Portfolio Vital StatisticsAug 19, 2017 · 3 Hour Investor Newsletter incorporating the “Newsletter Portfolio” Year 2. Week 11-2017-Aug-19 Portfolio Vital Statistics Commenced

3 Hour Investor Newsletter incorporating the “Newsletter Portfolio” Year 2. Week 11-2017-Aug-19

Portfolio Vital Statistics

Commenced on 10 June 2016 with $250,000.

Now worth $285,301

First stocks purchased in week of 7/7/2016

Total Portfolio performance since inception 10.64% pa

Performance on funds invested in securities since

inception 18.67%


Current Portfolio Valuation.

Portfolio Valuation 2017/Aug/12 is $285,301 According to Lincoln the portfolio is increasing at a

rate of 10.64% per annum. Since inception, securities have returned about 19% per annum vs XJOAI

at 11.35%) and also compares to “star stocks” which returned (-2.02%) (all as measured by Lincoln).


Comment. We currently have 6 securities and about $125k in cash (about 44% cash )

Losers >10% -

Losers 5.1%-10% -

Losers 0%-5% 1

Gainers 0%-5% 1

Gainers 5.1%-10% 3

Gainers10.1% - 20% 1

Gainers 20%-30% -

Gainers 30%-40% -

Gainers >50% -

Portfolio comment.

4/6 stocks closed green for the week.

All stocks are still in hold territory…although IHVV looks close to being a sell

We lost about 0.77% for the week…vs XJOAI gain of 1.26%...

It’s worth noting that the portfolio is now sitting at about 44% 1/3 in cash….We’re assuming

that the cash gets no interest…not good…might have to do something about that next week

Our best stock at the moment is A2M which is up about 12.5% in just 2 weeks (this seems a

risky stock to me…although it’s on a PEG of only 0.12 trailing and only 0.29 prospective…so

perhaps it’s reasonably priced (if you squint hard). A minor mis step in the reporting season

could see it drop back sharply maybe?...or will it be the next blackmores?

3 Hour Investor Newsletter incorporating the “Newsletter Portfolio” Year 2. Week 11-2017-Aug-19 Status of US Markets.

Dow. Closed RED for the week Down 0.35% Friday Futures RED (Saturday) Short term moving average still above long term moving average Volume looks healthy

S&P 500 was RED for the week Down 0.18% Friday FUTURES RED Saturday… Short Term Moving average well above long term. Volume trending down

Nasdaq. RED for Week Down 0.09% Friday Futures RED Saturday. Short term moving average still well above longer term moving average

Russell 2000 RED for week, Down 1.15% Friday Futures RED Saturday Bearish signal…price has dipped below 30 day line, 2 weeks in a row

Vix…closed GREEN for the week a RED signal for us … still sitting highest level for this calendar year

3 Hour Investor Newsletter incorporating the “Newsletter Portfolio” Year 2. Week 11-2017-Aug-19 Status of Australian Markets

XAOAI All Ordinaries Index. Green and above the line. No Gap in MMA, ROAR (6mth) approx Zero

XMD Midcap 50 Green and above the line Positive Gap in the MMA….small ROAR(6mth)…zero

XSOAI Small Ords Green…above the buy line MMA shut… ROAR (6mth) trending up above Zero (4%)…

XVI Volatility Index RED (a GREEN signal for us) Looked at over a longer period XVI is trending up at a rate of 25%pa…it’s still a warning sign

USA is giving us clear RED signals. Australia is giving us GREEN Signals. Of special interest is the big

fall in the Russell 2000 small companies index in the USA…it’s said that the “smart money” invests in

this space so when this index falls it can be an early indicator that the other markets will fall. What

do you think?

3 Hour Investor Newsletter incorporating the “Newsletter Portfolio” Year 2. Week 11-2017-Aug-19 Newsletter Portfolio will wait to see that USA stocks and futures are trending up on Tuesday before

we’d think of buying. This is a challenging set of figures to interpret…I’d prefer to be on the safe side

ASX Indices with ROAR above 20%

New section for this report. Here are the ASX indices which closed the week with ROAR (6 months

rather than annual) above 20%. (purpose of this section….if an index is going up…perhaps consider

looking at it’s component stocks to check for anything worth buying). (if it closed green for the week

I’ll mention it)

XVI ASX 200 Volatility Index (RED)….now at 37% (6 mth…ouch)

Special Mention

XEC Emerging companies crossed up at 1200 and now at 1257 (6mth ROAR 10%) Green.

