UK Stockmarket 2009 and beyond

gadgetmind

lvader wrote: »

It was like the good old days for commodity shares today, yeah baby!

I've been adding to EM and resources for the last few months and am now about 1.5x over-weight in both. I'm confident this strategy will come good but have no idea regards timescale!

Thrugelmir

29.5% gain on Jarvis Securities over past 2 months. :beer:

bowlhead99

This week I added some VOG (Victoria Oil & Gas). Only mentioned once in this thread by someone 4 years ago (price then 3.5p+, today 1.25p and quite a different business). A gas producer in Cameroon not for widows or orphans; depending how the next year goes they will either be diluted all to hell and worthless, or worth a multiple of today's price. They are in my SIPP (at a loss) but I added £500 worth into my ISA just for fun. Probably should not have wasted the ISA allowance on something speculative really as there is no divi in sight, but I like a punt every so often.

I also added to Asian Citrus Holdings (ACHL) following their formal profit warning which had already been obvious from previous crop updates - it's an AIM and HK listed orange plantation and fruit juicer in China. I've had this as a long term hold in an ISA as it pays divis; its share price is pretty much where it was 4 years ago but had got up to 3-4 times higher in the intervening period. I have been buying in dribs and drabs as it's fallen from 35pish to current 20pish over the last year over a poor growing season, and in doing so it has become a much bigger portion of my ISA than any single AIM Chinese agriculture share has any right to be.

However, I've decided I will continue to add on occasion over the next year if it gets any cheaper (e.g. after formal results next month) unless/until I see something that really scares me off. Rather than rebalancing the portfolio away from it, as something of a gambler I've decided to keep the over-exposure and simply say the value of my next car in around 3 years time will be directly proportional to how this share performs. If it does well, great; if it does not, it will be an extreme lesson to me in why not to belligerently stick to an investment thesis that's perhaps already run its course.

Glen_Clark

gadgetmind wrote: »

I've been adding to EM and resources for the last few months and am now about 1.5x over-weight in both. I'm confident this strategy will come good but have no idea regards timescale!

What do you think of as resources? From Wikipedia A resource is a source or supply from which benefit is produced. Typically resources are materials, money, services, staff, or other assets that are transformed to produce benefit and in the process may be consumed or made unavailable.

Glen_Clark

bowlhead99 wrote: »

This week I added some VOG (Victoria Oil & Gas). Only mentioned once in this thread by someone 4 years ago (price then 3.5p+, today 1.25p and quite a different business). A gas producer in Cameroon not for widows or orphans; depending how the next year goes they will either be diluted all to hell and worthless, or worth a multiple of today's price. They are in my SIPP (at a loss) but I added £500 worth into my ISA just for fun. Probably should not have wasted the ISA allowance on something speculative really as there is no divi in sight, but I like a punt every so often.

I also added to Asian Citrus Holdings (ACHL) following their formal profit warning which had already been obvious from previous crop updates - it's an AIM and HK listed orange plantation and fruit juicer in China. I've had this as a long term hold in an ISA as it pays divis; its share price is pretty much where it was 4 years ago but had got up to 3-4 times higher in the intervening period. I have been buying in dribs and drabs as it's fallen from 35pish to current 20pish over the last year over a poor growing season, and in doing so it has become a much bigger portion of my ISA than any single AIM Chinese agriculture share has any right to be.

However, I've decided I will continue to add on occasion over the next year if it gets any cheaper (e.g. after formal results next month) unless/until I see something that really scares me off. Rather than rebalancing the portfolio away from it, as something of a gambler I've decided to keep the over-exposure and simply say the value of my next car in around 3 years time will be directly proportional to how this share performs. If it does well, great; if it does not, it will be an extreme lesson to me in why not to belligerently stick to an investment thesis that's perhaps already run its course.

The specialists will have expert staff on the plantations so will have a better idea of next years crop than us. So I can see the logic in having it as a long term hold, - in an ISA. Hope it works

gadgetmind

Glen_Clark wrote: »

What do you think of as resources?

