Growth and Value

Bobziz

Thrugelmir said:

Audaxer said:

Thrugelmir said:

Treat every investment on it's own merits and don't get hung up on whether it offers growth or value. There's always value to be found if you are prepared to take a contrarian stance and have the patience to wait.  I've bought individual shares on the basis of value and held them for periods as short as 3 days (29% rise) and so far forever (though have top sliced one holding when the share price went exponential).  Of course not every investment pays off but that's part and parcel of being an investor. 

The question is, are you beating the market by buying and selling individual shares? It sounds a bit like market timing, that we are constantly told on here, does not work? 

I like to be transparent. All the shares here 

https://forums.moneysavingexpert.com/discussion/5719522/great-british-invest-off-or-passive-v-active-portfolios#latest

are held in (differing) quantities within my (larger) overall portfolio. 

Likewise the performance hasn't been too bad 

https://forums.moneysavingexpert.com/discussion/5719527/great-british-invest-off-or-passive-v-active-updates#latest

over the past 4 years.

80% over 4 years looks great, beating even the S&P. Market timing doesn't work for the majority. Clearly you are not part of the majority but worth noting that your portfolio appeared to lag the ftse all world by a fair margin prior to the pandemic crash. How did you get on over the GFC crash ?

Thrugelmir

Bobziz said:

Thrugelmir said:

Audaxer said:

Thrugelmir said:

Treat every investment on it's own merits and don't get hung up on whether it offers growth or value. There's always value to be found if you are prepared to take a contrarian stance and have the patience to wait.  I've bought individual shares on the basis of value and held them for periods as short as 3 days (29% rise) and so far forever (though have top sliced one holding when the share price went exponential).  Of course not every investment pays off but that's part and parcel of being an investor. 

The question is, are you beating the market by buying and selling individual shares? It sounds a bit like market timing, that we are constantly told on here, does not work? 

I like to be transparent. All the shares here 

https://forums.moneysavingexpert.com/discussion/5719522/great-british-invest-off-or-passive-v-active-portfolios#latest

are held in (differing) quantities within my (larger) overall portfolio. 

Likewise the performance hasn't been too bad 

https://forums.moneysavingexpert.com/discussion/5719527/great-british-invest-off-or-passive-v-active-updates#latest

over the past 4 years.

80% over 4 years looks great, beating even the S&P. Market timing doesn't work for the majority. Clearly you are not part of the majority but worth noting that your portfolio appeared to lag the ftse all world by a fair margin prior to the pandemic crash. How did you get on over the GFC crash ?

Calender year to 31st December 2020 my full portfolio ended up just over 39%.  The more volatile the markets the greater the number of opportunties arise. I'm always reminded of the quote. 

“Successful investing is only common sense. Each system for investing will eventually become obsolete.” 

Sometimes taking a contrarian stance can be a lonely place to be. Fortunately I've my own bank of lifetime of experiences to call upon. Which over the years has involved into a personal strategy that works for me. On occassions can be little be more than gut instinct. 

tebbins

Thrugelmir said:

Bobziz said:

Thrugelmir said:

Audaxer said:

Thrugelmir said:

Treat every investment on it's own merits and don't get hung up on whether it offers growth or value. There's always value to be found if you are prepared to take a contrarian stance and have the patience to wait.  I've bought individual shares on the basis of value and held them for periods as short as 3 days (29% rise) and so far forever (though have top sliced one holding when the share price went exponential).  Of course not every investment pays off but that's part and parcel of being an investor. 

The question is, are you beating the market by buying and selling individual shares? It sounds a bit like market timing, that we are constantly told on here, does not work? 

I like to be transparent. All the shares here 

https://forums.moneysavingexpert.com/discussion/5719522/great-british-invest-off-or-passive-v-active-portfolios#latest

are held in (differing) quantities within my (larger) overall portfolio. 

Likewise the performance hasn't been too bad 

https://forums.moneysavingexpert.com/discussion/5719527/great-british-invest-off-or-passive-v-active-updates#latest

over the past 4 years.

80% over 4 years looks great, beating even the S&P. Market timing doesn't work for the majority. Clearly you are not part of the majority but worth noting that your portfolio appeared to lag the ftse all world by a fair margin prior to the pandemic crash. How did you get on over the GFC crash ?

