The 2 stock portfolio.

[XFool]

...Hooray!

[Pastcaring]

Minnow the correlation between CBA and NAB from 1991 to 2005 began drifting in 2005.
At market peak Nov 2007 NAB was at $40,CBA was at $62 the index was at 6800.
The GFC collapse resulted in the index going down 50% to 3400 at bottom,March 2009.
NAB collapsed from $40 down to $17.
CBA went from $62 to $26 or 27.
There is no safety in diversification,doesn't matter how many people deny it.
Without reinvesting dividends you can now follow those for the rest of your life. From March 2009.
CBA from $27 to $98
The index from 3400 to 7100 roughly.
NAB from $17 to $30.

Taking it further back to when I started in 1982 the prices were approx
ANZ $2.50 to $3.
NAB the same
WBC the same.

2022 still roughly the same.
ANZ $22 or 23
WBC $21.
NAB has had a bit of a breakaway again in the last 18 months or so, so it is $30 roughly .
The undeniable facts will always be denied by the herd , 99% of people .Dumb as a rock.They'll do exactly the same over the next 40 years The sheer stupidity of denialism.

Reinvesting dividends over that 40 year period then you've got 8000 shares in each of them,roughly.

31/12/22 check the price ,8000 shares in each of them.To get that money on that date you needed to spend $9K in 1982..
They say it's the 8th wonder of the world,the sheer simplicity of doing nothing and watching compounding occur.
The infinite stupidity of the masses as they spend every day of that 40 years denying the undeniable..

Obviously you can also see how the well diversified portfolio went,just as useless as ever .Start AXJOA at 9000 in 1982.See what it is on 31/12/22 and multiply that number by 9.Chop off 25% for fees and charges over that 40 years,

Getting it roughly right is far better than getting it precisely wrong to 3 decimal places..

[Pastcaring]

The cause of the divergence in NAB and CBA was ridiculous.Banks can be as dumb as the crowd without any problem

There were 2 possibly 3 scandals,perhaps from 2001 to 2005..NAB have never recovered from them and I don't expect them to recover in my lifetime.The whole risk management and compliance procedures of the bank were seriously questioned and regulators were very annoyed..
They didn't t lose much in the grand scheme of things but the stench still lingers today.Perhaps $800 million over the 2 or 3 scandals.The straw that broke the camels back was 2004 or 2005..The Forex scandal.The options traders on the Forex desks began to cover up losses on the desk..Perhaps a Nick Leeson moment.
When it was discovered that was the straw.i think the losses were around $350 - 400 million.,heads rolled,2( ?) traders were jailed,and they've never recovered from that.

[Pastcaring]

Check AMP ,I think it is Shane Wright insights,it may be blocked it may not.

The usual long term compounding ,Jeremy Siegel gives the same info in his book Stocks for the long run ,his info is for the US market.The value of $1 invested for 200 years.

Shane Wright is $1 in the Australian market for 120 years All dividends,/ interest reinvested.
Cash $243
Bonds $901
ASX $757,000.

I know the history of Wesfarmers as I own it .The original $2 share in 1914 is now around $ 3.5 million,without reinvesting dividends 1914 was exactly the same as today,not buying shares in WES too risky,so it has a very small number of shareholders at retail level,and a large shareholding by pension funds that love it..
From memory I think the retail shareholders number around 0.8% of the population .

The closest I can come to for reinvesting dividends is the great grandson of one of the original farmers that started Wesfarmers by pooling money for the co-op to bulk buy fertiliser cheaper.
Still on the same farm,still earn good dividends,and still reinvest in dividends Without the value of the now farms the WES shares are worth around $350 to $400 million

[Pastcaring]

Moderator Message:
Irrelevant quote deleted.

TJH

The site seems to continually block me.
The next purchase was when the govt sold off the bank they owned ,CBA in 1991.Wash,rinse,repeat,compound.
$5.40 a share in the IPO,call it$6,you had to buy on market as it was really scaled back for the applicants ( me).12 to 13 year periods so the price would go $6,12,24,48 over the period.Round the $48 to $50. Obviously the shareholding would start at 1000 then 2,4,8 So 8000 shares on 31/12/2031.
As Buffett said ,buy shares in a company that an idiot could run One day an idiot will be running it.Westpac have had some idiots running it,perhaps all of them.They annoy me but, discipline . They annoyed me as a customer,so I left.They annoy me as an owner,I'm too lazy to leave.

