Hitting one equity My value investing process mostly involves putting all of my cash into one equity for a period of months to a couple of years. I don't know of anyone else who does this so here it is. There are 1600 companies in my long-list spreadsheet. 31 companies were selected from that sheet and live in my short list. These are the companies I track and read about. Of these 31 companies, there is nearly always a single company that I believe has the best value. These companies don't come and go with the wind. A company that looks good will tend to look good until either the business falters, the stock price goes up, or the company is purchased. What has happened is a single company becomes the favourite and will remain so for 0.5~5 years. During that period, I allocate all cash to purchasing that single stock. No balancing. No diversifying. When that company is no longer the pageant winner, all cash is then allocated to the new best guess. I've ended up with a portfolio that is more normal looking than you might expect but there have been times when my largest position was twice the size of the penultimate one. I'm sharing this because I read so much about diversification and balancing. I see no value in these things.
It's nice to meet you, Pascald. I don't trade commodities. Also, I have no interest in cryptocurrency. Both of these pursuits involve redistribution of wealth. They do not create value of their own like a company does. There is a ton of crypto discussion around the net. I'm the last person to comment on it, other than perhaps the mechanics of the hash search algorithm. I'm happy to discuss stocks, bonds, debentures, options, etc., though.
WBI = 179 Our portfolio has been treading water since our February peak. Even when the market went down quite a bit, we were barely down a tick. Just off our ATH. I've been trying to clean up small amounts of cash in a couple of accounts for a while. I've had long term limit orders standing by to scoop stock and they were extremely close to executing, at times, but haven't quite connected. This morning, markets were sharply up and two of our core holdings dipped enough to execute both orders. At this point, late in the day, we have recovered to almost exactly where the day started. What I believe is happening is, some people are swing trading growth and stable stocks. Suffice to say, my companies are the bedrock of the market. REITs, financials, utility, building materials.... boring, stable, distributing, companies. I can see trade volumes elevate on my core holdings a little bit and valuations creep up, when the market is receding. Money is clearly transferring from growth to conservative when the market pulls back. This morning, money was transferring from conservative to growth. I've been looking for a growth company but haven't found any. I do hold one company that is a micro-cap (3.5M market cap). It's an RE speculation company that is mostly stable. They had a few months of wild gains that drained out about as fast as they were made. I'm up something like 20% on a stock that is really risky. Suffice to say, I don't have a bunch of money in it. The speculative RE company is not operated like a REIT. They have income from a bunch of leases but they have quite a bit of property turn over and have done quite well. I'm happy with how these young firebrands are running the company so I'm a happy partner in this business. The stock will probably reflect company performance, at some point in the future. PE was 1.9 in 2021, so I'm not worried about it. I'm focused on people and companies with no regard for the fad of the moment. I leave that shell game to traders to cash in on.
This is a very interesting thread to choose to place this question. I can't wait to see your segue into your advertisement.
To put a finer point on it, yesterday when the market started going sharply up, around noon my time, my two largest holdings wend down for a period of about 20 minutes, starting at the same time. My stocks recovered well before the market went back down. There seems to be an inverse twitch in stable stocks, before market swings, suggesting a swing trade but the market continues on it's trajectory while conservative stocks return to previous state very quickly. I've noticed this very many times, over the last several years. There is probably a swing trade to be set up on this or, at least, it seems to be an indicator of money flow within equities.
The WBI closes the week at 169.6. That's almost down to sane levels. Almost. The reduction is owed to a rollback of the Wilshire 5000, coupled with yesterdays slight bump to the GDP. I would say a reasonable market would max out at a WBI of 160, so we are within a stone's throw. Certainly, we are way off ATH of this indicator and in a heightened crash alert but the emergency passed with no crash.
