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 Post subject: Stock Portfolio
PostPosted: Wed Nov 07, 2012 11:31 pm 

Joined: Wed Nov 07, 2012 6:21 am
Posts: 149
So here's today's portfolio based on value investing. I don't like that it is only 13 stocks (my smallest portfolio created so far using this method), but that's just how today turned out. Nothing I can do about that and I'm not about to put in a stock that doesn't pass my screening process. My previous smallest portfolio using this method was 15 stocks big.

Ticker Company 2012 11 07 Price
XRX Xerox Corp. 6.36
GPK Graphic Packaging Holding Company 5.91
SUP Superior Industries International, Inc. 17.29
BAS Basic Energy Services, Inc. 9.47
CLD Cloud Peak Energy Inc. 19.62
AIZ Assurant Inc. 36.69
BRP Brookfield Residential Properties Inc. 17.1
PL Protective Life Corp. 25.75
PRU Prudential Financial, Inc. 55.39
RGA Reinsurance Group of America Inc. 52.03
SYA Symetra Financial Corporation 11.44
HUM Humana Inc. 70.16
WLP WellPoint Inc. 57.85

Index/ETF Symbol 2012 11 07 Value
AMEX INDEXNYSEGIS:XAX 2380.683
NASDAQ INDEXNASDAQ:.IXIC 2937.288
NYSE INDEXNYSEGIS:NYA 8138.81
S&P 500 INDEXSP:.INX 1394.53
DJIA INDEXDJX:.DJI 12932.73
SPDR S&P 500 ETF Trust SPY 139.78
Financial Select Sector SPDR (ETF) XLF 15.61
iShares MSCI Emerging Markets Indx (ETF) EEM 41.46
iShares Russell 2000 Index (ETF) IWM 80.33
PowerShares QQQ Trust, Series 1 (ETF) QQQ 64.17

Sorry this is so messy, but the forum wouldn't let me upload the portfolio in Excel format or as a picture.


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 Post subject: Re: Stock Portfolio
PostPosted: Thu Nov 08, 2012 12:28 am 

Joined: Wed Nov 07, 2012 6:21 am
Posts: 149
FYI, the portfolios I make are meant to be held for one year. I do not make portfolios that are meant to be held any shorter or longer than that.


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 Post subject: Re: Stock Portfolio
PostPosted: Thu Nov 08, 2012 6:33 am 

Joined: Fri May 04, 2007 8:14 pm
Posts: 1976
You do realize, of course, that you will have to account for trading costs and tax impacts when you revamp your portfolio every year, right?


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 Post subject: Re: Stock Portfolio
PostPosted: Thu Nov 08, 2012 8:10 am 

Joined: Fri May 04, 2012 2:23 pm
Posts: 818
and you're taking on necessary unsystematic risk....

And of course, this tells us nothing b/c we don't know what proportion to buy these stocks in so we can make out billions.

And last, but not least, no real international exposure on the stocks? And just MSCI for the ETF's?

psst...in case you can't take a hint, we don't want your crappy model developed by an uneducated, broke man-child who is trying to raise money for college.

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Bichon Frise

"If you only have 1 year to live, move to Penn...as it will seem like an eternity."


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 Post subject: Re: Stock Portfolio
PostPosted: Thu Nov 08, 2012 11:43 am 

Joined: Wed Nov 07, 2012 6:21 am
Posts: 149
Of course there are trading costs. As for tax impacts, stocks are taxed at the same rate as your other income unless they decide to renew the law on lowering taxes on stocks that you hold for one full year.

The bottom 5 were listed on a site claiming those 5 were the five most popular ETF's by volume. Every portfolio I have created so far with this system beat out everything I have compared them to so far. I put my portfolio up against 10 measurements, and that's what you complain about? How many people do you know that would even dare to compare a system against 10 other performances all at the same time?

Stocks are bought by investing as near the same amount in each one as you can, of course. Only an idiot would try to weight a portfolio by shares instead of by dollar amount.

And no, I don't do international stocks. Ever.

And obviously, I happen to be the most educated person here when it comes to value investing.


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 Post subject: Re: Stock Portfolio
PostPosted: Thu Nov 08, 2012 12:06 pm 

Joined: Fri May 04, 2007 8:14 pm
Posts: 1976
Matthew Clinger wrote:
And obviously, I happen to be the most educated person here when it comes to value investing.

You are like a eunuch in a harem; you know how it's done, you've seen it done every day, but you're unable to do it yourself.


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 Post subject: Re: Stock Portfolio
PostPosted: Thu Nov 08, 2012 12:12 pm 

Joined: Mon Nov 01, 2010 5:15 pm
Posts: 1213
Matthew Clinger wrote:
And no, I don't do international stocks. Ever.


Quote:
And obviously, I happen to be the most educated person here when it comes to value investing.

I tried-n-true value investor will buy stock *anywhere & everywhere* if he sees value in it. Obviously your "education" is still a work in progress.


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 Post subject: Re: Stock Portfolio
PostPosted: Thu Nov 08, 2012 12:34 pm 

Joined: Wed Nov 07, 2012 6:21 am
Posts: 149
Lots of people see the value of investing in Brazil. It doesn't mean that they are willing to pay the outrageous fees that their government demands of foreign investors who want to invest there.

Value is relative and there's more than one type of value when it comes to choosing where you'll invest your money. As for me, I'm sticking to the USA.


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 Post subject: Re: Stock Portfolio
PostPosted: Thu Nov 08, 2012 1:32 pm 

Joined: Fri May 04, 2012 2:23 pm
Posts: 818
Matthew Clinger wrote:

Stocks are bought by investing as near the same amount in each one as you can, of course. Only an idiot would try to weight a portfolio by shares instead of by dollar amount.

