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The thing I hate most in my portfolio right now...
Sara G
Posted: 01 October 2017 12:07:06(UTC)
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It's said that if there isn't something in your pf that you hate, then you're doing something wrong...

For me at the moment it's Platinum. I bought it for solid reasons:

- Supply crunch on the horizon
- Price cheap relative to gold (historically platinum tends to be more expensive)
- Negative sentiment over reduction of use associated with fewer diesel cars is arguably over-done
- Demand from other industrial, jewelry and investment sectors could grow
- To diversify my pf

At the moment it's just not happening; the red number is getting bigger and dollar weakness makes the picture look even gloomier. My natural instinct is to buy more but I am restraining the urge for now as there is no sign of an upturn in the next year at least according to analysts. Others on this forum would no doubt sell at this point on the prospect of buying in at a cheaper price if the current trend continues. But perhaps the sensible thing is to ignore it for a while and accept it as the inevitable corollary of diversification...

I'm curious to know what others' unloved holdings are (if any) at the moment, and whether you are planning to take any action or stoically sticking to your asset allocation strategy...?
6 users thanked Sara G for this post.
Mickey on 01/10/2017(UTC), Guest on 01/10/2017(UTC), Tim D on 01/10/2017(UTC), Mr Helpful on 01/10/2017(UTC), c brown on 05/10/2017(UTC), Harry Trout on 09/10/2017(UTC)
Mickey
Posted: 01 October 2017 12:31:08(UTC)
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Pacific Assets Trust - A big disappointment over the last year the worst performer in the Asia Pacific ex Japan sector. I was persuaded to keep it by previous writings in the annual and interim reports, emphasising the short-term patience of investors, long term horizon of the trust and the lower weighting to China. Over a long period of time PAC has done very well for me, it's not a 'hate' holding but I have had to resist the urge to sell.
4 users thanked Mickey for this post.
Keith Cobby on 01/10/2017(UTC), Sara G on 01/10/2017(UTC), Freddy4Skin on 01/10/2017(UTC), c brown on 05/10/2017(UTC)
Keith Cobby
Posted: 01 October 2017 13:04:13(UTC)
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Mickey, I sympathise. Perhaps it's just going through a rough patch and will then catch up with the others in due course. After selling my UK holdings this week I topped up Pacific Horizon which has done well recently although not so good long term. The Baillie Gifford trusts have been superb investments over the last few years.
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Mickey on 01/10/2017(UTC), c brown on 05/10/2017(UTC)
Max P
Posted: 01 October 2017 13:22:31(UTC)
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HICL, I bought this a few days before the Labour party threatened to take back PFI projects. Only a few percent down but annoying.
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Mickey on 01/10/2017(UTC), Sara G on 01/10/2017(UTC)
King Lodos
Posted: 01 October 2017 13:43:16(UTC)
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I used to do this a lot more .. The experience of diversifying with Absolute Return funds was a baptism by fire .. (I was holding City Financial Absolute and Argonaut Absolute – when they were two of the top funds over most periods – just before they both plummeted .. About 25% of my portfolio, but almost miraculously I'd just decided to implement a trend-following rule virtually that month, and got out close to the top.)

Right now the closest to an annoyance is Fidelity China Special Sits .. I was selling broad EM and buying China – which was the right thing to do .. But the discount decided to widen about 5-6% for no reason I can fathom .. Which created a dilemma: do I consider the trade correct or incorrect, and do I buy or sell? Lesson learnt either way: don't trade ITs (retail investors are one-trick-mean-reverting-ponies).

I quoted this the other day (Michael Platt in Hedge Fund Market Wizards) – it best describes what works for me today:

I look at each trade in my book every day and ask myself the question, “Would I enter this trade today at this price?” If the answer is “no,” then the trade is gone. Most of the trades that I do stop myself out of, I stop out because of time rather than because of a loss. If I really love the trade and get strongly positioned, and then a month later, it still hasn’t moved, alarm bells start ringing in my head. I think to myself, That is a really great idea you have, but the market is just not playing ball.

3 users thanked King Lodos for this post.
Mickey on 01/10/2017(UTC), Sara G on 01/10/2017(UTC), c brown on 05/10/2017(UTC)
Mickey
Posted: 01 October 2017 14:06:02(UTC)
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Keith Cobby;51600 wrote:
....After selling my UK holdings this week I topped up Pacific Horizon which has done well recently although not so good long term. The Baillie Gifford trusts have been superb investments over the last few years.