XJR (resources) is trending up……10% (6mths)

XMJ ASX200 materials trending up 10% (6 months)

XMM ASX300 metals and mining growing at about 16% on 6 mth ROAR


VALUE index update

Let’s call the value index. How it works: Filter stocks with the following criteria

1. Financial health = strong or satisfactory

2. Dividend yield >2.5%

3. PE <15

4. Price to NTA per share above zero and under 5

5. Enterprise value above $500m

6. Excludes mining stocks and most financials (as advised by Alan Hull)

We search for (a) sharp increase or (b) decrease in stocks found by this filter.

If there are many stocks here then “buying value stocks might be a good strategy”….

If there are few perhaps it indicates we’re at the top of the market?

One stock featured on the list is Michael Hill Jewellers looks to be paying a gross dividend yield of

about 5.5% with “Strong” status and consensus expects a high annual profit growth to be announced

soon and PE of about 13 and a discount of about 19% to Consensus…perhaps worth a look

0

2

4

6

8

10

12

14

16

18

Search for Value count


Comments on Star and Borderline Stocks.

Stocks in Sell Territory. If I had these stocks I should have sold out.

Stocks that closed Green for week AND are rising at above or close to 20% per annum (based on ROAR) AND are ‘above the line’. In other words worth assessment for possible rating as a buy.

Star Stocks COH, NAN PEA, PME, TNE

Star Stocks APX, MNF, IRI, NHF, RCG, RRL, SAR

Borderline Stocks CSL, DMP

Borderline Stocks CGF,

7 Reds and 8 Greens.

Stocks with interesting charts

ALL crossed back into buy zone and green for week.

COH up from 140 to 157 (approx figures) in one week

MNF up from a low of 4.20 (7 July) to about 5.40 current. Nice.

DMP Massive fall from grace

RHC (6 month ROAR on 12%)

Reporting season’s Volatility is with us…some big movements in the last week or so


Selling Report. Sold CGF 16/8 2,[email protected] fees $19.95

Sold CPU 17/8 1,700 $13.79 fees 19.95

In both cases I had these stocks in my real account and sold as per above. Looking at the charts

today it looks like both are slightly above the sell line (Chandelier stop loss)…it’s possible I sold a

little early…however we’re taking small amounts and I was spooked. I might live to regret this

decision…and yet I feel safe having the money in the bank

Buying Report. SGM** Monday 14/8 1,750 @13.79 fees 19.95. Now this stock had fallen quite a bit on the news

that the CEO was being changed and then the next day started to turn back up…so I bought

thinking it might drift back to where it was before falling 15% or so. After a see saw week I’m

slightly ahead (about 2.9%)


Stocks worth assessing as suitable for

purchase if conditions are right this week The following stocks are on our “potential buy” list…

Warning. Requires further careful analysis

A2M**

ALQ**

APX**

AWC

CAR**

CGC**

CTD**

CIM

GUD

GWA

HVN

IAA**

IAG

IEM**

IRI

MNF

RCG**

SAR

SGM** (There was a weird stock price drop following recent news of a change of CEO…since then

the stock has been going up…can it get back to it’s recent high?)


Bonus Charts:

In this section I’ll sometimes list a chart that catches my eye and provide a brief comment.

If you want a stock reviewed, perhaps email me and I might include it (no promises)

Chart Comment

Physical Copper Over the last few years Copper has dived from about 9750 high to a low of about 4500, however from Mid 2016 to current it seems to have run up quite a bit. Why?

Physical Zinc has had a massive run up from a low towards the end of 2016 to current. Why?0

The New Zealand Small Companies index is powering ahead. Perhaps worth a look for opportunities across the ditch.

