My portfolio. Does this look ok?

Happy new year all.

Not sure about the bloke in the bottom photo. Too much New Year celebrations or early morning yoga practice?:

 

The one day of the year such poses of the bottom photo are allowed...

Tomorrow, such a pose would bring 10 hours of detailed analysis as punishment

Happy New Year all

 

If you're buying an index fund, nearly 40% will be ANZ, CBA, NAB and WBC, along with BHP and TLS. To me, that is more risky than investing in a concentrated portfolio of high quality businesses.

I think you will find that Castlereagh Equity devotes more than 40 hours a week to work related to managing the fund (a lot of read and analysing companies).

I do not see one person running the fund as an issue. Worst case scenario they die, there is a contingency plan in place of an appropriate person to continue running the fund. If I was not confident in the new person (although I am), I could easily withdraw my funds.

My SANF is better knowing I have someone purchasing businesses at single digit cash flow multiples for me. That gives me far better SANF that I could ever have knowing circa 40% was dependent on the big 4 banks, BHP and Telstra.

 

Sure. Exit the fund and realize CG if you are lucky.

It comes to asset allocation though right. For mine, relying on a guru to find these hidden bargains on the Oz bourse (or relying on Oz listed equities alone) doesn’t hit the SANF threshold, but we each do what we need to.

 

What is your approach then, Falco?

 

I’ll PM you

 

Hi Frank
That's the big unknown with some of these LICs, they are 'picked' stock ala a managed fund without set index rules.
I am wondering how they stack up against the ETF VAS over the long term.
Was also looking at the new ETF VDHG as it's basically a few indexes and in many ways a complete solution in one stock.
Anyway when I looked on COMSEC it seemed to be limited amount of trading. If you wanted to invest a largish amount say your 1.5m, being an index proxy would it expand to allow you to 'buy' in in one large transaction? Say you whole 1.5mil in on hit went on VDHG (10 percent bonds)or The next less risky(?) one VDG(20 percent bonds).
The day I looked there were only limited sellers so would the fund allow you to buy in such a large amount anyway?

Food for thought - growth (maybe) and income.

 

Yes, not really a large amount relative to VDHG and the underlying equities.

Yes, it is open ended.

You can make this comparison easily, AUI has pretty well hugged the index (VAS/STW) the last 10 years, prior it showed out-performance.

I would agree.

 

In the near future when the pre-GFC highs drop off our 10 year charts is the GFC going to become a distant memory for many? "Long term" returns are certainly going to look very attractive, none of this same share prices 10 years later!

 

100%. Fence sitters will finally see the “long term” TSR they are looking for and buy into LICs. lol.

 

The way I look at the above chart and the argument about 10 years of no CG is in 2007 you could buy one share of AUI and receive 23 cents FF dividend. In 2017 you could buy the same AUI share for nearly same price and receive 34 cents per share in FF dividend. Almost 48% increase.

Not sure about you but I think AUI is much better value today than it was in 2007. Would I buy AUI now? If I am an accumulator and DCA then Yes. If I am going to be investing lump sum I would wait for AUI to trade around 52 week low or when the gross yield is around 6.5% which if you are patient enough will happen. I was buying AUI around $7.28 mark not long ago.

Cheers,
Oracle.

 

Thank you everyone for your contribution one of the best thread and each post has it's depth and tgere are some funny ones too.

Worth spending long weekend reading this.

 

Doesn’t sound like a very exciting way to spend a long weekend.

 

On the contrary @Nodrog , the roller coaster of emotions I went through thinking now for sure @Frank Manno got it right and then He comes back with another confusion (same/similar question but different structure) and the lectuer starts again

I could imagine what @Frank Manno was going through (ocean of information and less time to absorb) and on top @SatayKing 's subtle comments ignite the discussion again, I was literally laughing when you just threw the towel lol

Nah...on a serious note This thread is a wealth of information and whoever will read these 24 pages will not forget due to vatious questions but same answers (repetiative) stuff.

I must admit -I need to read @Alex Straker 's commnt (full detailed answer to @Nodrog 's question) again to fully understand (at least I can try or get in touch with him ) , I liked how he didn't point finger at Advisor 1 and 2's porfolio (very professional).

@willy1111 also articulated those 11 points in a great way.

Once again thank you everyone.

 

wondering how is everything going with your portfolio @Frank Manno ???????

 

Me too, a few dips recently....
So is it fair to say timing is important

 

No I think @pippen is asking how Frank is going with creating his portfolio which is what the thread was about, not in regards to any price movements.

Not much going on really. Prices are roughly the same.

I’m sure many of us are busy collecting the incoming dividends and tipping that into the next purchase. Boring but delightful

 

I am also interested on how Frank went with his portfolio considering what happened recently.... $60B loss a couple of weeks ago?? has the market recovered?? I really hope so. I think you need nerves of steel to be playing at the moment

Not trying to be rude or smart, but what is delightful ?? if someone buys in prior to a correction??

 

Looking back on what Frank was intending to invest in,he would have found out very quickly how resilience plays a big part how one reacts when things don't go your way,plus the money maybe was never invested..

But if it was and all the div's combined with franking credit's start turning up in the po box he may be thinking different as the weekly price does not matter..

 

Cash flow is king or queen