Thanks Keith,
BG have been doing very well with their IT's, I am looking at Pacific Horizon also. PAC is about 10% of the portfolios at the moment, I'm tempted to sell down to 5% and buy another but PAC has put a bit of a spurt on this last week with +2% rises on Weds & Thurs iirc.
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c brown on 05/10/2017(UTC)
Rishan
Posted: 01 October 2017 14:18:24(UTC)
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Keith Cobby;51600 wrote:
Mickey, I sympathise. Perhaps it's just going through a rough patch and will then catch up with the others in due course. After selling my UK holdings this week I topped up Pacific Horizon which has done well recently although not so good long term. The Baillie Gifford trusts have been superb investments over the last few years.



Agree with you on Baillie Gifford, Keith (although it will sound like I'm ramping them, as I've posted on it before - I hold SMT, BGS and PHI directly!). Adding to the latter two monthly, only wish I'd had more in them for longer. I first bought SMT and made it my biggest holding early in 2016 and I love it.

I hate UK equity income right now, Dunedin Income Growth IT, in particular. Bought earlier this ISA year, but am in the middle of transferring the ISA account and will (probably) be selling when that's completed.

FGT is my second biggest holding, but I won't be selling that. I don't regard it as properly in the UK equity income sector anyway.

Law Debenture, although in the Global sector, I am not very fond of right now and thinking about reducing back to the stake my old man set up for me 20 years ago. I had since added to it and it became my 3rd biggest holding. It's quite heavy in the UK and I have a lot of crossover with the holdings in my other ITs.

Good thread Sara G!
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Mickey on 01/10/2017(UTC), Sara G on 01/10/2017(UTC), Keith Cobby on 01/10/2017(UTC), c brown on 05/10/2017(UTC)
Mr Helpful
Posted: 01 October 2017 14:25:38(UTC)
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Sara G;51598 wrote:
It's said that if there isn't something in your pf that you hate, then you're doing something wrong...

I'm curious to know what others' unloved holdings are (if any) at the moment, and whether you are planning to take any action or stoically sticking to your asset allocation strategy...?


IGLS : Short-Term Gilts
Not only is the real yield heavily -ve, but the distributions (such as they are) continue to dwindle.
Only solace is that other defensive assets are throwing off real yields to compensate.

Will we stick to AA strategy? : Remain firmly undecided.
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Sara G on 01/10/2017(UTC)
Sara G
Posted: 01 October 2017 15:26:36(UTC)
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Mr Helpful;51605 wrote:
[

IGLS : Short-Term Gilts
Not only is the real yield heavily -ve, but the distributions (such as they are) continue to dwindle.
Only solace is that other defensive assets are throwing off real yields to compensate.

Will we stick to AA strategy? : Remain firmly undecided.


I suppose that's similar to holding cash at the moment - a negative yield in real terms. Come to think of it perhaps I dislike cash almost as much as platinum! But at least it gives me options... Against that, I read in Money Observer that Warren Buffett is planning to deploy about 80% of his very large cash hoard - will be interesting to see what he does with it.

Rishan - I'm hanging on to my UK equity income, but Peter Hargreaves would advise you to sell - there's a story on Morningstar on his new vehicle and it seems that after decades of praising the sector he now sees it as overvalued - growth is the place to be. (NB this may be because said new vehicle is a growth fund of course!)
Jim Thompson
Posted: 01 October 2017 15:39:10(UTC)
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My shares in ITV and Babcock are my bugbear Sara.

When they both tanked I topped up, and then stood back in frustration as they carried on going way down.

They have recovered somewhat but it does make you think, 'what did I do wrong here'. Without the dividend I may have sold out, but I persist with investments which I think will turn it around. I sold JMF a short while ago, just before it started coming back into favour, but then I console myself in thinking JMF duplicated another IT.


2 users thanked Jim Thompson for this post.
Sara G on 01/10/2017(UTC), Hank Elvis Dobbs (texan) on 01/10/2017(UTC)
Jim Thompson
Posted: 01 October 2017 15:40:17(UTC)
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double post - sorry
King Lodos
Posted: 01 October 2017 16:00:40(UTC)
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I'd half say cash is my biggest bugbear .. I'm back up to 41% .. I do whatever I can with current accounts, savings accounts (1.21% at Virgin Money Double Take e-saver on up to £250k), NS&Is, but a lot of it is sat doing nothing.

The problem is cash is fundamental to how I manage money – I'd rather have 50% in cash going nowhere than 50% in stocks going nowhere .. and with the strength in Sterling recently, cash has been something of a trade itself.

