I've been meaning to update for a while, and with TMF going bye bye, I think it's time i did:
The short version is that I'm rubbish at share selection, and I should stick to trackers. I am now 100% passive, and so much happier for it. This review is based on a retrospective analysis of my investment history over the last 6 years (with some approximations for 2000 to 2011).
I have relied on the stepone portfolio excell spreadsheet created by itsallaguess and kiloran for analysing my portfolio and doing the number crunching. I highly recommend it to anyone with more than 1 share / fund: http://tmffinancialsoftware.weebly.com/ ... folio.html
My previous folio reviews can be found here: http://boards.fool.co.uk/self-indulgent ... 37705.aspx and http://boards.fool.co.uk/buzzz-folio-2011-12453162.aspx
Overview
- I started off with a 50% 50 split between the FTSE 100 and FTSE 250 drip feeding from 2003 to ~2014. The index trackers were based on early reading on the fool uk website.
- In 2009 I started buying individual shares, and dabbled in a couple of active funds (recommended by Hargreaves Lansdown).
- In 2010 I looked at a little geographic diversity and took some regional index funds.
- overtime, I realised that my funds did much better than my share selection. So I started to sell off in a couple of tranches (partially when I moved ISA providers).
- In 2016, I discovered the monevator blog and read Smarter Investing by Tim Hale.
- Since then, I have gone 100% passive.
Funds
Overall my funds have been very successful, with an average return of 12% compounded. All but three funds were passive indexes. Of the three active funds, two made a profit, but the Junior oil fund purchased in January 2011 made a 43% loss over 42 months.
I have had a very strong focus on the FTSE 100 / All share / 250 with about 85% of all my funds in these. OVertime, it has been more heavily weighted to the 250 as I found it to be consistently better performing than the 100.
Note, the annualised calculations are probably distorted for many of the funds as purchases were drip fed, particularly the FTSE 100 / All Share and 250. I also jumped between difference geographic funds as I chased lower fees. Even so, it's clear that investing in funds have been good to me.
Code: Select all
Fund | Purchase | Sale | Period | % profit | % profit
| Date | Date | (years) | total | comp
HSBC 250 | 18 Nov 03 | 4 Aug 14 | 10.7 | 261% | 11%
HSBC All | 18 Nov 03 | 4 Aug 14 | 10.7 | 219% | 10%
Investco active Bond | 9 Mar 09 | 31 Jul 14 | 5.4 | 71% | 10%
Artemus active Strat | 21 May 09 | 31 Jul 14 | 5.2 | 59% | 9%
L & G Pacific tracker | 23 May 10 | 6 Jan 11 | 0.6 | 24% | 29%
L & G Japan tracker | 24 May 10 | 6 Jan 11 | 0.6 | 6% | 9%
HSBC USA tracker | 24 May 10 | 23 Jan 12 | 1.7 | 15% | 8%
HSBC European trac | 24 May 10 | 23 Jan 12 | 1.7 | 4% | 3%
HSBC pacific tracker | 6 Jan 11 | 31 Jan 12 | 1.1 | -9% | -9%
HSBC Japanese trac | 6 Jan 11 | 23 Jan 12 | 1.0 | -12% | -12%
Junior oils fund | 7 Jan 11 | 1 Aug 14 | 3.6 | -43% | -17%
Blackrock US tracker | 2 Feb 12 | 1 Aug 14 | 2.5 | 41% | 13%
Blackrock European | 2 Feb 12 | 1 Aug 14 | 2.5 | 37% | 12%
Blackrock Pacific trac | 2 Feb 12 | 1 Aug 14 | 2.5 | 16% | 6%
Blackrock Japan trac | 3 Feb 12 | 1 Aug 14 | 2.5 | 23% | 8%
HSBC FTSE 250 Index | 29 Jul 14 | 27 Sep 16 | 2.2 | 18% | 7%
HSBC FTSE 250 Index | 5 Aug 14 | 27 Sep 16 | 2.1 | 18% | 7%
HSBC FTSE 100 | 5 Aug 14 | 27 Sep 16 | 2.1 | 8% | 4%
Vanguard US index | 10 Feb 15 | 26 Sep 16 | 1.6 | 26% | 13%
| | Average | 3.2 | 49% | 12%
Share save
I acquired a significant number of shares in Johnson Matthey as part of an employee share save schemed. When I left the company, and they bacame available to sell, I top sliced some, and invested in FTSE trackers to reduce my exposure to a single company. I then held the rest until 2016. These have been very good to me and have more than doubled in face value and returned something like 14% year on year.
Shares
Following my review of my actively purchased shared (everything except JMAT), I think I have identified a few common trends:
- Incomplete research into individual shares.
- Too many purchases based on internet posts.
- Failure to keep records of my reasoning to purchase.
- Failure to keep track of my shares.
- Purchasing too many individual shares.
