My 2016 Challenge

[muss1]

Hi all,

I have set myself a challenge this year. Aside from my other long term investing activity I will invest $20,000 and see what I can turn it into by this time next year.

I am documenting my progress and decisions on a blog at the following address:
http://20kstockproject.blogspot.co.nz

I hope it is of interest to some - please comment etc as the feedback will make it all the more useful!

is anyone doing anything similar?

cheers
muss1

[Lewylewylewy]

Sort of! I spread 10k across a bunch of companies that interest me for long term (never sell) investments in order to get a minimum holding. Then I'm using $50k play money to buy shares, leaving the profit in my never sell investments.

The plan is to end the year with a bunch of extra shares and $50k, the $10k original investment will be chalked up as a loss / perma-investment.

Not the best way to invest by any means (pretty stupid, actually), but just a bit of fun :)

PS:I left you a comment on your blog but don't think it worked. I recommend looking at SCL and THL because they're likely to go up at the end of February, making them a good short term investment for your game. DYOR, JMO, etc.

GOOD LUCK!

[muss1]

Hi Lewy,

Thanks for checking it out. I will add SCL and THL to my list of companies to look at. Your comment didn't show, any idea what went wrong? Short term rerates will be key to my philosophy, although the companies will still need good long term prospects. Interesting philosophy you've set up yourself. I traditionally buy and hold, but decided to do the one year timeframe to add a bit of spice.

Good luck

[muss1]

Well I unexpectedly completed my first full position today. Mobile Embrace is the company (ASX:MBE). I had an order in not expecting to be filled after a strong opening but it was.

I made a few posts today as I had the day off and was able to do some research (while watching a good black caps win). I won't always have the time to post so much, but hopefully a few times a week.

[muss1]

I considered investing in Empired (ASX:EPD) after the recent lowered guidance and subsequent sell-off. I have added my brief reasons for decided not to to the blog.

[muss1]

Initiated a position in TFS Corporation (ASX:TFC) today. I believe it's fundamentally undervalued, although it is a long term play. I've written a couple of posts about it:

http://20kstockproject.blogspot.co.nz

[Lewylewylewy]

Are you just going to be doing the ASX?

[muss1]

I'm looking at both the ASX and NZX. Out of the stocks I am already monitoring the ones on the ASX have presented better opportunities. The NZX stocks I am currently monitoring are all more fully valued presently. I am currently building a list of companies that I think are worth further investigation which will include both exchanges

[muss1]

No new companies to report, but I've added a couple of posts. Namely, why I haven't invested in XPD Soccer Gear, and a theory on TFC.

[JBmurc]

So you are Trading the 20k over the year holding round 4 shares at a time ?? ..or investing ?

[muss1]

Investing. Only in companies that I think are undervalued and have potential for a rerate over the year. I am using some TA to time entries and I will consider exiting positions if a company becomes fully valued.

So there is an element of trading, but all picks will be fundamentally undervalued companies. One year is not a long investing horizon so I have to be very selective. If enough things are stacked in my favour I should get the rerates I need

[muss1]

Prophecy is tempting and looks ready for its next leg up.

http://20kstockproject.blogspot.co.nz/

[Lewylewylewy]

...

PS:I left you a comment on your blog but don't think it worked. I recommend looking at SCL and THL because they're likely to go up at the end of February, making them a good short term investment for your game. DYOR, JMO, etc.

GOOD LUCK!

Bet you're wishing you took my THL tip ;)

You might not be too late on the SCL's one if you can get in for less than $2.30...

[muss1]

Time will tell! I had a brief look at the two. I wasn't quite comfortable with the rerate potential - although they look like they could be solid long term growers. So don't think they quite fitted with what I needed with my relatively short time frame.

[muss1]

Mobile a Embrace reported initial HY results yesterday. I've added my thoughts to the blog

[muss1]

Prophecy international is becoming irresistible and looking like it might become my third position. Brief thoughts added to the blog.

http://20kstockproject.blogspot.com/2016/02/prophecy-international-is-looking-like.html (http://20kstockproject.blogspot.com/2016/02/prophecy-international-is-looking-like.html)

[muss1]

Entered Prophecy yesterday after another big drop. Fundamentals are great. Sentiment isn't, so I've taken the opportunity presented. Further drops certainly aren't out of the question, but great companies at cheap valuations are too good to pass up.