3 Hour Investor Newsletter incorporating the “Newsletter Portfolio” Year 2. Week 11-2017-Aug-19 Parting comment

Here’s a chart of the iron ore spot price back to 1980. You can clearly see the point where the price

started to trend up exponentially and then soon after crashed back to about where it started to

trend up rapidly. An example of a bubble and crash

Inflation adjusted oil price chart.. We can see again 2 bubbles and crashes back to where prices

started to increase exponentially

Do we have a bubble in house prices in Melbourne and Sydney.


Signs that the bubble in housing is about to pop Warning I’ve not really researched this stuff other

than read about it in newspapers and online (so it’s probably not reliable…do your own research

please) .

Prices in Perth and Qld and NT have already started to decline. NSW and Vic were lifted up

by a large presence of overseas Chinese buyers (who are now probably withdrawing see

below).

Interest rates have increased. Not official rates…just those charged by banks. Especially for

investors, those with low deposits, interest only loans and so on.

Pressure is put on those with interest only loans to convert to principle and interest.

Investor depreciation is effectively terminated for 2nd hand properties. (Still available for

new properties)

Vacant property tax for overseas investors.

Increased stamp duties for overseas buyers.

Increased scrutiny and compliance against overseas buyers.

China puts brakes on ability to get capital out of china (for Australian property investments)

Reduced LVR restrictions and Reduced valuations by Australian Banks

Reduced ability for overseas investors to access Australian Bank loans.

Resulting elimination of up to 25% of volume for Syd and Melbourne perhaps?

Note. I’m relying purely on what’s in the newspapers and on discussions with friends in the

business. I’ve not done further research so I’d be suspicious about the accuracy of this.

Australian Banks…are allowed to lend out about 10x what’s deposited with them based. Average

LVR is reasonably low so they feel safe. However a decent downgrade of property prices will see

substantial loss of equity. If you’re holding big licks of bank stocks…perhaps at least think about

these points.


What does it all mean?

BE READY for a big shift in the market.

IT MAY go up (if so…buy and ride the upwave) and then turn down…if so it will be fast and

we’ll be selling quickly

Others turn up and then keep going

People are predicting all sorts of movements…rarely do the predictions come true as

planned.

Fundamentals rarely seem to shine through in the medium turn according to plan

What will the newsletter portfolio do.

We’ll try to find stocks with strong fundamentals.

We’ll try to time the market…only investing if the markets look to be trending up

Only then will we also try to pick stocks that we think are trending upwards and risk out

capital in buying those.

We’ll let winners run for as long as the crowd is supporting them

We’ll quickly sell any stocks where our system thinks there’s a downward trend and cut our

losses to live another day.

If we think the market is trending down…the above steps won’t work…we’ll then turn to

Bear style ETFs and be extra vigilant with such

In a down sideways down market we’ll look for deep value high dividend safe-ish stocks.

Note that the newsletter portfolio is sitting on about 1/3rd cash right now…that shows you

where we think we are and how much risk there is in the market.

What’s your plan?

Comparison of portfolio returns

Newsletter portfolio . Since inception 10/6/16 10.64%pa

Buffett’s Widow passive portfolio. Since inception 1/7/16 9.35%pa

Star Stocks Portfolio: Since inception 17/11/2016. 1.18% pa (finally positive)

Warning. This newsletter is provided for your entertainment only, I’m not a financial adviser, I have not taken account of your objectives, financial situation or needs. You should therefore consider the appropriateness of any descriptions of my Newsletter and its newsletter portfolio in light of your objectives, financial situation and needs, before taking any actions.

All views and information expressed in this newsletter are not the views of Lincoln and or its directors, agents, representatives and employees.

Many of the graphs and screen shots are taken from Lincoln services and are fully credited to them. I’m a paid up licensee to Lincoln, otherwise all IP in their system and graphs belongs totally to them. I recommend that you consider signing up to their service…it’s a great service and I feel great value for money!

I do invest and trade in shares, I’ll usually mark the ones that I own with (**)…however it’s safe for you to imagine that I’m either buying or selling just about any stock in the market, particularly and especially if mentioned here.

Documents

Portfolio Vital StatisticsAug 19, 2017 · 3 Hour Investor Newsletter incorporating the “Newsletter Portfolio” Year 2. Week 11-2017-Aug-19 Portfolio Vital Statistics Commenced