Suggestions for a speculative punt?

kinger101

adindas said:

The problem with Motley fool is hat you will get advice from low rated analysts might be some of them are not professional analystst at all) . 

I used to think Motley Fool was written by bots.  But I've changed my mind because the quality of article a bot would write would surpass the ones found in Motley Fool.

adindas

I have read an article from a few analysts who once believe in funds has started moving away and started managing and diversifying his own portfolio.

The problem with some funds you might be holding is they slow to response to take advantage of the rapid changing environment without you be able to intervene. With the exception of Cathie woods and many analysts on CNBC, some funds are managed by traditional fund managers, who are very traditional in valuation relying only the tools such as EPS, P/E, P/B ratio, EBITDA etc, and have little knowledge of the technology and therefore the potential growth of the companies.

Good examples are taking advantage of COVID-19 stay/working from home, Cloud base, Online shopping stock. It is highly unlikely the funds you are holding contain the stock like, Zoom, Shopify, Crowdstrike or Cloudbase software’s. Not to mention the COVID-19 vaccine producing small/medium cap companies, Biotech companies. Depending on your fund you wil not be able to take advantage of  the sudden the massive price increase on these stocks. You will also have a chance to quickly unload them when the hype due to COVID-19 has gone.

Another example is adding your position in high quality stocks when they are having a dip. A good example is Facebook stock which have seen the stock price dip due to bad publication recently. With fund you do not have any control of this.

Many fund managers fail to recognise the potential of the emerging technology in electric vehicle (EV), treating Electric Vehicle like Tesla, Nio, etc stock like traditional car makers. So, they start using the traditional EPS, P/E, P/B ratio, EBITDA etc and compare them with the car makers benchmark. The fund you are holding cannot take advantage of these. Mind you Tesla will soon be included in the S&P 500 and will propel to the moon at that time. How many fund managers have included EVs in their portfolio since the early days?

Just look back Microsoft, Amazon, Facebook, Netflix in their infancy, how many fund managers included them in their portfolio ? They now have turned to become a monster megacap companies. Amazon stock is now US$ 3200,  Tesla is now US$ 1544. While most of fund managers have these stocks as their main holding in their portfolio, how many of them taking advantage when they were still in infancy. I think betting in these sort of companies offer a much better reward/risk ratio rather than betting in crypto currencies.

bowlhead99

adindas said:

I used to rely on Motley fool but now I heavily rely on CNBC television to watch the hot stocks because most of these analysts are five stars analysts.

There is no such thing as 'five stars analysts' as there is no universally acknowledged system for categorising all analysts and assigning them 'stars' for doing a good job. 

If they are telling you for free that a company will do well, they are doing it for ego or they are telling you after they have already placed their own bets or told the people who pay them big money; and they are often wrong.

The problem with Motley fool is hat you will get advice from low rated analysts might be some of them are not professional analystst at all) and the best ones are hiding behind the paywall. 

It is a standard approach of companies whose income comes from stock tips and recommendations, to tell you that they have better ones behind the paywall which will come if you pay.

adindas said:

With the exception of Cathie woods and many analysts on CNBC, many index funds are managed by traditional fund managers, who are very traditional in valuation relying only the tools such as EPS, P/E, P/B ratio etc, and have little knowledge of the technology and therefore the potential growth of the companies. 

The managers of index funds do not rely on or use valuation techniques such as EPS, P/E, P/B etc to generate their returns. The funds that they manage are required to buy the constituents of the index in the proportions of the index, so an independent assessment of value does not come into it.

Just look back Microsoft, Amazon, Facebook, Netflix in their infancy , how many find managers included them in their portfolio during the infancy? They now have turned to become a monster megacap companies.

Facebook was not available on the public markets during its 'infancy', as it was a private company, although it was held by a number of venture capital funds who achieved large multiples on their investment cost when it IPO'd.  When it IPO'd it already had a $90bn valuation, so it had skipped all the small-cap and mid-cap stages away from public view. Though the price was initially volatile, a large number of fund managers bought in, though a large number didn't and it had fallen by just over 45% over the first three months.