CBA annoyed me as a customer on a margin loan so I left.As an owner they are great,they choose the right people at board level and haven't had an idiot yet.One day they will.

On the 12 ,13 year horizon then in 2003 they hit top.$34,great company to own.They crashed to $23,I picked bottom within a few cents and bought more.

The next chance came during the GFC .Discipline,pay attention when they crash I bought more at $40 roughly.Bittom was around $26,ah well They picked bottom and had a capital raising at. $26.I had no money and was a bit worried,that was a bigger crash than I thought .Missed it..The wall of worry quickly eased,6 months later than the bottom of March 2009 they were back up to $60 ish What a relief..

They continued rising and hit $96 by 2015 or16..Another chance came, ,by March 2018 they were down to $72.The start of the 2 stock portfolio .I bought,I think bottom was around $66.I had no interest at all in looking at prices then,unless the screams of a crash woke me up..
The importance of thinking for yourself is obvious.Westpac is now 205 years as a listed company.The number of people that own 1,000 shares or more is around 1% of the population.,after 205 years.Pathetic isn't it..There is always a chance they can go bust,they don't disappear overnight.

[Pastcaring]

Bring it to this year People are dishonest,it is difficult to find people to trust,and people that think.

This is what we are going through now,two people I trust made a choice.I did the opposite to them.Say we all owned 1000 shares in CBA on 1/1/22..Worth $100K.
They called top and sold,they didn't tell me how much they sold,but they were definately hanging on to CBA in part.

No way am I selling,I have an order in at $85 a share,it expires at the end of this year.If I get them,I get them.If I don't,I don't .

The rough numbers are say they sold 500 shares and paid the CGT on them.They have 500 shares in CBA and say $40K in cash,probably less.I have 1000 shares in CBA.
The start point is $100K in CBA for me,500 in CBA for them and $40 K cash.
I can't pick bottom,neither can they. I would doubt they will go back in.They now have sleep at night money..I didn't think the shares would go down,they did.

From a top of $112 ish a share ( March this year?) they dropped to $90 ish.I didn't buy.However the order went in at $85..If I get them at $85 then at the end of this year I have 1100 shares in CBA ( obviously bought 100).

At the end of this year they have 500 shares in CBA and $40K cash.
I have 1000 shares in CBA ( hopefully 1100).I f I picked right I get free beer for six months. If they pick right I will be really happy that they made the right choice,really really happy.They get free beer for life,I am far wealthier than they are.
If I picked right I will decline the six months free beer.They know I will.If they picked right they will decline the lifetime free beer,however I will force free beer on them every chance they give me.The fun for the year is the main thing.

After 31 years the number of people that directly own shares of 1000 and up in CBA is 0.7% of the population.At my level,( between 10,000 and 100,00 ),direct ownership is 0.03% of the population.
Think for yourself,don't follow the crowd,and realise that time is money ( compounding).
You seem to be trying to find that path I hope you find it.

[Pastcaring]

WOW,time flies when you're laughing at the popular delusions and the mass insanity. Five years of the 2 stock portfolio,five years of infinite stupidity,self delusion and fanatical denialism from the lemon fool echo chamber.This is great fun The most fun you can have with your clothes on perhaps.

The level of insanity we have reached of course is to deny that a 2 stock portfolio would have 2 stocks in it.I'm spoilt for choice though,an outstanding level of stupidity shines through.Never underestimate how dumb people are when they form groups and echo chambers.

How is fantasy world going?

[Pastcaring]

Above was a test,the site seems to either time out or block me.We wouldn't want to live in reality now would we.

So everybody be afraid,very afraid.Here comes reality and sanity,terrifying isn't it

The start ,31/3/18.I rounded the prices up so $105 each for macbank ( MQG ) and $72.50 for CommBank ( CBA).
Here we are 5 years later and things are going well,let's see how it went ,we've reached the first waypoint on the journey.Obviously the shareholding has increased using the DRP.Who knew that would happen,investing is just so complicated isn't it.

The holding is now 1252 shares in CBA,and 1210 shares in MQG.Prices on 31/3/23.I wouldn't be surprised if people denied that that was 5 years,such is the infinite stupidity/insanity.

[Pastcaring]

Just in case of time out or whatever.
CBA 1252 X $98.32 = $123,096.