Calender year to 31st December 2020 my full portfolio ended up just over 39%.  The more volatile the markets the greater the number of opportunties arise. I'm always reminded of the quote. 

“Successful investing is only common sense. Each system for investing will eventually become obsolete.” 

Sometimes taking a contrarian stance can be a lonely place to be. Fortunately I've my own bank of lifetime of experiences to call upon. Which over the years has involved into a personal strategy that works for me. On occassions can be little be more than gut instinct. 

Mind if I ask if you're still working, retired, does that 39% include deposits/withdrawals during the year?
I'm sitting here mildly jealous having just checked my Vanguard account... 8%

Thrugelmir

tebbins said:

Thrugelmir said:

Bobziz said:

Thrugelmir said:

Audaxer said:

Thrugelmir said:

Treat every investment on it's own merits and don't get hung up on whether it offers growth or value. There's always value to be found if you are prepared to take a contrarian stance and have the patience to wait.  I've bought individual shares on the basis of value and held them for periods as short as 3 days (29% rise) and so far forever (though have top sliced one holding when the share price went exponential).  Of course not every investment pays off but that's part and parcel of being an investor. 

The question is, are you beating the market by buying and selling individual shares? It sounds a bit like market timing, that we are constantly told on here, does not work? 

I like to be transparent. All the shares here 

https://forums.moneysavingexpert.com/discussion/5719522/great-british-invest-off-or-passive-v-active-portfolios#latest

are held in (differing) quantities within my (larger) overall portfolio. 

Likewise the performance hasn't been too bad 

https://forums.moneysavingexpert.com/discussion/5719527/great-british-invest-off-or-passive-v-active-updates#latest

over the past 4 years.

80% over 4 years looks great, beating even the S&P. Market timing doesn't work for the majority. Clearly you are not part of the majority but worth noting that your portfolio appeared to lag the ftse all world by a fair margin prior to the pandemic crash. How did you get on over the GFC crash ?

Calender year to 31st December 2020 my full portfolio ended up just over 39%.  The more volatile the markets the greater the number of opportunties arise. I'm always reminded of the quote. 

“Successful investing is only common sense. Each system for investing will eventually become obsolete.” 

Sometimes taking a contrarian stance can be a lonely place to be. Fortunately I've my own bank of lifetime of experiences to call upon. Which over the years has involved into a personal strategy that works for me. On occassions can be little be more than gut instinct. 

Mind if I ask if you're still working, retired, does that 39% include deposits/withdrawals during the year?
I'm sitting here mildly jealous having just checked my Vanguard account... 8%

I was fortunate to walk away just over 2 years ago. Decided to that I had had enough of working in the field of finance in a variety of guises. Living off some cash savings for the time being. All I contribute currently is the permissable net £2,880.  Now having the extra hours is a real bonus. Though only so much you can listen to, watch and read in a week. Hence my focus primarily on UK equities when trading individual shares. Anything else I'll use IT's/Funds/ETF's for.  This calender year I'm up just over 27% as of today. Though to achieve this level of returns I'm comfortable building 6 figure positions in smaller capitalisation companies and those with less market liquidity if the investment case warrants it. Every time the price slips back I add some more. Being able to react quickly to price fluctuations during a trading session is a bonus. Though I use limit trades a lot when available stock to purchase is thin.  On occassions you just need to park your tanks on the lawn and wait for other people to join the party. Surprising how many well managed quality companies exist that investors have never heard of, including myself. 

Example of a very recent turnover trade is Good Energy (GOOD). Have a look at the share price chart once the takeover bid was spurned. A company that I've been following for a while. Not something I could have done if at work. 

Bobziz

Thrugelmir said:

I was fortunate to walk away just over 2 years ago. Decided to that I had had enough of working in the field of finance in a variety of guises. Living off some cash savings for the time being. All I contribute currently is the permissable net £2,880.  Now having the extra hours is a real bonus. Though only so much you can listen to, watch and read in a week. Hence my focus primarily on UK equities when trading individual shares. Anything else I'll use IT's/Funds/ETF's for.  This calender year I'm up just over 27% as of today. Though to achieve this level of returns I'm comfortable building 6 figure positions in smaller capitalisation companies and those with less market liquidity if the investment case warrants it. Every time the price slips back I add some more. Being able to react quickly to price fluctuations during a trading session is a bonus. Though I use limit trades a lot when available stock to purchase is thin.  On occassions you just need to park your tanks on the lawn and wait for other people to join the party. Surprising how many well managed quality companies exist that investors have never heard of, including myself. 

