This journal logs investment transactions made in the portfolio. Hopefully it will help me be more rigorous/honest with myself.
- Buy BMW/DAI. I’m underweight International Equities, and on a bit of a whim have decided to do something significant about it. I’ve just taken reasonable (read: portfolio average) new positions in these two German car/truck manufacturers. Both are on low P/Es, with high dividend yields. But both have significant debt, so the P/E is misleading. Nonetheless, these are 100 year brands and the dividend yield tempts me. I’m effectively borrowing EUR to buy them; borrowing at 1.5% to buy 5%+ is a reasonable spread.
- Buy AMZN. A limit order just triggered, signalling AMZN has just dipped below a level I thought (some weeks ago) would represent a buying opportunity. This is quite punchy of me because this holding is already one of my largest single stock holdings. And my US equity holdings are overweight too. However, rules are made to be broken.
- Buy RTN. Yikes. Miserable sector. Leading player, with miserable brands. Patisserie Valerie there to show the Worst That Can Happen. And yet, the acquisition of Wagamamas makes sense; the share price is down 15% taking into account the impending rights issue; I rate the CEO. I’m topping up.
- Buy XRO. I’m underweight AUS. And XRO has fallen in line with other highly rated unprofitable tech firms. I think it will come back. I’m topping up, significantly.
- Buy ASY. I’ve liked this one since Maynard Paton put me onto it. Time to top up, to help my underweight UK equities position.
- Buy BT.A. BT has halved in the last 2 years, and now sports a well-covered 6% divi yield. As an EE (owned by BT) customer I think EE whips its competitors’ backsides, and may be an undervalued asset. New CEO announced today, from Worldpay. Hard to see BT halving, and easy to see it doubling. I’m upping my (very small) position.
- Buy PSN. Persimmon is down almost 30% from its peak. Divi now 10%+, with strong credibility. Almost whatever happens in UK with interest rates, Brexit, currency etc I believe Persimmon will grow. I’m topping up my considerable position.
- Buy VFEM. I’ve been underweight International equities already. But in the recent selloff Asia has been harder hit than Europe/USA. The rebalancing continues.
- Buy VPAX. More rebalancing towards International (Asia).
- Buy H50E. More rebalancing towards International (Europe). This is only 10% down from peak, so less of a ‘bargain’ than the Asian stuff.
- Buy HSV. I’m underweight UK equities so am shopping around. Homeserve is a business I’ve admired for years. And owned before, until the Great Liquidation to buy the Dream Home. Its growth momentum remains strong, it has a founder CEO, and it is making an impressive fist of becoming international. Its Checkatrade acquisition worries me but you don’t get return without risk. Not quite sure what price represents value so I will watch and learn.
- Sell LLPC. A slight tweak to my target allocation a couple of months ago left me overweight in UK fixed income. Time isn’t fixing this, so I need to intervene. I have a direct holding in a Lloyds Bank 9.25% preferred shares which is rather too large for a single holding, and while its price is down and the bid/offer is painful, I’m taking some profits.
- Sell ISXF. As per the LLPC move, I am intervening to reduce my UK fixed income position slightly. No particular reason to pick this ETF other than that I am generally less in favour of corporate bonds than I was.
- Sell VUCP. And in line with my UK fixed income reductions, I also find myself needing to reduce my US fixed income positions slightly. I am less in favour of corporate bonds than I used to be so this Vanguard ETF is going to take the hit.
- Buy DAI. Daimler is down 30%+ from peak. Rev and profit growth has stalled. But it owns one of the world’s top brands, has a P/E of 6, a dividend yield of 6% (covered 2.4x), global reach, unique technology, etc. Unfortunately, German governance. But a Buy, I reckon, and I’m underweight ‘International’ so this helps.
- Sell KO. Closing this small position in the ultimate Buffett stock. Hasn’t been a great experience and hardly any millennial I know drink Coke so I think it’s time to bail.
- Sell VZ. Reasonable dividends but very low growth. Hard to believe in double digit growth. I’m pruning, as I’m a bit overweight USA equities.
- Buy ALU. Alumasc, a smallcap specialist construction manufacturer, has dropped 10% since I opened my position in January. I’m throwing good money after my badly timed initial investments. I like the underlying thesis, the risk exposure, and (irrationally) the thought I’m buying a meaningful piece of this <£50m cap business.
- Buy BAe. Topping up my position, due to being underweight and thinking that amidst the Brexit noise the UK’s top defence manufacturer is probably a Buy right now. Nothing more scientific than that.
- Buy VFEM and VAPX. I am underweight ‘international’ and am breaking out of my Eurozone-philia to increase my exposure to Asia/emerging markets.
- Buy SAUS. Am underweight Oz and post MIFID this is one of the few ETFs I can readily buy.
- Buy MEUD. Rebalancing towards ‘international’.
- Buy VUTY. Am a bit short of US fixed income. And realising I have barely any Treasuries. Time to fix.
