Help for a Newbie please

Investment Analysis Clubs Saul’s Investing Discussions
41

Hi Volfan:

buyandwin, I recall that you have a somewhat unique approach within Fooldom, with a strong bias towards dividend-paying stocks. Could you post your present holdings and their approximate yields.</i.

My current portfolio consists of 9 securities.

1)ARCC—Yield–8.9%—Part Of portfolio–14.9%
2)RA-----Yield-10.4%—Part of portfolio—0.5%
3)UTF----Yield–8.3&—Part of portfolio—2.4%
4)ETE----Yield–6.9%—Part of portfolio–12.6%
5)EVA----Yield–8.2%—Part of portfolio—7.7%
6)GAB----Yield–9.4%—Part of portfolio–21.0%
7)HASI—Yield–7.3%—Part of Portfolio–17.8%
8)MPLX—Yield–6.9%—Part of portfolio–21.6%
9)NEWM—Yield–8.3%—Part of portfolio—1.4%

Portfolio current average annual income 7.67%

Income received as of June 1 2018 is 15.75% above the income received to June 1 2017

The income growth comes from dividend growth and Income received that is more that I spend for expenses-taxes-gifts-contributions so the excess income is reinvested for more income shares.

I hope this helps
b&w

10 Likes
42

My story is similar to many here. I started young and dumb and curious and broke and committed for the long term with an advisor and mutual funds, then a different advisor and different funds, then finally my last advisor and last set of funds (outside of current 401k plan limitations). For the last 10 years or so I’ve been on my own with individual equities, with Foolish help among other sources. The final motivator for me was leaving a long-term job and rolling that 401k into a self-directed account, about the same time my wife closed her business and we rolled her SEP IRA into the same brokerage. It probably also helped me take the leap when the last advisor couldn’t answer my questions about diversification and specific fund classes and holdings… nice guy, but an advisor not an investor.

Since I’ve found this board, and other sources advocating for a concentrated portfolio, I’ve changed my strategy some. Slowly, as it’s both emotionally difficult to unwind a portfolio of ~60 stocks built over 25 years with a ‘buy and hold’ mentality, and also functionally challenging to go from ~60 holdings to ~10 with some amount of caution and intent to buy in ‘tranches.’ I didn’t build my current portfolio quickly and I don’t feel the need to rebuild something different quickly. Over the last six months I’ve pared down to ~30 equities, all winners over my current holding periods – up to eight years for the longest but an average of 3 years in total, with MDB, OKTA, PSTG, AYX and TLND being the newest faces.

My longer-term plan is to dedicate ~half my portfolio to the stocks discussed here and those similar to them, while keeping the other ~half in holdings that exceed S&P returns by 10 percent or more over 2+ years – PAYC, NFLX, AMZN, MA, BOOK, APPL, etc. I don’t need ~40% or better returns to reach my financial goals and I sleep better with a portion of my nest egg invested in more established companies. As the old saying goes, ‘bears make money, bulls make money, pigs get slaughtered.’

I have also recently switched from Excel to Google Sheets to take advantage of the ‘=googlefinance’ function. There’s probably an Excel way to call the same historical prices, but I like to shop where I own and GOOG has been in my portfolio for 6 years. MFST was for a time, but has been long gone. GOOG is one of the holdings it’s difficult to part with, and I may not. They’re not the ‘fast growth’ stock advocated here, but their breadth and ubiquity impress me. Google AdWords is an integral part of my work life and I don’t see a replacement on the horizon, regardless of regulation or recession.

As long as I’m prattling on, here’s why I started as a buy and hold investor… My great-grandfather dabbled in the stock market. He bought ~10 stocks when he came home from WWII, then died of a heart attack a few years later. Fast forward 30+ years, my great-grandmother died. She knew nothing of investments or finance, yet her estate had grown low seven figures. All from three of the ~10 companies her husband bought decades earlier and she ignored. The other seven companies had gone bankrupt along the way, but the three were stellar (ABT, GE, whatever Standard Oil was back in the day). I was just finishing college and heading out into the work world when she died. I thought, ‘Hmm, if it take 30 years to be a multi-millionaire by investing in 10 stocks and holding on, I’m in.’ Of course it’s not that simple, but it seemed to be so to me at the time.

And again like many here, I’m grateful for the expertise so many freely share under Saul’s leadership and guidance on this particular board. I’m confident I have the analytical skills to contribute more to the discussion in the future, I just need to learn how to apply them in the right way and get rid of this pesky day job to clear more time for my true passion, investing.

Carpe diem…

Kip

25 Likes
43

Snappy Salute Returned Sir!!

Aye, aye, sir.

OT here.

My oldest son is an LTJG in the US Coast Guard. He’s saving/investing about 50% of his income.

My youngest son is a rising firstie at the USCGA. He’s been investing since he was a freshman at the Academy.

I’m mentoring about 6-7 others. That includes another LTJG and two Ensigns who are all currently in flight school.

One of them, besides investing in stocks, bought his first home at age 22/23. He’s currently living in it PT and making quite a bit renting it on Airbnb.