Example of a very recent turnover trade is Good Energy (GOOD). Have a look at the share price chart once the takeover bid was spurned. A company that I've been following for a while. Not something I could have done if at work. 

Moving to 35% cash just before Covid spread west was an inspired move. 

Thrugelmir

Bobziz said:

Thrugelmir said:

I was fortunate to walk away just over 2 years ago. Decided to that I had had enough of working in the field of finance in a variety of guises. Living off some cash savings for the time being. All I contribute currently is the permissable net £2,880.  Now having the extra hours is a real bonus. Though only so much you can listen to, watch and read in a week. Hence my focus primarily on UK equities when trading individual shares. Anything else I'll use IT's/Funds/ETF's for.  This calender year I'm up just over 27% as of today. Though to achieve this level of returns I'm comfortable building 6 figure positions in smaller capitalisation companies and those with less market liquidity if the investment case warrants it. Every time the price slips back I add some more. Being able to react quickly to price fluctuations during a trading session is a bonus. Though I use limit trades a lot when available stock to purchase is thin.  On occassions you just need to park your tanks on the lawn and wait for other people to join the party. Surprising how many well managed quality companies exist that investors have never heard of, including myself. 

Example of a very recent turnover trade is Good Energy (GOOD). Have a look at the share price chart once the takeover bid was spurned. A company that I've been following for a while. Not something I could have done if at work. 

Moving to 35% cash just before Covid spread west was an inspired move. 

There was news coming out of China in early February 2020 that force majeure was being called on oil and gas, and other commodity contracts such as coal and iron oil. As Chinese manufacturing shuts down for the Chinese New Year at the end January. Struck me that there were serious issues (that weren't getting much coverage here). If China sneezes then the rest of the world would catch a cold. (An expression once used for the USA).  Positioning my portfolio defensively seemed a sensible move. Though had no expectation for markets to bounce back so quickly. 

aroominyork

I am reopening this because I still do not quite get the view that inflation is bad for growth stocks. Is it because they are investing now for future returns, so their costs today are increased by inflation but they are earning comparatively low revenues to cover this; whereas value stocks are generally profitable now and are not investing large (inflation sensistive) amounts with an eye on future growth?

coastline

aroominyork said:

I am reopening this because I still do not quite get the view that inflation is bad for growth stocks. Is it because they are investing now for future returns, so their costs today are increased by inflation but they are earning comparatively low revenues to cover this; whereas value stocks are generally profitable now and are not investing large (inflation sensistive) amounts with an eye on future growth?

Why does inflation tend to be good news for value investing? - The Value Perspective - Schroders

How inflation affects growth versus value | The Evidence-Based Investor (evidenceinvestor.com)

How Does Inflation Affect the Stock Market and Share Prices? | IG UK

Thrugelmir

Thread is over a month old.........

Problems at MSE control it seems with old threads being listed as the most recent posted. 

tebbins

aroominyork said:

I am reopening this because I still do not quite get the view that inflation is bad for growth stocks. Is it because they are investing now for future returns, so their costs today are increased by inflation but they are earning comparatively low revenues to cover this; whereas value stocks are generally profitable now and are not investing large (inflation sensistive) amounts with an eye on future growth?

Another big part of it is how so-called "growth" companies, particularly large-growth may appear to be reinvesting more in their capital-intensive operations... By borrowing at cheap interest rates (which may or not be correlated with inflation in future) to do buybacks - and buybacks definitely are correlated with corporate bond yields and benign/low-inflation conditions (https://www.bis.org/publ/qtrpdf/r_qt1503v.htm).
Also, growth sectors tend to attract capital, labour, enterprise and new government attention - it gets crowded and regulated fast and often stupidly. Capital and prices have to be cheap(er) but the labour and assets are often specialised and in-demand, when inflation hits shareholders seek protection while creditors and labour demand more and the competition becomes fiercer, emphasising the struggle against cost rises in an already inefficiently priced market.
Benign economic conditions may make it easier for them, perhaps more challenging times is what tests their sticking ability.

The way I like to think of it is like a forest in a storm, the fast-growing saplings will be hurt most, but those that survive may do better, meanwhile the old matured ones have weathered worse before.