As my recent resource investing has been via First State Global Resources, I guess we use their definition.

"The Fund invests in shares of companies around the world that are involved in natural resources and the energy industries."

http://www.trustnet.com/Factsheets/Factsheet.aspx?fundCode=QIF37&univ=U

Glen_Clark

gadgetmind wrote: »

As my recent resource investing has been via First State Global Resources, I guess we use their definition.

"The Fund invests in shares of companies around the world that are involved in natural resources and the energy industries."

http://www.trustnet.com/Factsheets/Factsheet.aspx?fundCode=QIF37&univ=U

Thanks for the link. I am sure you know what you are doing, So I am a bit surprised because I thought you preferred closed ended funds at a discount. Otherwise I don't know why you pay hefty charges to invest in BHP Billiton / Rio / Glencore etc when you can easily invest directly and cut out the middleman.

bowlhead99

Glen_Clark wrote: »

Thanks for the link. I am sure you know what you are doing, So I am a bit surprised because I thought you preferred closed ended funds at a discount. Otherwise I don't know why you pay hefty charges to invest in BHP Billiton / Rio / Glencore etc when you can easily invest directly and cut out the middleman.

People pay management fees (~0.9% in this case, plus a bit of platform fee here or there) for someone to do work they don't want to do themselves.

In this case (at a quick glance without thinking about it too hard) 3/4 of the portfolio are listed as non-UK which makes transaction costs higher and research time longer. Of course, Vale would be classified as Brazil but you don't actually have to go to Brazil to buy it, which is why I say this is a general comment without thinking about it too hard

But there is a general point that while one can get broad exposure to the sector by buying the individual shares of a few global giants directly, that exposes you to more company-specific issues, and resource-specific issues, rather more than if you hold 40 of them. Potashcorp for example, $25bn company was ~25% more valuable on 31 July than 7 August. Presuming you already have a wide portfolio and want to tilt some of it towards resources generally, you might not necessarily have £100k to split into £2k,£2.5k chunks to get the round-trip buy-sell broker transaction costs (ex stamp duty) down to 1%.

So, management fees may be considered as something that you spend to access the efficiencies of having the fund do the bulk buying in multiple markets for you and others, and also that you spend to have them doing the thinking of which particular stocks to hold in which proportions based on which news and forecasts.

On the preference for closed ended fund (ideally, discounted to NAV) vs other types of funds:

Of course we would all like to buy things at a discount, where available, but some of the specific advantages of fixed size closed ended investment trusts that have been touched on in other threads are less relevant here, as a fund like this (£500m total investing across £100bn+ market cap companies) does not face the same problems deploying capital into its targets as for example a £1bn smallcap

bowlhead99

nor does it face issues trying to get its cash back out to meet redemptions as for example a real estate or private equity fund would have.

In this sector I do have an investment trust in my SIPP on a healthy discount - City Natural Resources High Yield Trust, to which I added not long ago - but the type of companies held are quite different from a larger 'traditional' fund in the sector that I also hold which would have the Rios of this world etc.

sabretoothtigger

1.5% is not that hefty and I presume they offer some research and good sense as well. Also many USA companies in there which arent as convenient


I was thinking of taking a commodities ETF as its so low this year it might be ok to hold. I owned one in 2009 and its still up from then despite being a futures reliant vehicle
Any suggestions for valid EPIC, my old got turned into $$ quoted

I've decided to keep the over-exposure and simply say the value of my next car in around 3 years time will be directly proportional to how this share performs.

No pain no gain fair enough. I wonder why you'd bend over backwards for lemons though, it does sound like normal variance if its just a single crop type thats to be expected ?
China has great reliance on agriculture as they mostly lack an easy source like USA has so I opted for fertilizer rather then thinking about any one crop. however this has not done so well either.

SXX fell recently, I think thats become cheap if they do get clearance one day. POT is another Ive watched years, otherwise I would just take back my agri fund if market does fall I reckon its a good safe bet for what the world needs more of 5 years from now