More on the blog

[winner69]

Good stuff muss1

How much in profit are you at the moment

[muss1]

I'm in the red by ~5% at the moment I think (I typically don't count my chickens). Given the volatility i'm pretty happy with how things are holding up. Each company had taken a significant hit before I entered, so will see how they hold up short term. Will update the portfolio snapshot on the blog now I've added a new position.

[muss1]

I'm in the red by ~5% at the moment I think (I typically don't count my chickens). Given the volatility i'm pretty happy with how things are holding up. Each company had taken a significant hit before I entered, so will see how they hold up short term. Will update the portfolio snapshot on the blog now I've added a new position.

Down 6% on the purchase value, or $400.

[muss1]

Just for you winner:

Portfolio at close today

http://20kstockproject.blogspot.com/2016/02/the-portfolio.html (http://20kstockproject.blogspot.com/2016/02/the-portfolio.html)

[JBmurc]

Did you have a goal in mind ...aka as a investor I would think 20-30% would be a great outcome ....for me as a trader 100% p.a so far It's looking good up round 30% so far for 2016

[muss1]

Did you have a goal in mind ...aka as a investor I would think 20-30% would be a great outcome ....for me as a trader 100% p.a so far It's looking good up round 30% so far for 2016

Hi JBmurc, I don't have a specific goal in mind as such. However, I am picking companies that I can see rerating 50%+ within the year. But due to the nature of my selections being long term prospects, I am realistic as mr market may decide to oblige next year instead. As you say 20-30% would be great, but hopefully I can get the rerates I'm targeting and get a bit more.

[noodles]

Well I unexpectedly completed my first full position today. Mobile Embrace is the company (ASX:MBE). I had an order in not expecting to be filled after a strong opening but it was.

I made a few posts today as I had the day off and was able to do some research (while watching a good black caps win). I won't always have the time to post so much, but hopefully a few times a week.
Muss1, You are getting some attention in the twittersphere.
https://twitter.com/shareideaasx/status/700151655304601602

[muss1]

Muss1, You are getting some attention in the twittersphere.
https://twitter.com/shareideaasx/status/700151655304601602

Thanks noodles - attacked on Twitter and I didn't even know! Luckily someone has gone into bat for me and corrected Claude's NPAT comment!

[muss1]

Latest update:

http://20kstockproject.blogspot.co.nz/?m=0

[Longhaul]

Hi muss1, just wondering if you are using TA at all?

[muss1]

Hi muss1, just wondering if you are using TA at all?

Hi longhaul, yes and no. I understand some basic TA and will use it to try and time entries, but that is only once I am convinced it's a buy based on FA. If I see a great opportunity based on FA I won't necessarily worry about the TA. For example a large intraday drop that provides good buying. This happened with PRO recently when I bought. It might go lower (it did today) so short term i am happy to ride it out.

After all, I am a long term invester at heart who is happy to ride out price fluctuations with good companies. This isn't fully conducive to a 1 year timeframe obviously, but with all buys I see enough value a year out.

[Longhaul]

Hi muss1, sounds good.

I only ask, since I looked at your blog post about Prophecy and had a look at the chart. I too think there's a real sweet spot using FA first, and TA to time your entry and exits.

In this case, it seems to be in a downtrend right now, or at least little sign of a turnaround. http://i.imgur.com/NnMDVQO.jpg

Did you consider waiting to buy when an uptrend was confirmed? Buying into downtrends puts you on the back foot from the outset. Unfortunately I've learned the hard way!

Note: I'm just trying to figure this stuff out too, but not investing for long term, just trading at the moment.

[muss1]

You're right - and yep I considered waiting for a turnaround. However, this is a company that has such high growth and a fair valuation that I see the SP correcting itself easily as announcements are released over the year. A case of "I'm very happy with the valuation and future prospects and would rather be in than miss out". I may even do the same again and buy my next parcel very soon.