- Buy VUKE. A minor buy to help deploy my a cash influx as per my rebalancing.
- Buy ASL and SDV. Buys to help deploy cash influx – towards the Aberforth and Chelverton smaller cap investment trusts. Smaller cap was where one of my asset sales came from so re-upping makes some sense.
- Buy WKP. I’ve always liked Workspace Group, and all the recent media fuss about how WeWork is overvalued leaves me feeling that Workspace group is undervalued.
- Buy FB. Opening a position on the Zuckerberg Faang. It has just dropped 20pc, and lost $120bn of value in the biggest ever one day single company drop. Overreaction? We’ll see.
- Buy VEMT. Just been reminded of this Vanguard Emerging Markets Gilt (/Govt Bond) ETF. I have generally gone for corporate bonds not treasuries but for some reason am now biting the bullet and going sovereign. And I’m underweight ‘international’ so this one is a good fit.
- Buy SKT. I am an admirer of Dividend Aristocrats (those US firms with very long track records of maintaining/raising dividends), and found this article about an Outlet Store REIT interesting. I’ve opened a small position – it would have been bigger but it isn’t quite in line with my rebalancing requirements. https://seekingalpha.com/article/4177633-deeply-mispriced-dividend-aristocrat-6_7-percent-yield-growing
- Buy PG. Just spotted that you can get 4% divi yield with P&G. That is a rare opportunity. I’m opening a small position.
- Buy DAI. I am underweight ‘international’ (which is mainly Eurozone, in my system). I am open to direct stock picking but struggle to find decent businesses where I trust the governance; Daimler looks like it fits the bill. A global brand, but facing a slight dip currently, hence a P/E of 7 and a div yield of >5%. A long term buy at €66/share.
- Buy EWN, EIS. Upweighting ‘international’, this time with new positions – in passive tracking iShare ETFs of two countries I visit occasionally: Netherlands (high P/E, diversified global leaders like Phillips, Heineken, Unilever) and Israel (almost ’emerging market’, and no overlap with my current holdings).
- Buy MEUD. The Lyxor Eurostoxx 600 passive tracker. After monevator’s article about Lyxor’s low-price ETFs, I’m adding this ETF to my core holdings list, and it helps me upweight into International nicely. My private bank had not traded it before, which tells you it’s helping me diversify out of the crowd too (!).
- Buy AHT. I confess I can’t quite remember why I opened this position but think it was its dividend prowess and solid financials.
- Buy T. Back down to $34 – for reasons currently unknown – which puts its dividend yield above 6%. That doesn’t happen very often with this Dividend Champion. I have been a long term – but small – holder in this stock. Very stable share price ($33-$40), very slow dividend growth. But with 6% yield there is, based on the trading range, a better-than-usual chance of a 10%+ total return over the next 12 months.
- Buy VFEM. Who’s the fool who’s buying Emerging Markets just as Trump kicks off a trade war targeting, erm, Emerging Markets? Me. I’m underweight on ‘International’ and don’t have a preferred source of exposure to just getting the passive holding. Though I am tempted by some of the markets highlighted here: https://thebritishinvestor.com/2018/02/ten-cheapest-countries-cape-ratio-2018/.
- Buy ALU. Alumasc is a stock tip I saw in January that tickled my fancy; it has fallen from £1.70 to £1.25 and I think, rather than discrediting the stock tip, it represents a buying opportunity. I’m extending my position.
- Sell GE. Have held GE for ages, more fool me. Now getting out to get the capital loss before the end of the UK tax year. Might come back in in the the next tax year depending what happens on the mood music.
- Sell TLS. I’m realising that if I am getting out of VOD then I should get out of TLS, the incumbent Oz telco. Broadly it should be a stable cashcow but with the ‘high speed broadband by fiat’ government interference down under it isn’t plain sailing for them. I’m not close enough to it. I’m off, and getting some of my loss back from the UK government.
- Sell VOD. Realising that I can’t see any reason to hold Vodafone these days. 5% yield aside, it is not a product I would recommend in the UK (vs EE who as a recent convert from O2 I find to be excellent), and my limited understanding of the business itself centres around the very difficult time it is having in the Indian market. If I want a good telecoms utility I think Verizon is the best blue chip in the space.
- Buy JUP, SDR. Jupiter fund management and Schroders have been on my mind for a while – since Stockopedia tipped JUP in the new year (at >600p). Recent price dips (to <500p) create a buying opportunity, I think, so I’ve initiated a position in both.
- Buy TW, PLUS, SCS, RPC. Just taking a look at Stockopedia’s StockRank system. Quite a lot of its top-ranked stuff is either hard to trade (microcap etc) or makes me nervous (mining, etc) but I’m going to take a nibble on PLUS500, SCS Group, RPC Group, and Taylor Wimpey.
- Sell BARC, HMSF. Finally quitting @weenie’s Money Stock League experiment. Picking five random stocks (alphabetically, beginning with B) wasn’t the path to riches, but nor did it do too badly. After two years, weenie reckoned I was up 7% including dividends. I’m keeping BAG, BA. and BAB and selling the other two.