Besides being a retired ETC, pension in about 9 years, I recently retired from being a police officer. So far, these first few months, I’m saving/investing over half of my pension.

A common denominator of my sons and I and a few others is that we are all frugal. My oldest son, just 25, thinks he can be financially independent, FI, in about a decade. His XIRR since 2012 is about 26%.

www.ChooseFI.com is a cool site, among many others, that focuses on being frugal as a path to becoming FI at a young age.

www.biggerpockets.com is another cool site that focuses on REI.

However, if you treat the D17 and PP as baskets, then have a basket of Sauls stocks, then use a VA loan to buy a duplex or triplex and have your tenants pay your mortgage, on top of the military paying it, and then do your 20 and get a pension, you will be fine.

I’m sorry to go OT on Saul’s board, but perhaps this post can help someone else here.

Fool on,

mazske

1 Like
44

go from 120 stocks to 10-12

First of all, congratulations on your success in building such a nice portfolio. There are lot of great advice on how to do the reduction. I have a question for you, why you think you need to reduce to 10~12? I understand 120 may seem large and you want to reduce to a manageable size, but don’t you think 10 to 12 is too small?

I know this board is all about concentrated positions. But it comes with certain risks. Rather than pick a number, here are some other alternatives to think…

  • How much I want in small cap, vs large cap
  • How much I want in a given sector, industry
  • Tax considerations (this is touched by many already)
  • How confident you are with your top 10 ideas?
  • Have you considered professional help?
  • Have you considered Index, international etc?
2 Likes
45

I have a question for you, why you think you need to reduce to 10~12? I understand 120 may seem large and you want to reduce to a manageable size, but don’t you think 10 to 12 is too small?

Thanks Kingran - Great thoughts and questions.

I guess it is because with over 120 stocks, all recommendations from various TMF publications, I have never really done any individual research on a stock and simply relied on the expertise and trust in TMF.

Granted and admittedly, not a very sophisticated way to do it but as I have indicated my portfolio has increased nicely - but I never track Rate of Return, and rather just watch the percentage increases in my accounts total gain/loss column (as I often add to those positions, and rarely go to Purchase lots) I am only looking at an overview of the return. I really can’t even tell you accurately what percentage of my portfolio any of my stocks hold.

Never thought it really mattered as long as the charts were up and to the right!! I would occasionally sell a stock and redeploy the cash, but more by taking a scroll down the portfolio, pick a stock that might have a loss, or be a laggard and sell it! Research for me was looking at the 50/100 day exponential moving averages and seeing if they had crossed or heading in the wrong direction.

Frankly, I have done significantly better than many/most of my peers so I assumed I was using the “right approach” and was pretty happy.

So as I literally stumbled on this site because Steve Manzi posted something on Facebook, I have read thousands of posts now and have “bought graph paper” as recommended by Saul and have tracked many months of his summaries - all in an attempt to “get smarter”.

As I do this I have seen that at least seven stocks he has bought and sold or still holds are currently in the Partnership Portfolio or Rising Stars.

In looking at those stocks - I am a little slow in my research as I don’t know the best sites to mine the information, - I am improving my game!! It has highlighted how little I know about my portfolio on both a micro and macro level. I intend to become more educated as to the process, pick a workable amount to dedicate to employing this process.

I am also committed to knowing more about “all of my stocks” other than just looking at the total gain/loss shown on the Fidelity and Schwab sites. That will be a long process with 120+ stocks.

Ultimately, as I have paid so much for Rising Stars/Partnership Portfolio and others I will still keep a couple of buckets open to follow those and that will be about 50 stocks (as there is some cross over) and whittle my holdings down in a more disciplined manner and redeploy the funds - but focus on the Saul/NPI portfolio and grow it as I learn the ropes.

Long winded answer to your thoughtful questions - sort of a mea culpa, but one that I believe many investors are in the same boat as me and missing some great upside potential in the long run.

If I can get down to 10-12 stocks in the next couple years and use the expertise gained from ALL of you very knowledgable investors who are extremely generous with information, then I could do a much better job tracking my portfolio and improving my returns!

Once again MANY THANKS to all of you who continue to provide such valuable knowledge.

Best regards,

GaFez

3 Likes
46

some suggestions I would make if you are having trouble selling some stocks because you feel you will miss the big event in next 1 year go ahead pick up a few options and sell the stock so you have the capital and in 6 months those options dont make money just sell them off.

The other thing you need to do is look at your winners vs the so and so and understand that you could have deployed that capital in the winers and made a lot more.

I know its hard but over a few months get a plan to get down to 50 and then to 25 …

47

David,

Re: December 2018
re: recession

https://www.tradingview.com/chart/DXY/7dPyZZv4-Obvious-broke… when this hit’s below 85 ALL HELL WILL BREAK LOOSE
Panik will set it when the market starts to fall.

Just a thought,

Quillnpenn -

48

http://www.macrotrends.net/1329/us-dollar-index-historical-c…

dollar index hit below 85 in 2010 ,near the start of a this super bull market

Panik will set it"?

3 Likes
49

Mauser,

Thanks for the chart

Quill -