I know it's not the best method, but I am trusting the FA completely on this one. If I'm wrong, I'm wrong anyway. If (when) the buyers show up this thing could move quickly and I'd like to have my position sorted. I know it's a bit muddled but I'm a long term FA invester at heart and can't resist a good deal when it's available.

I'll be writing an update on Prophecy in the next few days as I'm very happy with the announcement.

[muss1]

PS Longhaul, I'd be interested in your learning TA journey as it's something I do plan on getting into further

[muss1]

Latest update. My thoughts on Prophecy international and TFS Corporstions half year results. And some roller coaster share prices to boot.

http://20kstockproject.blogspot.com/2016/02/prophecy-international-and-tfs.html

[muss1]

Portfolio update:

http://20kstockproject.blogspot.com/2016/03/the-portfolio-as-at-01032016.html

[Ascend]

What's the logic of sitting in so much cash?

[muss1]

Hi Ascend,

Cash isn't part of the plan. I'm looking into opportunities all the time, but I'm trying to avoid jumping in just because I don't want to have a pile of cash. It's counterproductive to my year long timeframe, but so is jumping in to a company just because.

Cheers

[JBmurc]

Hi Ascend,

Cash isn't part of the plan. I'm looking into opportunities all the time, but I'm trying to avoid jumping in just because I don't want to have a pile of cash. It's counterproductive to my year long timeframe, but so is jumping in to a company just because.

Cheers

Missing out on some huge rebounds in the ASX Resources sector last 60-70days----- FMG 100%+,AGO BHP 20%+ , OSH,WPL 20%+ ,,,,as they say be greedy while others are fearful >>>

[muss1]

Missing out on some huge rebounds in the ASX Resources sector last 60-70days----- FMG 100%+,AGO BHP 20%+ , OSH,WPL 20%+ ,,,,as they say be greedy while others are fearful >>>

Yeah I'm tossing up whether to dabble in resources for this portfolio. Have bought in my main portfolio

[JBmurc]

I would recommend MGX ...give you a good safety net with 31cps in cash and now with the I.O price higher a profitable mining operation ,,,SP closed @21c ....

[Joshuatree]

FMG -Vale alliance has put a rocket under FMG price. But are these gains ultra short lived(says he who didn't buy in:) Getting off before that no exit tunnel if things do reverse; just be nimble out there,good luck.

[muss1]

The problem I have with resources for this portfolio is that if you're wrong about the commodity you could be waiting years for the turnaround. No matter how carefully you select a cashed up, low debt operator, that only maximises the chance they won't go out of business before the commodity cycle turns up, not the short term SP performance.

I can wait that out in my main portfolio but it'll kill my one year horizon. However, there are some juicy companies on offer... Still trying to decide

[JBmurc]

Guess depends on your faith in the world still needing commodities in bulk anymore(*esp after a record crash already) ..and if they don't then world economies truly are in BIG trouble...GFC#2

During the last GFC I held NZO at the time they were very cashed up and the market didn't smash them anywhere as bad as the rest of the market ...

then while many good companies were at rock bottom prices I took my funds from NZO and loaded up ....round a year later I had posted a 123% av. gain across the portfolio >>> my best Yr on Yr result

Too me MGX is another NZO ...if the market does look very likely to tip I'll be shifting my funds there...as in Deflation CASH - GOLD etc rule

[muss1]

I have faith the world needs commodities, but I have no faith in perfectly timing the turnaround in the cycle. As I said above, I've gone in on the assumed bottom in my main portfolio, but that's because I've chosen companies that have the ability to ride out continued subdued commodity prices If required. Their SPs will take a big hit though, and that's what is putting me off for this portfolio.

I agree with your philosophy completely though, it's a great opportunity and one that doesn't come around every year. But will it be this year or next year when the share prices reap the rewards

[muss1]

It's been a while since I updated the blog, but I'm working away in the background.