MQG 1210 X $175.66 = $212548.
Now remember the infinite stupidity and the fanatical denialism,we'll deny that shall we,who would choose to live in reality

Rounded $335,,600.The year started at $300K if I remember correctly ( cue fanatical denialism).For the 9 month period up 11.8%..I can't be bothered to check Forex rates so we'll take at $1 = 55p.This would be £ 0 to £ 184,500 in 5 years. Average growth over the 5 year period 13.5% compounding.You'll outperform almost everybody at that rate.Debt to equity ratio is looking great at $130 to $335.Cost/ benefit analysis is very good,income is now around $7250 a year in dividends.This will only get better as dividends increase and the shareholding increases Complicated isn't it

[Pastcaring]

In case of time out

Obviously ( but not obvious on fantasy world ) your wealth is increasing at an average of £37K per year over the 5 year period,rounded of course Is this more than UK average annual income over that period?

Why would anybody choose to do that .On fantasy world it is far more productive and rewarding to spend a lifetime of bleating Enron went bust and jimsusan bought shares in Lloyds bank.

As well as being very complicated investing is also very time consuming .A 2 minute a year job now to check that compounding is going at a 12% minimum until the next waypoint,10 years.Ten years in the world will be exactly the same,infinitely stupid people that deny undeniable facts. Fantasy world is just such a great place live and compound stupidity Who would want to compound money.

If you're not spending 99% of your time doing nothing then you're just not doing it right.The 1% of time of course comes in should things change .Really complicated isn't it.

So let's go for another 5 years of being as dumb as a rock and fool ourselves how important it is to get more and more fanatical in the denialism department.We'll see how reality looks after 10 years.

Don't forget after 10 years,well,it's just more years of confirmation bias,or survivorship bias and of course luck.So many people just have so much bad luck over their lives The shareholder breakdown in the annual report tells you how unlucky people are.99.9% will never directly own 1000 to 5000 shares in either of those companies.

Now this will sound silly but could it be the fools that refuse to see their own folly .NAH,how ridiculous would that be.

[Pastcaring]

Do feel free to check the maths,as I age I can see how my mental arithmetic ability wanes.When I can't stop laughing at the lemon fool echo chamber this also adds a bit of complication

[Bubblesofearth]

Do feel free to check the maths,as I age I can see how my mental arithmetic ability wanes.When I can't stop laughing at the lemon fool echo chamber this also adds a bit of complication

MQG and CBA both up around 40% since OP back in April 2019. £/AU$ about the same. FTSE100 little changed. All World Index up 26%. Aussie SM up 17%.

So a good relative performance from the 2 share portfolio.

BoE

[Newroad]

Hmm.

I'm a bit confused about this so called "two stock" portfolio

...

I know the history of Wesfarmers as I own it .The original $2 share in 1914 is now around $ 3.5 million,without reinvesting dividends 1914 was exactly the same as today,not buying shares in WES too risky,so it has a very small number of shareholders at retail level,and a large shareholding by pension funds that love it
...

Irrespective of the periodic diatribe, would this not be a 3rd at a minimum with WES in addition to MQB and CBA?

A coherent style of writing, investment data a la TJH's style (or anything remotely similar) and less invective would be helpful - assuming that the writer actually wishes others to take notice. If not and the writer is happy in their own echo chamber, all good - no particular harm done.

Regards, Newroad

[MrFoolish]

Do feel free to check the maths,as I age I can see how my mental arithmetic ability wanes.When I can't stop laughing at the lemon fool echo chamber this also adds a bit of complication

I was more concerned about your inability to punctuate and express yourself properly.

[Dod101]

Do feel free to check the maths,as I age I can see how my mental arithmetic ability wanes.When I can't stop laughing at the lemon fool echo chamber this also adds a bit of complication

I was more concerned about your inability to punctuate and express yourself properly.

All best ignored.

Dod

[Pastcaring]

Testing,strange site,or my old phone

[Pastcaring]

[Deletion]

Let's have a look at reality for my amusement.Evidently it wasn't a bad year,I don't know,I never bother looking .The share registry does all the work for me.Money pours into the bank account in dividend income,and they take care of excess cash by reinvesting that cash in more shares in the 2 stocks.

[Deletion]

Off we go dividends increased over the year so your shareholding increased,the price of the shares increased over the year so you are richer.Investing is just so complicated isn't.

Still checking the site tends to time out.

Moderator Message:
Please stop attacking and mocking other posters. It is against this site's rules. If you cannot be polite please don't post at all. I've deleted the offending sentences from this (and the following) post but further such posts will be deleted in their entirety and without notice because of the time it takes to conduct and log edits. Thanks.