And no, I don't do international stocks. Ever.



Interesting. So you'd buy all those stocks in equal proportion? That's your recommendation? I figured you'd want to at least spread out the risk a bit by industry. You have energy stocks, financials and a different number of each. So then, if you do as you suggest, you are tilted more towards other industries? Of course, there is no science to it b/c you don't really know anything about any of these companies. Sure, we can all spout off of what is on morningstar, but you know nothing about them....

The international thing is a bit short sighted, no?

BTW, I never suggested to buy in equal share amounts, just that you lack a methodology of diversifying across industries.

_________________
Bichon Frise

"If you only have 1 year to live, move to Penn...as it will seem like an eternity."


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 Post subject: Re: Stock Portfolio
PostPosted: Thu Nov 08, 2012 2:28 pm 

Joined: Wed Nov 07, 2012 6:21 am
Posts: 149
My portfolios come up with the stocks that are currently the most under-valued from a value investing perspective. Yes, I know that my stock selection is heavily tilted toward the Financial sector. There's not much I can do about that as 701 out of the 2755 symbols that were left after my initial cut (those lacking too much data or valued under 200 million market cap were tossed out) were from the financial sector, meaning that more than 1 out of 4 stocks was from that sector. Yes, I know that 6 of my 13 picks are from the financial sector. Believe me, my last round of modifications to my system tried to cut back the impact of the financial sector by making it harder than any other sector I use to send a stock to the list. Unfortunately, the financial sector still tends to overweight itself in sending stocks to the portfolio. If I went as easy on the financial sector as I did on other sectors, I would have 7 more financial stocks in this portfolio. Some people will try to find the best company operating in a specific industry to invest in for, but I am interested in the underlying values of a stock. You probably noted that there are 4 life insurance companies there along with both companies from the healthcare sector having to do with health care plans.

As for international stocks, you should know the market you are getting into as well as you can before you get into it. Besides that, there is the issue of getting reliable data. I have tried a whole bunch of different services in order to find the one that provides the best data and if I didn't exclude the foreign stocks from my search, I'd only end up with a list that was about 16% bigger than what I previously had. So even if I were inclined to select foreign stocks, my supply of good data on foreign stocks is quite limited.


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 Post subject: Re: Stock Portfolio
PostPosted: Thu Nov 08, 2012 2:52 pm 

Joined: Wed Nov 07, 2012 6:21 am
Posts: 149
And yes, there are whole sectors that I avoid. In fact, the only sector that I do not avoid that did not have something to send to the list has been the utilities sector, which has not had a single pick from any of the 90 or so stocks that generally make up that group since I started using my formulas. This might have something to do with the fact that generally about 75%+ of the sector is missing one of the key data points that I require of any stock that makes it onto my list. I don't choose stocks from sectors that I consider to be under-performers over the long-term or from the one sector that is excessively resistant to providing consistent results above its own sector (even if the long-term results are good). So yes, my portfolios will not be as "balanced" as the market in terms of different sectors and industries allowed in.

That might actually be an interesting experiment to do sometime, to apply balancing the sectors to my portfolios. Maybe I'll try that out next week sometime.

However, my current system is based totally on the individual companies, believing that they are all worthy picks after having made it through the gauntlet. There are 7 main reasons that stocks are generally eliminated from being picked for my portfolios. Rarely, one of the other couple reasons (having to do with the news for the company such as a federal investigation for fraud, etc) will eliminate a stock from the list, but that's rare. So, generally, stocks just have to pass 7 conditions I have set to make it into the portfolio and the formulas I have created constitute just 1 of these conditions.


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 Post subject: Re: Stock Portfolio
PostPosted: Thu Nov 08, 2012 3:58 pm 

Joined: Fri May 04, 2012 2:23 pm
Posts: 818
A lot of bark for not a lot of information.

Below is a list of everything you have brought to the table to discuss "value" investing:

_________________
Bichon Frise

"If you only have 1 year to live, move to Penn...as it will seem like an eternity."


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 Post subject: Re: Stock Portfolio
PostPosted: Thu Nov 08, 2012 4:11 pm 

Joined: Wed Nov 07, 2012 6:21 am
Posts: 149
That you have missed the information I have presented here and there or simply left it out doesn't surprise me. I almost feel like I have to speak like I would to a kid 5 years old in order to pass any information to you. There has been information posted, no matter how much you may consider it to be of limited worth in this forum. To say that it might not be that helpful to you or that it is a small amount compared to the larger amount of information available to me would be accurate. However, if you can't remember anything I have posted here in regards to value investing, is there any point to this? If you want me to teach you value investing using generalities, I am willing to do that. If you want a private showing of all that goes into me making one of my portfolios, that's also possible. Just what information is it that you want?


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 Post subject: Re: Stock Portfolio
PostPosted: Thu Nov 08, 2012 4:43 pm 
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Joined: Wed Sep 23, 2009 9:01 am
Posts: 5399
Ok, Matthew, I'll humor you. You have indeed picked a risky portfolio. But you yourself said it is designed to be held for a year. I pretended I bought equal amounts of your stocks at the close today. Well see what has done better in 1 year, your portfolio or VTI. I considered trading commissions of $9.95 per lot.


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 Post subject: Re: Stock Portfolio
PostPosted: Thu Nov 08, 2012 5:16 pm 

Joined: Mon Feb 07, 2011 6:33 pm
Posts: 1164
Location: Illinois
DoingHomework wrote:
Ok, Matthew, I'll humor you. You have indeed picked a risky portfolio. But you yourself said it is designed to be held for a year. I pretended I bought equal amounts of your stocks at the close today. Well see what has done better in 1 year, your portfolio or VTI. I considered trading commissions of $9.95 per lot.

Please post updates at least monthly.


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