The other problem is almost all my investments are Emerging Mkts, Small-Caps, High Yield, Junior debt or personal loans .. On top of record global debt; bubble-like valuations in everything (if that's possible); us theoretically being in a tightening cycle .. I have to remind myself there are lots of reasons to play a strong defence
Sara G
Posted: 01 October 2017 16:57:43(UTC)
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King Lodos;51610 wrote:
I'd half say cash is my biggest bugbear .. I'm back up to 41% .. I do whatever I can with current accounts, savings accounts (1.21% at Virgin Money Double Take e-saver on up to £250k), NS&Is, but a lot of it is sat doing nothing.

The problem is cash is fundamental to how I manage money – I'd rather have 50% in cash going nowhere than 50% in stocks going nowhere .. and with the strength in Sterling recently, cash has been something of a trade itself.

The other problem is almost all my investments are Emerging Mkts, Small-Caps, High Yield, Junior debt or personal loans .. On top of record global debt; bubble-like valuations in everything (if that's possible); us theoretically being in a tightening cycle .. I have to remind myself there are lots of reasons to play a strong defence


1.21% is better than nothing, KL - certainly in absolute terms if you have a lot of cash. I'm definitely a lot more cautiously positioned that I was a year ago and I'm not likely to change that for now.

In your other post you mention FCSS. Previously you've pointed out that the market doesn't care what price you paid for something and I think that comes into play here. I was lucky enough to buy it at a low point so from a personal perspective it looks like it's had a lot of positive momentum, with the potential for more as valuations in China are still relatively cheap, and psychologically it's an easy decision for me to hold / top up.

The Michael Platt quote is spot on in that regard. Do I feel uncomfortable holding / buying platinum purely because it has performed less well than I had expected, when I should be focusing on future prospects? Very likely... It's hard to say whether it's a case of mis-timing or if the market is never going to agree with me though, so I might apply a mental stop loss of 20%.
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King Lodos on 01/10/2017(UTC)
King Lodos
Posted: 01 October 2017 17:21:34(UTC)
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Sara G;51611 wrote:
1.21% is better than nothing, KL - certainly in absolute terms if you have a lot of cash. I'm definitely a lot more cautiously positioned that I was a year ago and I'm not likely to change that for now.

In your other post you mention FCSS. Previously you've pointed out that the market doesn't care what price you paid for something and I think that comes into play here. I was lucky enough to buy it at a low point so from a personal perspective it looks like it's had a lot of positive momentum, with the potential for more as valuations in China are still relatively cheap, and psychologically it's an easy decision for me to hold / top up.

The Michael Platt quote is spot on in that regard. Do I feel uncomfortable holding / buying platinum purely because it has performed less well than I had expected, when I should be focusing on future prospects? Very likely... It's hard to say whether it's a case of mis-timing or if the market is never going to agree with me though, so I might apply a mental stop loss of 20%.


Yeah, and I suspect our true inflation figures aren't much above 1.2% .. We will have had a hefty boost from falling Sterling .. And there are good arguments that deflation's still the more likely long-term picture.

And that's it – you have to look only at what the information today tells you about tomorrow .. But then I suppose the problem with that kind of market timing is you can be absolutely right or absolutely wrong – and then you're really reliant on price information that makes sense.

I find IT discounts a bit like when they attach a pendulum to a pendulum, and suddenly the predictable swinging becomes chaotic .. I'd have to adopt the mindset of buying temporarily out-of-favour again .. I bought into TRG as well at the same time, when it had just gone to a premium – and sold out flat, because I could tell people were desperate to take profits.

I had to condition myself out of that behaviour, because I think it's why retail investors do so poorly, long-term.

It works most of the time (buying low and selling high), and gives you a constant positive feedback, and modest extra returns .. But it's the times the dip becomes a drawdown – or the high becomes Amazon returning 3,000% – where you give most of it back, or miss out on the real opportunities .. and to me it's very Martingale-esque




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Sara G on 01/10/2017(UTC)
andy mac
Posted: 01 October 2017 18:38:22(UTC)
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King Lodos;51612 wrote:


Yeah, and I suspect our true inflation figures aren't much above 1.2% .. We will have had a hefty boost from falling Sterling .. And there are good arguments that deflation's still the more likely long-term picture.



As the man said you cannot be serious

Personal inflation must be chugging away at 5%. I dont buy half the things in the basket but me utilities , council tax etc are all up more than 1.2
Travel insurance up 19% so that went and I got better elsewhere for less
Motor insurance up will be moving
I was asked to pick up a prescription over £8
My daily shopping basket is now £20+ not that long ago it was less than £10
I wont mention my Swiss holiday actually I will cost me 20% more, similarly the the pre christmas trip to Grenada 20% more , car service £100 / hour labour
So if your inflation is only 1.2% can I come and live where you do

Funerals are on the way up as well so the cost of dying is certainly up more than 1,2 or even 2,9%

but back on message what thing do I hate most is ITV but it currently pays a good divi so will wait for someone to buy it. Bprsm aint do anything special so thats an offload sometine soon

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Sara G on 01/10/2017(UTC)
King Lodos
Posted: 01 October 2017 19:26:09(UTC)
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You may well be right .. But a lot of this is likely to be cost-push inflation (due to Brexit and the fall in Sterling pushing the costs of imports, raw materials, etc. up) – which is likely distorting our official 2.6% inflation figure.

