wrote:It shows the two anchor holdings for the sub-portfolios - indeed the SIPP's were 100% ATST until 2 or so years ago and similarly the JISA's were 100% FCIT until 2 or so years ago. The JISA's were started 2008 +/- 2 years or so and the SIPP's earlier again, but I can't recall exactly when. The ISA's started later (after the mortgage was paid off) and had WTAN, now MWY, as the core holding.

I take it that the 10 year figures are the increase from that time.

I have data for ATST, FCIT and WTAN from the date that I started investing in them for my grandchildren, and so have a comparison with my own performance on an IRR basis, i.e. TR. Not over the same periods but from the starting points. It is fair to say that my accumulation units have underperformed each of those.

Start Date   21-Dec-01   27-Jun-03   05-Mar-10   15-Apr-04   07-Apr-11   02-Mar-15        
IRR Witan FRCL FCI ATST BSET FRCL
IT 10.08% 14.07% 7.81% 10.42% 7.41% 11.32% TR
FTSE 1.82% 3.22% 2.02% 2.92% 3.49% 1.12%
IT on SP 5.91% 8.96% 7.75% 7.69% 0.03% 9.78%
Period 20.11 18.59 9.05 17.79 3.90 6.90 Years

V.FTSE 325.1% 278.1% 383.1% 263.1% 0.8% 875.2%

TJH TR: 8.52% 9.55% 9.02% 7.48%

FTSE100 TR
21-Dec-01 -2,448.32
21-Jan-22 7,425.10
XIRR 5.68%

The then FCI and BSET were only held for relatively short periods, so I do not have comparable figures for my own portfolio, but you can see the comparable figures. The figures shown for FCI and BSET are correct for the period of holding, but only for the straight FTSE100 values. At the bottom you can see the TR figure for the FTSE100 up to Friday, taken from the FT's "World Markets at a Glance" table. I agree with you that the ITs give a better TR figure, but that is not the objective of my portfolio, which is aimed at income generation.

TJH

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Re: Recent behaviour since peak

#475864

Postby 1nvest » January 24th, 2022, 9:09 pm

What goes around comes around

FCIT is around half US and with Covid etc. has seen large inflows into US$ (and hence US bonds/stocks).

Image

At some point US will be seen as be overpriced and/or fear subsides and outflows of US$ into other currencies/assets will tend to see US relatively lag.

UK has also endured a 2016 Brexit lag that at some point might similarly rebound/reverse.

From what I've seen TJH HYP and FT250 have tended to track each other relatively similarly.

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Re: Recent behaviour since peak

#475871

Postby Urbandreamer » January 24th, 2022, 9:49 pm

For what it' worth, my portfolio has taken a pounding recently. Though nowhere bad as it did when everyone found out that covid existed.

Now that is out of the way, we should consider what we want to invest in and why.

I love investing in "tech". It doesn't matter if it's biotech, software or stuff for electric cars. SURE, I have some Diageo (I like a drink), some Unilever (I like an ice cream) and some Hill & smith ( I like ... Ok tin plated steel isn't edible). However what I really like is the future.

Some may simply manage their portfolio for profit, but that's hard. So hard that index trackers often do a better job at that. Some manage it to maintain "wealth", good on them. Some manage it to provide an income.

I want to invest in the future, and of course profit from doing so.

Of course, just like the railways, times are going to change. I will lose money on investments that prove bad. Likewise good investments will turn bad over time.

So be it.

This is what I do and I can do no other.

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Re: Recent behaviour since peak

#475945

Postby tjh290633 » January 25th, 2022, 10:32 am

Urbandreamer wrote:Now that is out of the way, we should consider what we want to invest in and why.

I intend to follow my usual procedure for topping up, which is now encapsulated in the HYPTUSS spreadsheet, to which a link is available on this site.

Fundamentally you rank your holdings by weight, the lightest being 1 and the heaviest 36 in my case, then you rank them by yield, with the highest yield being 1 and the lowest 36 in my case. Add the rankings and rank them on that figure. The lowest is the highest rank and the highest the lowest rank. here is my table:

Holding   Weight   Yld   W+Y   Rank
ADM 19 4 23 4
AV. 36 11 47 30
AZN 12 30 42 25
BA. 25 18 43 27
BATS 27 5 32 13
BLND 16 24 40 24
BHP 31 2 33 15
BP. 32 16 48 31
BT.A 24 19 43 28
CPG 2 34 36 17
DGE 34 31 65 35
GSK 26 12 38 18
IGG 29 9 38 19
IMB 7 3 10 1
IMI 33 33 66 36
KGF 13 26 39 21
LGEN 22 6 28 9
LLOY 5 28 33 16
MARS 3 36 39 22
MKS 4 35 39 23
NG. 30 13 43 29
PHP 11 14 25 5
PSON 9 23 32 14
RKT 1 27 28 10
RDSB 20 22 42 26
RIO 15 1 16 2
S32 35 29 64 34
SGRO 23 32 55 33
SMDS 8 21 29 11
SSE 17 10 27 8
TATE 14 15 29 12
TSCO 28 25 53 32
TW. 10 8 18 3
ULVR 6 20 26 7
UU. 21 17 38 20
VOD 18 7 25 6

This gives me the top-up ranking, as shown in this table:

Top-up          Income                     Cost                
Rank EPIC Rank EPIC % Income Rank Epic % Cost
1 IMB 1 RIO 7.38% 1 IGG 4.69%
2 RIO 2 BHP 6.76% 2 BP. 4.56%
3 TW. 3 ADM 5.33% 3 BT.A 4.39%
4 ADM 4 BATS 4.91% 4 AV. 4.39%
5 PHP 5 LGEN 4.42% 5 VOD 4.13%
6 VOD 6 IMB 4.28% 6 PSON 4.10%
7 ULVR 7 VOD 4.21% 7 RDSB 4.08%
8 SSE 8 AV. 4.06% 8 LLOY 4.04%
9 LGEN 9 IGG 3.92% 9 MARS 4.00%
10 RKT 10 GSK 3.59% 10 MKS 3.69%
11 SMDS 11 NG. 3.57% 11 GSK 3.53%
12 TATE 12 SSE 3.42% 12 PHP 3.50%
13 BATS 13 BP. 3.35% 13 S32 3.41%
14 PSON 14 TW. 3.18% 14 TSCO 3.39%
15 BHP 15 BA. 2.92% 15 BATS 3.36%
16 LLOY 16 BT.A 2.91% 16 BLND 3.33%
17 CPG 17 UU. 2.83% 17 BHP 3.23%
18 GSK 18 TATE 2.59% 18 LGEN 3.14%
19 IGG 19 PHP 2.59% 19 SSE 3.01%
20 UU. 20 TSCO 2.32% 20 KGF 2.89%

I impose a limit on the amount any one share contributes to income and to the share of portfolio cost, 5% in each case. If topping a share up by 20% (my usual practice) would exceed that figure, then the share is disqualified. So you can see that the first 7 ranked by share of income are disqualified, as 4.2% is the effective cut-off point, and likewise the top 4 in share of cost. Consequently TW., Taylor Wimpey are the highest eligible share, but a couple of days ago that was Unilever. The next is PHP, Primary Health Properties. The process combines an element of rebalancing underweight shares and increasing dividend income.

If I have to replace a share, the disposal might be due to non-existant or very low yield, take-over or not being quoted on the LSE, for example, and the replacement would then be chosen from shares with a yield higher then my median yield, currently 4.1%. At times like this I am tolerant of shares which are not paying dividends, but which may well resume once peace breaks out, as it were. That inludes the following shares currently yielding below 2%:

Rank EPIC   Yield
31 DGE 1.98%
32 SGRO 1.76%
33 IMI 1.45%
34 CPG 0.87%
35 MKS 0.00%
36 MARS 0.00%


TJH

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Re: Recent behaviour since peak

#476260

Postby OhNoNotimAgain » January 26th, 2022, 9:42 am

tjh290633 wrote:Interesting. My portfolio is at an all time high as at last night. Quite why is a mystery to me. I have two theories about why I have beaten the market over the years and more recently. They are first, the use of nominally equal weighted holdings, with a fairly narrow tolerance band (+50% above median weight) and a topping up system based on yield and weight, as used in the HYPTUSS tool.

Something, possibly financial shares, acts as a drag on the market. Sometimes it works the other way, but more often in my favour.

TJH


Well done, value always comes through in the end, but it can take a long time.

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Re: Recent behaviour since peak

#476691

Postby vand » January 27th, 2022, 8:41 pm

As in my "rotation into value thread", UK bluechips are holding out remarkably well in this mini rout.

In the last 2 months, the FTSE100 has outperformed the S&P by about 13% and the Nasdaq composite by about 22%!

I'm not sure how long it can continue to hold up so well.. there are signs that market breadth is deteriorating as it did to the other indexes before they sold off.

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Re: Recent behaviour since peak

#477064

Postby 1nvest » January 29th, 2022, 2:09 pm

vand wrote:As in my "rotation into value thread", UK bluechips are holding out remarkably well in this mini rout.

In the last 2 months, the FTSE100 has outperformed the S&P by about 13% and the Nasdaq composite by about 22%!

I'm not sure how long it can continue to hold up so well.. there are signs that market breadth is deteriorating as it did to the other indexes before they sold off.

Is not the FT100 more of a inflation hedge, utilities that can increase prices in line with or in excess of inflation. That will tend to lag during periods of growth, but excel during periods of rising/high inflation.

There's a good argument IMO for a thirds each in FT100 (inflation), gold (hyperinflation/negative real yields), FT250 (growth) combination. Since 1932 5% 25 year SWR, since 1896 3.5% 25 year SWR - but that includes the coincidence of WW1/Spanish Flu/Collapse of British Empire extreme situations).

VUKE/VMID/SGLN ETF's (0.11% combined expense ratio).

Along with owning a home to fund late life all-inclusive care home fees and 25 year SWR sees a 65 year old through to 90, and home value funds care home fees thereafter, historic worst cases. More often (median case) and you still have the same or more of the inflation adjusted start date amount available at the end of 25 years.

The bitterness is that one of the three will likely be lagging, out of cycle, but should perhaps be viewed as the means to profit take out of others and 'add-low' accumulate more of that laggard in preparation for when it becomes the leader. That most recent laggard has been the FT100. Wouldn't be surprised if forward time that excelled whilst the FT250 lagged.


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