- Sell ISXF. Further deleveraging, further getting out of corporate bonds.
- Sell ISF. Swapping some Passive for some Active exposure to UK equities.
- Sell VTI. Minor deleveraging trim of this core US Equities position. The only sensible thing to do when reading that S&P500 has got a Sharpe of 3+ in 2017, surely? I am going to crystallise quite a gain here unfortunately.
- Bought H50E. I am underweight on International Equities, and I keep reading how European equities are ‘relatively good value’. Certainly there aren’t too many direct holdings that appeal to me, so the top 50 ETF works for me.
- Bought RGL. First nibble here of a Regional REIT, whose yield (7%+) and strategy (non-London commercial warehouses etc) appeal to me.
- Sell T. Limit order just triggered at $38.
- Sell SLXX. Mild deleveraging trim to my position. Increasingly I am persuaded of http://www.monevator.com et al.’s argument that the only true bonds are government bonds, which means my corporate bond exposure is uncomfortably large.
- Sell JNK. Am overexposed fixed income. And becoming increasingly aware of the ‘faux bonds’ quality (i.e. low correlation) of high yield bonds. Good candidates for reducing my position on.
- Sell PFF. Becoming increasingly aware of the ‘faux bonds’ quality of faux bonds i.e. preferred shares. Good candidates for reducing my position on.
- Buy PCLN. Limit order just triggered. Not sure why yet.
- Buy T. Limit order at $36 just triggered – I haven’t yet figured out why the stock dipped from $38 to $36 but this is probably a long-term buying opportunity. Fingers crossed….
- Buy WPP. Being a bit naughty here as I’m overweight in UK but WPP at 3 year lows – which looks too good an opportunity to miss. I bought a few times this month, just nibbling really.
- Buy QCOM. I am underweight US equities, and QCOM is on a slight dip. I’m topping up.
- Buy DIS. As per QCOM – Disney is at the price it was 18 months ago despite some useful growth since then. I’m getting in deeper.
- Sell TGT. Based on my usual rule of thumb, I should be buying more of Target. Its dividend yield is more compelling than ever. However the reason the share price is down is that the market considers Target to be the next in line to be flattened by the AMZN steamroller. I am minded to agree with the market. I’m trimming my position.
- Buy WPP. I have long had a small holding in WPP, which hasn’t gone very far. With the recent profit warning/correction, the price is down to the level last seen 3 years ago. The business is quite a bit bigger, and despite gloomy global prospects it is the classiest act in this massive sector. I am topping up.
- Sell ISXF. I am deleveraging, and generally doing this by reducing my fixed income exposure. I’ve set some limit Sell orders on a few and this one just triggered.
- Sell IAUS. I am overweight Oz equities by 0.5%, about 10% of the total weight, so I am taking profits.
- Sell JNK. Sell PFF. Similar logic to both of these. Deleveraging, reducing fixed income; these two are among my largest single holdings, so time to trim slightly.
- Bought PCLN. I have bumped against Priceline professionally, admittedly tangentially, and been an admirer. I almost bought six months ago, but decided the P/E was too high. Since then they’ve kept rising, but roughly in line with e.g. AMZN. Now the Economist has just profiled them. Which must mark the top… but it makes various good arguments and leads me to agree that Priceline is in the same league as Amazon, admittedly with a narrower moat. I like owning the clear industry leader and they are one. P/E no higher than normal. Buy.
- Bought CSCO. Topping up a very small holding, as part of a ‘pruning’ exercise – looking at my smaller positions and either topping up or closing out. CSCO divi yield is near its peak, and from what little I know of the business its prospects of remaining a global leader are good.
- Sell KMI. Selling out of this position as part of the ‘pruning’ exercise. There is a long story behind this stock but its divi progress has been poor even after a savage ‘reset’ so my sympathy for the stock has just expired.
- Sold JNK. I am nearing quarter end and wanting to continue my deleveraging. Updating my figures shows I’ve slipped from underweight US fixed income to overweight. So I’m selling some of one of my larger holdings, a junk bond ETF.
- Bought RTN. I am a bit underweight UK equities and have some spare cash in unleveraged accounts, so time to deploy it. RTN is one I am cautiously optimistic about – despite facing UK consumer headwinds I think it will recover to £4 and so at today’s £3.35 it is a speculative buy.
- Bought LLOY. As above I am underweight UK. Interest rates feel like they are about to start climbing, which will help UK retail banks. Lloyds has a strong CEO and enviable market position. Static share price for years. I’m calling it.
- Bought TGT. A limit order clicked, when TGT briefly dipped to $50 on the announcement of Amazon buying Whole Foods for $14bn. Target was back at $53 by the time I spotted, which was a 6% same-day return. It’s yielding about 4.6% and while I have long-term nervousness over its growth prospects I am OK holding this bellwether stock for now.