So we're seeing decent inflation in some parts of the economy, but not in others where it should be .. I think if we knew 2.6% was where inflation was likely to stay, we'd be raising rates already
Richard Proctor
Posted: 01 October 2017 19:43:31(UTC)
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Hi Sara

That will be BlackRock Gold & General for me. Down around11% from purchase earlier this year. I bought it as portfolio diversification, but I think I should have bought a physical gold tracker instead.

For those of you hold gold as a diversification tool, how frequently do you rebalance or do you move in and out of gold?

Beginning to wonder whether I should just leave any gold holding to the like of PNL!

Regards

Richard

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Hank Elvis Dobbs (texan)
Posted: 01 October 2017 20:05:05(UTC)
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Jim Thompson;51608 wrote:
My shares in ITV and Babcock are my bugbear Sara.

When they both tanked I topped up, and then stood back in frustration as they carried on going way down.

They have recovered somewhat but it does make you think, 'what did I do wrong here'. Without the dividend I may have sold out, but I persist with investments which I think will turn it around. I sold JMF a short while ago, just before it started coming back into favour, but then I console myself in thinking JMF duplicated another IT.



...Howdy...Babcock just registered on the squeaky bum chart...looking increasingly like a re-test of 800 (794).....be ready folks
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Sara G on 01/10/2017(UTC), Jim Thompson on 02/10/2017(UTC)
King Lodos
Posted: 01 October 2017 21:29:19(UTC)
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Richard Proctor;51619 wrote:
Hi Sara

That will be BlackRock Gold & General for me. Down around11% from purchase earlier this year. I bought it as portfolio diversification, but I think I should have bought a physical gold tracker instead.

For those of you hold gold as a diversification tool, how frequently do you rebalance or do you move in and out of gold?

Beginning to wonder whether I should just leave any gold holding to the like of PNL!

Regards

Richard



Try this, re: rebalancing (link) .. 75% Stocks, 25% Gold, rebalanced annually .. and in the 5th drop-down menu can try rebalancing monthly, quarterly, etc.

Long-term, annually tends to work slightly better (talking maybe half a percent a year), because rebalancing has a bit of a negative momentum effect .. But
rebalancing often (even weekly) tends to smooth out short-term volatility quite well.

https://www.portfoliovisualizer.com/backtest-asset-class-allocation?s=y&mode=2&startYear=1972&endYear=2017&initialAmount=10000&annualOperation=0&annualAdjustment=0&inflationAdjusted=true&annualPercentage=0.0&frequency=4&rebalanceType=1&portfolio1=Custom&portfolio2=Custom&portfolio3=Custom&TotalStockMarket1=75&Gold1=25

Re: gold miners .. They're not a good sector to buy-and-hold with 10% of your portfolio .. If I were more buy-and-hold, I'd have something between 1 and
5% gold miners .. I'd probably have 1% miners and 9-10% a physical gold ETF (but that's not a magic number .. In the backtests, you usually do better
with 20-25% gold .. And in the 60s/70s that would've been quite normal .. Gold was considered a serious investment, and stocks at that time were seen
as more speculative .. If we have a repeat of the 70s, we'll probably go back to that way of thinking).
Tim D
Posted: 01 October 2017 23:06:18(UTC)
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My current most-hated is a small holding in Neptune Japan Opportunities, bought some years ago on the back of particularly liking something or other the manager was saying in some article. It did good for a few years before having a terrible time 2015-2016 which completely wiped out its previous outperformance. Not much detail/excuses in the annual report beyond:

Quote:
The Neptune Japan Opportunities Fund had a difficult 2016, gaining 2.56%. In comparison, the TOPIX Index’s returned 23.41% and the IA Japan sector average return was 23.30%. ... The Fund’s total underperformance came mostly from its yen hedge position, as the currency gained just over 24% against sterling during the period, whilst positive stock selection provided around a 2% offset.


Another contributor to increasing my aversion to mixing currency hedging with equities. Of course if Brexit had gone the other way it'd presumably be a different story.

I don't like to sell anything before I've held it for at least 5 years so it does get a bit longer to prove itself; most likely it'll destined to be sold and folded into one of my Japanese passives.
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Sara G on 02/10/2017(UTC)
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