I sold TFC today. I'm also close to a new purchase or two.

http://20kstockproject.blogspot.co.nz/2016/03/closed-position-in-tfs-corporation.html

[muss1]

Latest portfolio update. I recently purchased Adacel technologies, but haven't had time to write about it yet.

http://20kstockproject.blogspot.com/2016/03/the-portfolio-as-at-22032016.html

[JBmurc]

The Best gains I've found is the bounce from FEAR in a sector .... like we seen from the GOLD PM sector last year >> Iron ore this year and OIL &Gas of late but still very much in FEAR ....so imho O&G is one well worth keeping an eye on ....then of course Base metals will rebound likely further out

As we know the market is all about FEAR of losing capital and GREED of missing out..... time it right and you are rewarded

disc - yes I do focus on the resources Energy sectors .....but one could put the same idea across their preferred market

[muss1]

Thanks JB. All positions I've initiated in this portfolio came off the back of significant drops in SP. I enjoy buying when others are fearing the worst, so I think we are on the same page.

I am admittedly a novice when it comes to resources. I recently bought into a debt free cashed up gold miner/explorer (my horizon is long term so I waited for the breakout of the last few years downtrend before getting in). I've been watching the sector for years waiting for a turnaround in the gold price.

I'm looking into other resources too, so I'll see how I get on. As I said I'm still learning about the sector so bound to make some mistakes. From what I see the key things are no debt and cash and the ability for the company to survive if the commodity price remains subdued.

Do you usually focus on the smaller miners?

[Lewylewylewy]

Bet you're wishing you took my THL tip ;)

You might not be too late on the SCL's one if you can get in for less than $2.30...

I think waiting for a little fear drop might be good, but there's word of lots of Chinese trying to get their money out and about. The thing to remember about shares is that you can't lose anything by not investing, but investing when you're certain will almost certainly give results.

NZX:VHP are interesting at the right price. Also NZX:FHP @ < $10

[JBmurc]

Thanks JB. All positions I've initiated in this portfolio came off the back of significant drops in SP. I enjoy buying when others are fearing the worst, so I think we are on the same page.

I am admittedly a novice when it comes to resources. I recently bought into a debt free cashed up gold miner/explorer (my horizon is long term so I waited for the breakout of the last few years downtrend before getting in). I've been watching the sector for years waiting for a turnaround in the gold price.

I'm looking into other resources too, so I'll see how I get on. As I said I'm still learning about the sector so bound to make some mistakes. From what I see the key things are no debt and cash and the ability for the company to survive if the commodity price remains subdued.

Do you usually focus on the smaller miners?

Yes mostly the smaller end of town sub 100mill ....but that's me looking for muti-baggers ... now and again I'll have play in the bigger caps
STO,NCM etc ...more so swing trade

[muss1]

Hi all, sorry it's been so long for those following, but here's an update. A few new purchases.

http://20kstockproject.blogspot.com/2016/05/the-portfolio-as-at-02052016.html

[muss1]

The portfolio is complete. In an unplanned way, but when value presented itself I had to act.

http://20kstockproject.blogspot.com/2016/05/portfolio-complete.html

[JBmurc]

11% not bad going your be hoping to see that rise some before the years out

[muss1]

Cheers JB. Things actually changed quite substantially after that update due to some (seemingly) negative news from PRO. I saw it as a good buying opportunity so have skewed the balance of the portfolio somewhat.

Anyway, here's the final (for now) portfolio:
http://20kstockproject.blogspot.com/2016/05/portfolio-as-at-90516.html

[muss1]

Latest update:

http://20kstockproject.blogspot.com/2016/07/portfolio-update.html

[muss1]

Plus some thoughts on paper currency and gold:
http://20kstockproject.blogspot.com/2016/07/the-end-of-paper-currency.html

[muss1]

Latest update:

http://20kstockproject.blogspot.com/2016/07/portfolio-update-bought-moy.html

[kelfy]

Sort of! I spread 10k across a bunch of companies that interest me for long term (never sell) investments in order to get a minimum holding. Then I'm using $50k play money to buy shares, leaving the profit in my never sell investments.

The plan is to end the year with a bunch of extra shares and $50k, the $10k original investment will be chalked up as a loss / perma-investment.