- Sold VTI. Looking to reduce exposure to US stocks, fractionally, and can’t see too many individual equities I want to reduce. So the index will have to do.
- Sold JPM, MMM. Taking profits, partially, as part of an effort to reduce US equities exposure a smidgeon.
- Bought BND, VUCP. Trying to get more US fixed income (which is my main underweight exposure right now, by over 1%); some in a GBP account.
- Bought AGNC. Tiny nibble on this high yield junk REIT, which is one of my smallest holdings (below my minimum holding, in fact).
- Sold NG. Small holding, held without enthusiasm, as a UK-only equity dividend play. Has risen 15% in a year and faces policy headwinds so in a tiny portfolio cleanup + ‘risk off’ move I am closing out the position.
- Sold VUKE. Small ‘risk off’ trade to reduce my UK equity holdings (with FTSE-100 above 7500!) in a leveraged account.
- Bought QCOM and TGT on dips. This is counter policy right now as if anything I want to reduce US exposure but the prices look tempting – albeit in TGT’s case the Amazon headwinds are significant. I will need to reduce US equities in other ways soon.
- Sold PSN. Taking (a few) profits at Persimmon as part of a wider reduce-UK-exposure play.
- Buy JNK, PFF. Am underweight US fixed income so am topping up my perennial fixed income favourites in a world of miserable yields.
- Buy TLS, Telstra. Am a bit underweight Oz right now and TLS is on a dip – I’m not quite sure why but broadly I have confidence in Telstra’s ability to preserve its monopoly privileges in the lucky country.
- Further selling of Australian ASX200 ETF. I remain overweight Oz and have been selling my UK-listed iShares ASX200 ETF. I have finally closed this position.
- Bought TLS, Telstra. This has dipped to recent lows. I see it as a long term safe utility with gently rising dividends so now feels like an OK time to top up. This is one step backwards on my ‘reduce Australian equities’ objective however.
- Bought VGB, Oz govt bonds. Most of my brokers can’t easily offer Australian bonds so I have been left underweight on them. However my Interactive Broker account can, and by reducing my London-listed equity exposure I can shift into bonds. I’ve taken the opportunity.
- Bought JNK, BND, AGG. I am underweight US bonds so am topping up.
- Sold IUSA. I am overweight US equities and really trying to make a determined effort to reduce my margin loan so this is place to go raiding. Unfortunately I am going to be paying capital gains tax on these realisations.
- Sold NXT. Next is one of my largest unrealised losses. It is in a sector (UK retail) which is down 20-30% since Brexit, so I don’t immediately sense a buying opportunity. I’ve made a significant disposal, as part of capital gains tax planning. If it stays around £40 I will buy back in after >30 days.
- Sold PSON. A month ago I thought Pearson was a buying opportunity (at £6/share). I now think it is a basket case, and it has risen to £6.60/share. I’m taking profits.
- Sold BGY. I am overweight International Equities and don’t have many positions I can easily sell. But I’m disillusioned with this high-fee monster so am closing out my position.
- Bought TGT. Target has taken a beating recently. I am torn between thinking its future is bleak vs Amazon, and thinking that with 45 years of dividend increases I see it as having the discipline to cope. I have made a mild topup.
- Sold Australian ASX200 ETFs. I am overweight Oz, and I am rotating out of unmarginable ETFs (e.g. LSE:SAUS) and into the local marginable equivalent (VAS) and SYD (a long-term holding which is underweight).
- Sold TP ICAP. My original thesis for owning ICAP was Michael Spencer’s influence and shareholding. The demerger has left me with two subscale holdings. Spencer has sold TP ICAP so I will too. I haven’t decided what to do with the remaining NEX Group holding at this point.
- Buy Premier Oil 5% 2020. My UK/Fixed Income is underweight, so I have been slowly buying. With bonds down 10% off their (stratospheric) peak it doesn’t feel too uncomfortable either. This Premier Oil note, PMO1, is my latest fixed income direct bond holding. I am slowly accumulating.
- Sold Schroder Asian Income Maximiser. A rebalancing sell. I don’t often do these, but my ‘International/fixed Income’ is significantly overweight; I have two big holdings here, both with my private bank, which are hard/impossible to sell. This leaves me selling about the only liquid investment I have in this allocation cell, which is this Schroders fund.
- Sold SAUS, bought EWA. I’ve just realised my Australian ETFs aren’t marginally, or at least the ones listed in London and Sydney. IShares’ EWA, in New York, is marginally but comes with USD risk. I’m ok with that and so am rotating out of SAUS and into EWA.
- Sold ETG, BGY. Taking stock, and looking for ways to reduce USA (and International, to a smaller extent) exposure, I have been drilling into BGY and ETG. These funds have both been a yield traps, with quite high fees. I’ve held both for long enough to see experience triumph over hope. In fairness to BGY it has delivered what I wanted: international equities, stable pricing, high yield – but I no longer want that. Hard to make a case for ETG, as its high ( taxable) yield comes at the opportunity cost of a lot of capital gains.
