Mid Year Review +11%

As its the middle of the year I thought I would run through the portfolio as it stands now and performance at the half year point.

I am currently up 10% for the year. This is disappointing especially as I was 17% up at the end of April. It is all due to Man group falling back (despite me selling some at near the highs and a bit lower still). I also potentially mishandled RHM – I held as it rose from my entry to 12p very quickly then watched as it dropped right back down again. Holdings in Fondul Proprietatea, National Grid and SIHL have done badly – FP due to the greek crisis and falls in natural gas prices.

If you compare to the FTSE this is mediocre – FTSE TR up about 7% since the start of the year but it matches Neil Woodford’s performance. This is quite depressing as it means for all the effort I put in I could have just bought him then forgotten about it!

This includes profit from the odd cheeky trade like buying Woodford Patient Capital on IPO then selling a few days later for 5% as it rose to its inevitable premium…

I also have a Euro GBP short on to hedge my FP. exposure as the Romanian Leu is pegged to the EUR. Wish I had gone bigger on this – having said that FX speculation is generally a suckers game…

I believe the SIHL fall is probably due to a big seller and a lack of liquidity so I will top up.

Portfolio with weights is below:
FFY 21.3%
WCW 15.7%
FP. 13.5%
SIHL 10.1%
NG. 8.2%
RHM 8.2%
EMG 8.0%
TCF 5.1%
SCS 4.6%
RUG 3.4% (Delisted ex cash paid)
ACHL 2.6%
POL 1.5%
TJI 1.1%
AO. -3.2%

Few comments.
I wish I had kept my AO. Short on at a decent size when I first put it on I had conviction but let the price move shake me – I want to get better at shorting.

My top 8 holdings are 85% of my portfolio. Is anything really added by the rest ? I would argue yes as TJI has the possibility of doing very well at some point. As the price has halved since I posted (on no volume, for no reason) I may well add a bit more.

I might also add to NG. – think this is a safe, bond like stock and in current conditions likely to be a rotation to safety stocks like this…

In addition RHM could do very well, again a potentially year making share – possibly I have put a bit too much in given the risk.

I am completely unlevered – I currently have a 4% cash position. I would like a few more shorts to balance the longs but am not a natural shorter and haven’t done it for many years.

FFY- I bought most of the current holding at 0.94 per share – though I have some I bought at 0.32 eur per share – its now 139 – a 48% gain on a big position. I am a little uncomfortable with its size – 21% is big for any holding. Despite this I will hold through my discomfort as I believe the stock is cheap.

WCW – released results. Profit was rubbish, cashflow good, balance sheet strong. I will give it a year or two – I think value will out but troubles in markets may undermine my thesis it could be smart to cut a bit if crisis continues and price holds up…

SCS lightened up on this one – still believe my argument but will exit if any information comes out to suggest ongoing sales weekness – I dont expect more falls as I think negativity is in the price.

I am not optimistic about achieving my 40% profit target for the year. I think most likely outcome is another 20%er. This isnt good – if I keep on achieving this sort of growth I become rich – but not quickly enough. I really need 40% a year… Might be time to change tack – will give it a year or so to see how current method pans out… I am aware if I push it too hard I can go the other way – something to be avoided!


4 thoughts on “Mid Year Review +11%”

    1. I disagree completely with this comment – the article is basically saying as most investors fail to outperform I am likely to be like most investors so am therefore likely to underperform.

      Institutional investors are severely constrained by regulation and for want of a better word custom. Many dont believe they can outperform – or really want to take the risk – index based investors / closet trackers and so they dont. Many Grandma type investors simply want a place to keep their money safe. In addition those that can outperform and are trying are constrained by career risk – limiting their potential.

      Guys like me who are swinging for it are few and far between. Many like me overleverage / overconcentrate then eventually blow up. I am not like most investors out there, I am not investing how they are investing and so will not achieve returns like theirs – for good or for bad!

  1. Fair enough.

    Don’t you just hate those people who just leave a smart alec link and then disappear:-)

    I think you are doing a good job with this blog. Following your post I went through the holdings of BTEM, surprised to find how many I already held in my undervalued asset portfolio. I have also been in and out of IERP (before you) and would have bought Tinci had I received your update when posted.

    I used to be a ‘guy like you – swinging for it’, but since I have been living off of my investment results I have had great trouble reconciling stock selection vs risk management. I tend to get both big winners and big losers. Obviously I want to keep the former and lose the latter.

    I would just say that having a performance target increases the emotional pressure that you place yourself under without having any effect on the outcome.

    BTW, what is your definition of this ‘rich’ that you want to become?


  2. My definition of rich is about half a million to a million in liquid assets. Then a 20% return makes 200k which is more than enough for me to live on – I only spend maybe 10k a year…

    I agree putting a target on things increases the pressure – however I need goals it is far too easy for me to cruise so I do it to push myself so I work harder – which will affect the result !

    Thanks for the comment…

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