If you had followed the Fool or CNBC tip sheets they would be giving you self-contradictory messages every other week and if you had used an active fund there's no guarantee they would have chosen it, at the IPO price.  It recovered and within about 19 months of IPO it had a value 45% higher than IPO and was an S&P500 member, with a relatively higher weighting than most other stocks in a US index, so all S&P500 index investors would have benefitted from that high weighting as it went up from $55 (less than 7 years ago) to $245 now. If you had used a NASDAQ 100 tracker you would have taken exposure a year earlier, at a lower price, because that index doesn't have the same 'seasoning' requirements about admitting newly-public companies with a low percentage of shares in public float (which is what had held back S&P from admitting it until it was longer on the market and some of the IPO lock-ups had expired).

Netflix at IPO was quite a different company than it is today. What it had in common was an algorithm to help consumers decide what movie to watch next rather than rely on recommendations from a video rental store cashier, and an aim to grow market penetration. But its main business was renting DVDs by mail. In its IPO filings it did not say it was going to eventually be a producer of its own content, and it barely made reference to concept of streaming.  If you bought at $1.20 at IPO and made a 450x gain over the last 18 years, well done. But since it joined the S&P500 it has done over 20x which is still not too shabby;  it looks like the multiple from IPO to joining the 500 is same ball-park as the multiple from joining the 500 to now.  Obviously if you wanted access to the pre-S&P500 returns you would have needed to buy a fund that buys smallcaps or midcaps (whether tracker or active) or identify for yourself that it was going to become a giant and buy it independently.

benbay001

The claim that fund managers are useless because none of them jumped on Amazon or Facebook in the early days is so amusing that its not funny.

How the hell do you spot an Facebook from a Bebo, or a MySpace? (I have no idea if the later two were public, but it helps make my point that for every startup gem that goes onto great things, there are many more that fall.

keyboardworrier

Just out of curiosity , which platforms are people using to buy their shares?

bowlhead99

keyboardworrier said:

Just out of curiosity , which platforms are people using to buy their shares?

All of the mainstream ones and, in lesser numbers, the newer start-ups.

adindas

AnotherJoe said:

Not just a First World Problem but arguably applicable to anyone who has a small amount in a pension (or ISA) that long term will make little difference so might as well go all in on a succession of shares to build the amount into something worthwhile. Eg if I could double the amount a few times then it's no longer chump change. So I've got a few quid in an ISA  that would be boring to just top up existing investments so I'm thinking I can see what I can do with it. First though is the Chinese EV Company NIo ticker NIO.  Any other ideas? 

I also bet against Airlines and Boeing. Warren Buffet sold many of his position in the airlines with a massive loss because he believes air traveling will be changing in the future. He might be right but he might also be wrong. Warrent Buffet is the top stock pickers but his guess about the air traveling in the future is the same with anyone else as this is unprecedented. Boeing Stock has been doing great for me sofar but the Airlines is still in red. But I am planning to add my position in airlines considering the current price.

A few airlines might not survive due to high fixed cost but those who survive will take share of other airlines. What I know for sure is that there is currently no substitute for the long-haul flight. The key people in business, holiday makers, family reunion still need air traveling. Those airlines who manage to survive will take the share of other airlines that collapse.

Based on my own research and due diligence the following airlines seems to be a great contender which might survive: Delta Airlines, Southwest. Spirit Airlines. It is quite a risky bet to be honest as if the second COVID-19 pandemic hit again in winter they might collapse. But considering the current price level and considering the potential to come back to pre COVID-19 price level, the risk is wothy to be undertaken.

adindas

AnotherJoe said:

"Please note that due to current regulations, you cannot place a dealing instruction for NIO Inc ADS Each Repr 1 Ord A SHS in an ISA or a Cash ISA"

What do you mean with this i still hold NIO under my S&S ISA account which I bought it about 1.5 months ago ??

DiggerUK

I'm surprised nobody has mentioned Self Storage and Pawnbrokers. They were  big winners following FC1, no reason to suspect they won't do well in FC2.

Mail Order Wine has picked up a lot of new customers in lockdown...... and we all like a drink.  Mail Order in general has also been given a whole new repeat customer base from lockdown....EBay, Amazon etc., have to be considered as überblauchip stock now..._

coyrls

adindas said:

The problem with many index funds are they are slow to response to take advantage of the rapid changing environment without you be able to intervene.

Do you know what an index fund is?