- Bought NXT. I have held Next since it was <£20, and seen it get above £70. But it’s not in good odour currently. This week it’s just fallen 20% to £40. It’s revenues are flat/falling and it makes no bones about the lack of growth. But long term it’s a terrific brand, highly cash generative, and decently exposed in a multichannel world (at least for a UK-only business). Its management has long experience and (Brexit support aside) shrewd shareholder-friendly leadership. I think upsides outweigh downsides at £40, and it’s the first single-digit P/E buying opportunity I can remember.
- Bought PSON. The quarter-end cash has started to accumulate. I need to reinvest. My rebalancing matrix says this means in UK equities. But where to look, when FTSE-100 is at an all time high? Eek. PSON fell on hard times a year ago, and been flat since. Its dividend has been relatively unaffected suggesting management thinks the shareprice woes are overdone; currently its yield is about 6%. Long term it owns some proper businesses and brands, with a lot of US exposure, and I reckon it will turn out alright. I’m not putting much in so haven’t done much more analysis than that.
- Bought AMGN. AMGN has just increased its dividend by 15%, making about the fifth year of such increases, yet its yield is at a since-IPO high. I haven’t dug into the patent expiry funnel but think it can’t be that bad if the Directors are increasing divis by 15% and I like buying divi-increasers at record high yields. However I am overweight USA so am looking for things to sell as a quid pro quo…
- … Sell ISA. I am overweight USA and the market is at record highs. I’m not trying to time the market, but want to ‘sterilise’ my purchase of AMGN – so am selling a roughly equal position in my biggest USA ETF.
- Bought RTN. The Restaurant Group is on my accumulate list right now and prices dropped 10% from the last buy. Since this buy prices have fallen a further 10%+. I think this one is a Buy right now.
- Bought NTEA. I’m underweight on UK fixed income (due partly to market falls but more due to my private banking nightmares – see forthcoming blog); Northern Electric’s bond yields about 5% and isn’t a banking bond, so I’ve added a tiny bit to my position.
- Bought LLPC. As per NTEA, I’m adding to my UK fixed income position. LLPC because I’m reinvesting the recent ~6% coupon from Lloyds’ bond.
- Sell BND. I sold a tiny bit of this US Bond ETF, due to worries (borne out in the next few weeks) that the US bond boom may be nearings its sned.
- Sold ISXF. Generally I’m trying to reduce my bond exposure a tiny bit; bonds have had too good a run for too long. This is not big enough a move to count as rebalancing, just a nibble around the edges.
- Sold HSBA. This was top 10 holding last year , largely due to me buying on dips / catching a falling knife. The more I thought about it and watched other European/Asian banks the less I liked this. With the price back above £6 I’ve been trying to ‘take profits’ (sell at less of a loss!).
- Bought BGY. I have been a bit low on International Equity; this holding feels like a solid, high yielding candidate, so I’m increasing my position.
- Buy TGT. With S&P at record levels it isn’t easy to find good value right now. But it looks to me like TGT is worth a nibble. It has increased dividends for 48 years, and in the last three years by an annual 16% p.a.. Yet its dividend yield is at an almost record high of 3.5%. It has had issues recently and Amazon’s tanks are on the far reaches of its side lawn; today’s news saw it fire its Chief Digital Officer for not achieving 40% online growth. I’m in.
- Sell CAT. A ‘dividend contender’ (having increased dividends for 22 years), I am not convinced the trends can continue in the near term. Divi yield is quite low. I see knock-offs of the brand in Asia. And China’s capital boom has bust. It feels like I should rotate from this into something with clearer medium term momentum.
- Buy DIS. Disney must be about as blue-chip a stock as there can be (notwithstanding its corporate governance shenanigans). And what enormous moats. For such a stock my only real question is what price to buy at. At $93 it is 22% below previous highs of $120. And its dividend yield, while unimpressive at 1.5% (payout ratio of 25%), is approaching historic peaks (except 2009 when it exceeded 2%). I’m buying.
- Buy PFE. I’m a tiny bit underweight US equities. But they are at record valuations so how to top up needs some thought. I’ve decided to top up my Pfizer holding. I’ve held Pfizer since early 2008, more out of a sense of blue chip duty than with any special knowledge about the company or its sector. It’s returned 10% per year and its dividends have doubled, without me reinvesting any of this dividend stream. The share price has risen significantly too but the yield is 3.5% which is quite high for an S&P stock. Belatedly I’ve invested 60% of my cumulative ever Pfizer dividends back into the stock.
- Sell ORCL. I was reading Amazon’s latest annual report recently and it strikes me its professional database offering Aurora is probably long term going to do for Oracle what its AWS service has been doing to IBM. I’m not close enough to know otherwise but why risk it. I’ve closed out my ORCL position.
- Buy MKC. A dip below $100 just triggered a limit order. I am not close to the business but as a leading FMCG provider of branded food/spices/etc this is long term investment.