Our portfolio has been boring since selling Tesla in 2021. I own a micro-cap RE investment company based in Vancouver that I am impressed with but it's little more than a nicely performing distraction. It isn't going to 25x in 5 years, like Tesla did. It's my only pure growth company. These companies aren't random pics for me. I'm looking for a group of guys who want to plant trees in an open field and grow it to a mighty forest. I could have ridden the Twitter wave. I have seen it coming for some time now. That would not have been investing. That would have been playing a strong hunch. I could buy back into Tesla knowing they were literally down to one minor FSD hurdle two months ago and that was the metro area trains in Toronto. The rest of their system is sublime. I'm sure there will be a world of other coding to do once the cars have solid FSD capability but that will be engineering; the science will be done. I'm more interested in companies like JB Straubel's Redwood Materials. To be direct, I would put my money on JB over Elon, at this point. There are also several other companies I've been watching and laying in the weeds for an IPO. I have considerable cash (by my scale) laying in wait to swoop on the next potential opportunity. We are fortunate to be in a position that allows this. Is anyone else watching a bunch of companies for signs of an IPO so they can swoop?
No, I haven't considered it. Thank you for the idea, RTN. It's certainly something to think about. I'm going to look into it.
Sometimes when I have a buy order that I'm watching closely and I'm busy, I monitor it with Yahoo Finance. It does a good job and they don't even delay it, anymore. They quote the bid and they chart the ticker. In this way, the quote and the chart are not the same. This is the correct way to do it. You would probably never notice with the vast majority of stocks which have big volumes but with low volume stocks, like this one, it is something to keep in mind. The quote has been jumping around between 14.94 and 14.99. The current ask is 15.03. This indicates one or more people are fishing for the bottom of the same stream where I am fishing. Every once in a while, a market order will come through and it will connect with the highest bid (or oldest, in the case of a tie).
Because we own a few companies that don't have a lot of volume, I very rarely talk about what those companies are. When there are three transactions on the ticker for a trading day, I don't want to compete against a 14 year old who stumbles across my post and uses it as a hot tip. We all have to do our own research so it's counterproductive to look over each other's shoulders too much. I've spoken about Tesla because a 2 cent player, like myself, can't possibly have the least bit of impact on the stock with that kind of volume.
I will mention that low trade volume companies, like NWH, require a different approach on acquisition and disposal of shares. If there are 5K shares traded on an average day, trying to scoop 25K shares in one buy order will send the price to the moon. With a little patience, it isn't difficult to build these positions up over time. The same techniques will be necessary when we are divesting of these companies. You could sell $5M of Tesla in one transaction and have essentially no impact on the price but something like NWH will require selling off over a period of time. Pulling $100K out of it might take me three weeks.
I would be very interested in reading your thoughts once you gave it a good look. I am considering it.
WBI = 168.4 We currently have a medium amount of near cash. It's probably low for a retired person but we do have a bit of deployable cash. These are unusual times. Everyone is retail investing, these days. Any dip that might happen will cause euphoric buying. At this point, I think the odds of a significant correction (more than 12% dip) are 50/50. That is based on sideline cash, retail investing thoughts, and gross speculation. Whatever the case, I'm going to let my cash build for a while. Within the next year, or so, equities should slingshot to whole new highs unless the economy implodes on itself.
Hopefully the average person with a little liquidity has caught on that all the big dogs are in the market so that is where one goes to build wealth and not get left behind. At least I am hoping it is that and not some passing fad where most people cash out as losers at the bottom.
At this moment, the WBI is an almost reasonable 163.4. Our portfolio has been taking some abuse, of late. We are off 2.1% from ATH.
Indeed, Spud. Welcome to Stockaholics. At this point, the last two of my long term limit orders have filled. They were small orders but I still enjoy getting good prices. Our cash position remains strong. We have plenty of cash to live for 5 years plus some money to buy a bit more if there is a fire sale on companies. My next buy trigger is a significant step down so I am no longer able to take advantage of the market at current levels. The WBI has dropped to 162.9.
I have a position that pays around 15% dividend. Has for several years. Like some of yours, it's a low volume under the radar company.
