Equities Strategy

ValiantSon

inflationbuster wrote: »

Honestly no one can teach you how to pick and choose equities on a bulletin board. I learnt it all the hard way when l started investing late 2008 during one of the worst recessions in our lifetime.

I was perhaps very lucky to miss allot of the carnage of companies going bust and put most of my offset mortgage into a plethora of FTSE 100 and FTSE 250 stocks that l felt would survive the recession. l used Wikipedia (the full list of company members are there) and FT stock filter to help me build a portfolio.

It was a baptism of fire l can tell you that!

I made plenty of mistakes along the way with one company going bust and numerous companies raising cash via rights issues and open offers. But l learnt a heck of allot as well it was probably for me the best time to learn the markets and made my best returns to date during 2009.

To this date l still find it fun hunting out companies from the two main markets. But it's handwork researching. Think of it as another hobby as it will consume your time.

Check out the Naked Trader book on investing if you're serious.

If you're only after safe and paltry returns invest in a fund.

Looks like you still have a lot to learn if you think that returns on investments in funds are necessarily paltry.

Alexland

...but they are mostly safer so generally a better risk adjusted return.

Thrugelmir

Voyager2002 wrote: »

I wonder how many of us could have distinguished between BP and RBS.

I'll repeat what I posted earlier.

Don't expect to find value amongst larger companies. You'll be getting the news long after others have. Nor will you will access to the detailed research that gets published.

You may overlooked the fact that BP suffered from the Deepwater Horizon disaster. Resulting in the Company suspending dividends for 3 quarters. Likewise the disaster has cost the Company $65 billion and resulted in asset sales to fund this.

Buying any shares carries a risk. That's the bottom line.

Do you remember Hanson Trust, Trafalgar House, BTR, Hawker Siddley..............

Thrugelmir

ChesterDog wrote: »

I manage about 20% a year, almost entirely from funds.

Over what period of time?

Voyager2002

Thrugelmir wrote: »

I'll repeat what I posted earlier.



You may overlooked the fact that BP suffered from the Deepwater Horizon disaster. Resulting in the Company suspending dividends for 3 quarters. Likewise the disaster has cost the Company $65 billion and resulted in asset sales to fund this.

Buying any shares carries a risk. That's the bottom line.

Do you remember Hanson Trust, Trafalgar House, BTR, Hawker Siddley..............

That was the point. Anyone who bought BP right after the Deepwater Horizon disaster, when its share price was right down and its survival seemed doubtful, eventually did rather well. Whereas anyone who bought RBS when the shares suddenly looked like good value lived to regret the choice. Who among us could have distinguished between the two situations?

inflationbuster

ValiantSon wrote: »

Looks like you still have a lot to learn if you think that returns on investments in funds are necessarily paltry.

If i'd of invested in some of the UK's top fund managers i.e., Neil Woodford (whom is well 'advertised' in the press) l wouldn't have done well compared to my equity returns.

Woodford performance:

http://www.moneyobserver.com/our-analysis/neil-woodford-out-to-prove-doubters-wrong

Top 25 fund managers:

http://www.moneyobserver.com/news/16-03-2017/revealed-25-top-performing-uk-fund-managers-over-past-decade

I would most certainly put some cash into a fund in the next recession to get some exposure to the US market. Until that time however one is pleased with the returns from equities.

ValiantSon

inflationbuster wrote: »

If i'd of invested in some of the UK's top fund managers i.e., Neil Woodford (whom is well 'advertised' in the press) l wouldn't have done well compared to my equity returns.

Woodford performance:

http://www.moneyobserver.com/our-analysis/neil-woodford-out-to-prove-doubters-wrong

Straw man argument. Neil Woodford is not the only fund manager. There are numerous different funds; picking one fund that performed poorly at one particular moment in time is an utterly specious argument.

inflationbuster wrote: »

I would most certainly put some cash into a fund in the next recession to get some exposure to the US market. Until that time however one is pleased with the returns from equities.

I'm delighted that you are pleased with the performance of your equities, but that doesn't in any way substantiate your view that funds deliver paltry returns.

Thrugelmir

Voyager2002 wrote: »

That was the point. Anyone who bought BP right after the Deepwater Horizon disaster, when its share price was right down and its survival seemed doubtful, eventually did rather well. Whereas anyone who bought RBS when the shares suddenly looked like good value lived to regret the choice. Who among us could have distinguished between the two situations?

Helps when BP declare and pay dividends in US $ though. As the actual dividend payout has been flat for the past 4 financial years. Without the exchange rate fall the shares wouldn't have appeared so attractive. BP remains a potential target for the likes of Exxon. Given the US's dislike of non US companies.

If you held a tracker fund in 2008. You couldn't have avoided RBS in any event. As it was the largest bank in the world at the time. Likewise Northern Rock would have been valueless. Barclays shareholders being diluted by the much vaunted warrant issue.
The list goes on.

Personally I fish in smaller pools. Riskier but more rewarding as a hobby.

bostonerimus

inflationbuster wrote: »

If you're only after safe and paltry returns invest in a fund.

Equity funds are not safe, but their diversity means they have less risk than a single equity in the same sector.

I imagine you are aware of the statistics of stock and bond market returns and so to maximize your chances of success you should design a portfolio to meet your requirements with the lowest risk possible.......efforts to maximize return without regard to risk are foolish. The effort to maintain a diverse portfolio of single stocks and bonds is time wasted when there are so many fund options......maybe there's an argument for individual bonds, but it's hard to make one for individual stocks.

Alexland

inflationbuster wrote: »

Neil Woodford (whom is well 'advertised' in the press)

Generally the higher the press coverage the more I would want to avoid a fund manager. In active my preference is for funds and trusts that struggle to get attention and quietly get on with their job doing what they say on the tin.

Alex