- Buy RTN. A new CEO appointment at this multi-brand UK restaurant business has triggered me looking at this business. I’m pretty shocked by what I see. I have to think the new chap will do better and hope this isn’t yet all priced in. I’m buying below £4.
- Buy JNK. Give me the choice between Her Majesty’s finest, and Uncle Sam’s junk and, right now, I’d rather have Uncle Sam’s junk. At least while it fits with my rebalancing requirements.
- Buy WFC. I am underweight USA, and, given my rotation out of HSBC, my two ‘go to’ USA bank stocks (JPM and WFC) are worth looking at again. WFC’s dividend yield is approaching its top quartile ever levels so I am topping up at $49.
- Buy H50E. I’m underweight International Equities so looking to top up. Can’t really face any specific direct holdings at the moment but I quite like the HSBC ETF which tracks the top 50. I’m adding to my small holding.
- Sold HSBC. HSBC nudging £5.40. Delicious.
- Sold INXG. Index-linked Gilts have, not surprisingly, had a massive lift recently. However I consider my equities portfolio to be a pretty good inflation exposure, and UK gilts not as safe a bet as the market considers. And I’m overweight. So time to reduce.
- Sold IGLT. Partial sale at £13.80. I am overweight UK fixed income by 2.5% and can’t get my head around bond prices so it feels like a good opportunity to take profits.
- Sold SLXX, iShares Corporate Bond ETF. This just triggered a limit order at £150. Partial sale. I got into this in January at £130/share, what I thought was top of the market. It’s carried on rising after my sale and sits at £152. I can’t believe it. I remain long on this but will look to continue to reduce my exposure.
- Sold HSBC. I’ve been in this for a long time (since over £6.00). It’s been languishing around £4.40 for ages despite a divi yield of over 6pc. But recent rally of up above £5.00 feels like a good time to trim exposure; banking stocks make me nervous and HSBC has confirmed its divi isn’t really sustainable.
- Sold CRE, Creston research. I haven’t been following these guys for a while. But a UK-focused market research firm doesn’t feel like a good place to be post Brexit drop in confidence; research is an easy thing to pull the plug on. I’m closing out my entire position. I’ll recycle a bit of this into something US-based but in general this liquidation is part of a gradual reduction in exposure.
- Sold VUKE, Vanguard’s FTSE-100 tracker. FTSE up above 6700 feels great. This has helped push my UK equity allocation over 3% ahead of my target. I’m trimming my exposure slightly. My US equity is 1% underweight but that’s not enough for urgent remedial action.
- Slight reweighting of my target allocation. I don’t like reweighting, but with my net worth now 20% larger (in GBP terms, sigh) than six months ago, I feel my leverage is a bit high, and my bond exposure is also a bit high. I can afford to up my risk exposure a bit provided I continue to pay down debt. And I can’t face buying bonds at the latest prices [is this rational? Should my target allocation be stuck to? Time will tell]. So I’ve reduced my bond target from 45% to 40%, and also my leverage target from -45% to -40%. Equity target remains at 100%. This pushes my equity:fixed income split from 100:45 to 100:40 but reduces my gearing from 45/145 (31%) to 40/140 (28%), but now UK:US is reversed from 40%:35% to 35%:40%.
|Fixed income||1%||4%||20% (25%)||15%||40% (45%)|
|Cash||0%||0%||-25%||-15% (-20%)||-40% (-45%)|
|Total||5%||20%||35% (40%)||40% (35%)||100%|
- Sold ARM. With the Softbank acquisition pushing ARM up to £17 (up from £9 in January) I took some profits – I sold a third of my holding.
- Sold ADN. General Brexit-related uplift in Aberdeen allows me to crystallise slightly less of a loss. I’m taking it. I think Brexit can’t help, nor can general world downturn if it all goes t*ts up.
- Sold Next. An opportunistic limit order caught Next, post brexit, at £45. Now, three weeks later, it’s £51 – up 15%. I’ll take profits. My pre-Brexit holding remains intact.
- Sold SLXX. The core iShares corporate bond ETF in the UK has just pipped £140. Time to trim back a little. If the UK really is toast (not clear, currently) then corporate default rates could rise. Unlikely but I’d rather have the cash to recycle into housebuilders.
- Bought ETG. It is tempting to buy more UK bargains but even with the market ‘rout’ (ha!) my UK equity position is only a fraction underweight. In fact my most underweight position is International Equities. ETG, a global dividend income fund on NYSE (but with a 62% exposure to European Equities), is now, at $13.50, on an 11% discount to NAV and has dropped about 8% recently. It posts an 8% income yield and has been nicely predictable for years. I’m topping up.
- Bought BRK.B. Slight dip in this belwether stock to $138 creates a slight buying opportunity. I would get greedier below $130.