- Failure to sell when the circumstances changed.
- A tendency to follow the crowd (lots of small oil in 201).
Overall, my active share portfolio lost 14% of the invested value. Thankfully, my profits from my more passive investments made a much larger profit (granted that these were over longer / different time periods) JMAT made ~3x the value of the other shares losses, and the Funds made >10x more profit.
For the sake of completeness, here is my list of shame:
Code: Select all
Share | Purchase | Sale | Period | % profit | % profit
| Date | Date | (years) | total | comp
Parkmead | 08/11/2010 | 30/12/2010 | 0.1 | 228% | 100%
Coastal | 01/03/2013 | 27/01/2014 | 0.9 | 125% | 59%
Premier oil | 19/01/2012 | 31/07/2014 | 2.5 | 248% | 39%
Quintian | 21/02/2011 | 15/10/15 | 4.6 | 216% | 22%
Barclays | 28/01/09 | 24/01/12 | 3.0 | 135% | 25%
Jmat | 01/01/2011 | 28/09/2016 | 5.7 | 138.1% | 14%
Berkshire Hath | 06/02/2015 | 26/09/16 | 1.6 | 10% | 6%
Indegovision | 11/01/2011 | 31/07/2014 | 3.6 | 18% | 5%
Parkmead | 27/06/2012 | 03/07/2014 | 2.0 | 9% | 4%
Aviva | 21/01/11 | 29/09/16 | 5.7 | 21% | 3%
Statoil | 24/01/2012 | 30/07/2014 | 2.5 | 1% | 0%
BP | 09/06/2010 | 26/09/16 | 6.3 | -1% | 0%
Encore | 29/03/2011 | 19/01/2012 | 0.8 | -2% | -3%
Dominion | 29/03/2011 | 01/12/2011 | 0.7 | -2% | -4%
Soco | 04/11/2010 | 26/09/19 | 8.9 | -46% | -7%
Arian silver | 21/02/11 | 03/07/14 | 3.4 | -22% | -7%
Bank of Ireland | 11/03/11 | 03/07/14 | 3.3 | -31% | -12%
BG | 27/03/12 | 31/07/14 | 2.3 | -23% | -12%
Tesco | 24/01/2012 | 26/09/16 | 4.7 | -47% | -15%
OPHIR | 01/12/2011 | 31/07/2014 | 2.7 | -38% | -19%
Salamader | 29/03/2011 | 03/07/2014 | 3.3 | -55% | -28%
Lenovo | 28/07/2014 | 26/09/16 | 2.2 | -40% | -26%
Tullow | 27/03/2012 | 03/07/2014 | 2.3 | -46% | -31%
Morphosys | 28/07/2014 | 26/09/16 | 2.2 | -47% | -35%
sound | 07/01/2013 | 03/07/2014 | 1.5 | -33% | -30%
Falkland | 24/01/2012 | 30/07/2014 | 2.5 | -56% | -38%
Rockhopper | 11/01/2011 | 03/07/2014 | 3.5 | -77% | -53%
Europa | 14/01/2011 | 03/07/2014 | 3.5 | -77% | -53%
Gulf Keystone | 23/01/2012 | 31/07/2014 | 2.5 | -59% | -43%
Xcite | 14/01/2011 | 03/07/2014 | 3.5 | -83% | -67%
Sterling resour | 10/01/2011 | 03/07/2014 | 3.5 | -86% | -77%
Santander | 14/01/2011 | 23/01/2012 | 1.0 | -27% | -35%
Bowleven | 28/02/2011 | 03/07/2014 | 3.3 | -88% | -91%
Vatukuola | 28/01/2011 | 01/08/2014 | 3.5 | -100% |
Aminex | 14/01/11 | 01/08/13 | 2.5 | -90% | -151%
Deo petrol | 07/03/2011 | 27/06/2012 | 1.3 | -57% | -90%
Hiwave | 11/01/2011 | 19/04/2013 | 2.3 | -100% |
Looking at the list, It's obvious that I jumped on the oil bandwagon at a bad time. And while, I was happy to hold long term / stick my head in the sand and wait for a recover. Bankruptcies / takeovers forced my hand on a number of occasions.
Of my active shares, a few did come up good. But looking at the data, I can only claim luck and not judgement. I did the majority or my purchasing in 2011 and 2012. On average these lost 24% before they were sold, while the FTSE 250 (my index of choice at the time) went up 50% between Jan 2011 and Dec 2013 without dividends.
My conclusion is quite simply, that I don't have the temperament for active share purchasing. Therefore, I have a new strategy that is 100% passive with occasion re balancing.
That will be a separate post.
I'm not sure there is any point to this post, other than to illustrate how poor share selection compares to a bunch of trackers and to remind me of what I have decided to go 100% passive, but any comments or questions would be welcomed.
Regards
Buzz