I see you have not heeded the warning you were given before on this thread about your unpleasant posting style. If you continue posting in this manner I will recommend your account here be suspended or deleted. - Chris

[Pastcaring]

Now the really complicated maths
CBA
Number of shares ( A) 1252 X ( B,price) $100.27 = ( C ,value.= $125,538.

Ax B = C.[Deletion]
Macbank (MQG) 1210 (A) X $177.62 (B) = (C) $214,920.

[Deletion]now it is
A+B=C, how complicated is that.
$214,920(A) + $214,920 $340 K.Close enough for me,the important thing is to get it roughly right .Then you can have a laugh at the fools that refuse to see their own folly . They insist you've got to get it precisely wrong to 3 decimal places,and of course fool themselves it must be better if I make it more complicated.
We started the year 1/7//22 @$300K.We ended the year at $340K ( 30/6/23 ). Close enough to 13.4% increase for me.Things are going great,still compounding at exactly what you want,somewhere between 12% minimum to make a £million over 25 years and 16% over 25 years as an outlier that is possible.

[Deletion]

Timed out?

[Pastcaring]

Still there.
Now the wash,rinse repeat bit.The first shares arrived today,Macbank,an extra 31 shares using the DRP.The next shares arrive in Dec.

CBA arrive Sept and March .Make it a round 1260 shares in MQG and perhaps 1310 in CBA.That's 30/6/24.Concentrate Newroad,see if you can find a 10 year old to take you through some remedial maths.

A X B = C

A + B = C.
Every year will be the same complicated equations.The future of investing is resting on Terry. He ain't going to turn up to simplify it,I'm 99.9 % certain of that.

That 99.9% is a constant through life,that is the number of people in Australia that will never own 1,000 shares in either of those companies.

Now one of the great mysteries of life,how many stocks does a 2 stock portfolio have,how many pages does a 2 page letter have?

How many blatant lies will the herd come up with to keep fooling themselves that the facts are wrong,the popular delusions are real!

Let's run back to fantasy world shall we.

[Pastcaring]

I used to be on the board of a US defence company. One of my colleagues was a retired US Navy Captain, then in his 70s. He had a one stock portfolio that he swore by and which wound up making him a lot of money. When he'd first had some spare cash to save, he'd started buying shares in GE (General Electric), and over the decades he'd never bought shares in any other company. I can't quote numbers because I never knew the details, but he was extremely happy with his outcome. Investing a lot in just one stock carries an obvious risk, but he had his civilian business success and his Navy pension so he was never going to be destitute. He sadly died a few years ago now, in his late 80s, never having wasted more than five minutes now and again on his 'portfolio'. Sometimes, when I've spent time messing about with diversifying and rebalancing my portfolio of ITs, ETFs, equities, bonds etc I think of him and wonder if I'd have done better to follow his example. Then again, knowing my luck I'd have invested in Woolworths.

I never saw that reply.You'll not believe this , then again you might. Woolworths has been an excellent company to own here ( WOW : ASX).I owned them, and sold them in early 2010 I think.

The GFC made me realise I was overleveraged.WOW came along with a bit of capital management and wanted to buy shares back.I sold the lot and reduced debt.
Around 2015? I was asked for my opinion on WOW.I told the bloke buy them,good company.I think they were around $30 - $35 a share. Leverage up,buy 1000 and reinvest the dividends until you retire ,obviously same answer,how come everybody else isn't doing that. Why did you sell them if it is a good company?.

Perhaps 18 months later I saw him at a sport function.Bought him a beer and off he went,have you seen the price of WOW,you (me) are a fool.They are $20 a share now.I said,I'd never looked at them,you've got nothing to worry about,you didn't buy them and you never will.

By then share prices had increased,dividends had increased,and interest rates had reduced.I was much better off so leveraged up and bought the same number of shares that I had sold.I think the buy back price was $24 with tax advantages when I sold out,and I bought them back 6 years later for $21 ish..Now they are $40 a share.

They were owned by Adsteam ( Adelaide steamship).They were overleveraged when interest rates went up really high ,by 1991 they were on their knees,Australia was in recession.Adsteam couldn't roll over debt and they went bust.

Woolworths was floated @ $2.50 a share so creditors could slowly be repaid.On the dividend yield you'd probably double your shareholding every 15 years. So spending $2,500 in 1992 did you very well. 1,000 shares grows to 4000 shares. $2,500 grows to $160K @ $40 a share.
Timed out?