- Bought DIS. The pleasures and perils of Good-Til-Cancelled limit orders. I haven’t been watching this stock but had an opportunistic buy order in from some months ago. Interestingly this was the first post Brexit limit order to fill, at $95. Solid Buffett-style stock so while it isn’t a bargain I suspect as a long-term hold it will do fine.
- Bought 87PN, a Barclays 7% note. I’m noticing Barclays’ digital strengths recently and suspect their market position is more solid than their share price gives them credit for; right now I’m less sure about what to make of the Euro-zone-based Santander so will stick to UK notes. I certainly think a 6.5% running yield in my SIPP is not to be sniffed at so I’m topping up.
- Brexit! Possible bargains clicked via my limit orders – bought some NXT at around £47 and some PSN at around £15 (now £12.50!). These limits clicked at levels which are now some way higher than the market prices, so I have then topped up again. Buying falling knives isn’t comfortable but I consider both of these businesses to be broadly solid and hope their market falls are unwarranted.
- Nothing to report
- Bought some JNK. This is part of my continued efforts to rebalance towards USA and fixed income; conventional ETFs feel toppy and low yield, but JNK has quite a tight trading range and is yielding 6%. It has been hit by the preponderance of shale oil/gas producers in the high yield debt market but with oil prices on the up I am hoping the worst is behind us.
- Bought some banking debt. I’m trying to rebalance toward bonds but can’t really stomach the low yields. So I’m topping up on some old favourites: NWBD, LLPC, 87PN, ABB1 – which are generally yielding around 6% gross.
- Bought Persimmon (PSN). The builders continue to feel like good bets, while the government is throwing cash at the housing market, and while the pound is in freefall. I don’t know much about the individual builders but a friend rates Persimmon so I will start there and use a small holding to increase my attention level.
- My diary was suspended as I went through a major rebalancing exercise related to my buying my Dream Home. This rebalancing involved a multitude of trades but in quite a mechanical way – so the diary wouldn’t contain any useful signals. This process was almost complete by 1 April.
- As of 15/12/15. This diary is temporarily suspended, while The Dream Home is purchased. This is involving a *lot* of Sell Orders, which are too numerous to list here. Most are picked by tax considerations (i.e. I am closing out unrealised gains) and many of the remainder are clumsy position transfers as I move funds from unmarginable accounts into marginable accounts so listing them here would be pointless.
- Bought PSON (Pearson). I have Pearson as a long-term hold – I see it as a global leader in a growing space (education), with a significant moat. However right now it has real challenges, and its share price has halved in the last few months. In the short term, there is plenty more falling-knife downside risk – of a dividend cut, top management chaos, M&A distractions, etc. For the long term, I think now is a good time to fill my boots. I’m doing so.
- Bought XOM (Exxon Mobil). Exxon has, like the other oil/commodity majors, taken a hefty hit. But it’s the bluest chip in the sector, has raised dividends every year since before I was born, and if any company can whether the energy price dramas it is Exxon. My view on long term energy prices is pretty similar to Monevator’s view, i.e. they will go up, not down, from here. Provided they get to $70 at some point, this investment should come good.
- Bought HSBA (HSBC Ords). HSBC is one of more core holdings – I see it as a solid, global franchise that will provide above-inflation growth for a lifetime and has less of the flashy-braces-risk-of-blowing-up that comes with some other ‘too big to fail’ banks. However, its share price performance has been pretty dismal for a sustained period, which either means I’m wrong or it’s a bargain. Right now it’s dividend yield is a worryingly high 7%, and so far as I can see management has every intention and confidence of sustaining it. I’m topping up in my tax-free account.
- Sold BWNG (N Brown Group). I have held this for a while (hoping it was a cut-price Asos with some shops), but become disillusioned with it (as it has serially underperformed). But with its share price in the doldrums I didn’t want to sell. It has recently spiked almost 20% (despite it just revealing its online business is growing by about 1% pa which means it is losing share) – this gives me an opportunity to close the position.
- Bought BRK.B. Berkshire Hathaway. The name alone gives me quivvers. Yet I’ve never steeled myself to buy it, always thinking that its best days were behind it. But hey, the market is down 10%, and Berkshire is a conglomerate of solid American-focused businesses, and the Great Man has next to nothing to do with their daily operations, right?, so isn’t this just a type of unit trust that reinvests its dividends? Let’s give it a go.
- Bought VBR. USA, small-stock, Vanguard. Another way to increase exposure to the USA. Along with the BRK acquisition, this balances my USA equity investments slightly into smaller cap stocks.
- Bought RDSB. Shell. >6% yield. And its CEO has just made some very public statements about the importance the whole company, and notably its board, places on maintaining the dividend. A buy signal, I hope.
- Sold BMW. Sold DAI. Buy MMM, DE, PG. Oops – selling a stock two weeks after buying it is not textbook. But upon the VW cheating-at-emissions-test scandal emerging, I took the view what VW does BMW and Daimler probably do too. Certainly there will be a discount over the sector until they are proved innocent, or worse. I managed to Sell BMW and DAI before the herd (they duly dropped 6% that day; I got out at par, roughly) and think I dodged a bullet here. I am recycling into GE, MMM, PG – roughly speaking from German manufacturing/brands into USA manufacturing/brands.
- Bought BMW. Buying Euro stocks is not currently consistent with my (under)allocation, but seeing BMW at >3.5% yield in the current conditions is too tempting to resist. One of the world’s great brands with, despite China’s current turmoil, excellent prospects as the global middle class expands over the next 20 years.
- Bought MMM. Can’t believe that MMM is now >10% cheaper than when I opened my position less than two months ago. Yum. Lots of other blue chip, Dividend Champion stocks at >3% yield which is highly unusual for the USA. Fish in a barrel right now, right?
- Bought AXP. Small purchase as part of my ‘increase exposure to USA equities’ moves right now; I still consider AXP (American Express) a relatively better deal than the market as a whole.
- Sold some IUKD. Actually a pretty significant rotation out of IUKD (for reasons set out earlier), and DWX (international dividends) and DVY (US dividends) all for similar reasons – I no longer think an ETF is the right way of getting high yield equities exposure. Between them I am selling a six figure position – one of my biggest moves in a while. I’m taking the opportunity to rebalance towards USA and Australia. So far as I read it IUKD has outperformed FTSE-100, but is basically a blend of FTSE-100 and FTSE-250. So by (partially) swapping out of IUKD into VMID (or MIDD) I am essentially swapping from high yield (and high turnover) FTSE-350 into FTSE-250. I’m also buying IAF (Australian bonds), VTI (US Equities), IOZ (Australian equities), JNK (US bonds), PFF (US Preferred shares), XOM (Exxon: US Equities), and MMM (3M: US Equities). Before these trades my UK Equities position was almost +6% overweight so I need to take more drastic action than just reinvesting dividends (especially when I don’t want to use UK tax-free accounts’ dividends to buy USA securities).
- Bought some VUSA, Vanguard’s S&P 500 on the London stock exchange. Broadly I think S&P is overvalued but my US exposure is underweight and I haven’t got any VUSA in that particular brokerage account so I bought a small amount.
- Bought QCOM, Qualcomm. My opening position. Qualcomm is an unusual stock – one I have historically been cynical about – in that it is a) US Tech b) heavy on IP c) currently quite high yield. I like most of the above, but they don’t usually show up in one place. I am not the only one – e.g. see here.
- Bought VUKE. On a limit order. This is not textbook because my UK exposure is overweight; however I have some limit orders set for buying VUKE on dips and one of them just triggered. Sure enough as of the time of writing two days later I am in the money, as VUKE is rebounding.
- Bought some MMM, in a US tax-exposed account where the cash balance has just exceeded my trigger to reinvest. MMM because I am underweight in the USA, but not overly keen on the market index right now, and MMM is a dividend megachampion (dividends raised for 57 years on the trot) in which I am barely exposed, yet yielding around 3% (quite high for the USA).
- Taken advantage of Grexit-driven market dip to swap some IUKD for CTY. Have decided to swap out of IUKD completely over next few weeks, in light of Greybeard’s article and accumulated concerns over 5 years. Ideal replacement would be Vanguard UK Equity Income ETF but their fund isn’t an ETF yet.
- Small BLT purchase as a longstanding limit order has triggered.
- Bought more of JNK (SPDR Barclays High Yield Bond ETF). One of my (taxable) broker accounts has recently accumulated enough cash to trigger a reinvestment. I am underweight on USA Equities and Fixed Income (about 2.5% below target on both; this is proportionately worse on Fixed Income due to my lower target allocation on that). US Equities sound quite highly valued, whereas JNK is close to 3 year lows.
- Small topup of BHP Billiton (BLT) in tax-free account. BHP is <£13.50 and I have been buying at <£14. Decent divi yield; UK listed so good for tax-free account; increases my underweight Australian exposure (thanks to me subjectively assigning BHP to Australia!).
- Switched from an AUD$ currency fund into ASX:IAF, an iShares Corporate Bond ETF that I didn’t know existed until very recently. Why? My target allocation for AUD Fixed Income has always been artificially low / missed because I found investing in them so difficult; I have now found an ETF tradeable on one of my brokers with AUD funds in it. And with cash rates having halved to about 2%, but bond yields still holding up above 4%, this is a yield optimisation play within AUD. Is the additional risk acceptable? Based on my USD experiences, I perceive so. Time will tell.
- Bought AXP (American Express). Why? Having increased my target USD allocation a couple of months ago, I am slowly rebalancing into it. The S&P feels a bit toppy (based on CAPE, market sentiment, and suchlike) so instead I’ve gone for one of my core watchlist stocks that is about 20% below peak. Slight misgivings about AXP, based on how I myself am using it less than I used to (and its short term numbers will be a bit complex due to it losing its biggest account, Costco), but overall I think it is a premium global brand – and those I like.