Not the best way to invest by any means (pretty stupid, actually), but just a bit of fun :)

PS:I left you a comment on your blog but don't think it worked. I recommend looking at SCL and THL because they're likely to go up at the end of February, making them a good short term investment for your game. DYOR, JMO, etc.

GOOD LUCK!


Awesome. Thank you so much for your recommendation on SCL & THL. It just great :)

[muss1]

Latest update:

http://20kstockproject.blogspot.com/2016/08/portfolio-update-as-at-28082016.html

[JBmurc]

Good to see you getting on board MGX was always a no brainer ....Should have shifted my NKP funds into MGX long ago ....could have been now shifting back with 50%-60% gain plus buying NKP lower .......

[muss1]

Yeah I potentially left it too late for this portfolio. I still like the company and it should get another rerate in due course. Just wondering whether I could use the money more productively elsewhere given I've got 5 months left. A few options up my sleeve

[muss1]

Swapped MGX for WPG. Nothing against MGX (still hold in my main portfolio), but I see more immediate upside in WPG. And with the year ticking away its immediate upside that wins in this case.

[Well Endowed]

good work Muss, had been looking at doing something like this (just wasn't organised enough!).

Might start something similar to begin 2017

[muss1]

Thanks mate. No need to start at the beginning of the year - I started towards the end of January as it was a bit easier to get organised then

[winner69]

That MBE must frustrate the hell out of you

Gone nowhere for the best part of 2 years now

So much promise but ......has time passed it by

Still follow as a 10 bagger once

[stoploss]

That MBE must frustrate the hell out of you

Gone nowhere for the best part of 2 years now

So much promise but ......has time passed it by

Still follow as a 10 bagger once

If it doesn't frustrate muss1 it certainly frustrates me . Still think there is huge potential from here , time will tell.

[muss1]

That MBE must frustrate the hell out of you

Gone nowhere for the best part of 2 years now

So much promise but ......has time passed it by

Still follow as a 10 bagger once

Very frustrating! But I am patient and will continue to hold. Even though the SP has gone nowhere the business itself has strengthened which is the important part short term. I like the growth they saw in the UK C-billing last year, early signs that they could replicate what they've done in Aus. They are spending a lot to grow aggressively... We will see what happens

[muss1]

http://20kstockproject.blogspot.co.nz/2016/10/updatefrm.html?m=1

Genersl Update and FRM thoughts. The FRM AGM is today so I've put this up beforehand... time will tell

[levin123]

Thanks Muss, interesting read.

Would be interested in a portfolio value update?

[JBmurc]

I see MGX has had a nice breakout north should well see high 30's before the years out

[muss1]

I'll post an update this evening when I have the tools. Not looking too flash at the moment!

Yep MGX has really kicked again, hopefully made the right decision choosing WPG instead. Hold both in my other portfolio regardless

[muss1]

Portfolio update link below. Not too flash, but I have a feeling the short term bottoms may be in and we could see a turn.

http://20kstockproject.blogspot.co.nz/2016/10/portfolio-as-at-26102016.html

[JBmurc]

I do like WPG but rather have IRC in my portfolio personal but I will be putting WPG on the watchlist ...the only minor negative I could pick out from my quick look over WPG was there production outlook 150koz production from 83koz reserves and higher AISC $1,360/oz AUD.... with 4.6g/t would have be targeting lower AISC ....but I do see movement downwards to $1100/oz 2019 (last year of planned production)

,,,,hope it turns around for you and you see a good bounce

[muss1]

Latest update:
http://20kstockproject.blogspot.co.nz/2016/11/grit-your-teeth-and-close-your-eyes.html

[muss1]

My thoughts on MBE's announcement today. I am currently developing a website that will provide a better platform than the current hacked together blog layout. Hopefully this will be enjoyed by others when I release it in the coming weeks.

http://20kstockproject.blogspot.co.nz/2016/11/mobile-embrace-drops-bomb.html

[muss1]

Hi all,

I said I was working on a website and I am pleased to announce it is here! It is currently a more user friendly version of the blog, but over time I will develop it into something more. Please check it out and share with your mates. If you want to sign-up to receive updates when I post them it'd be much appreciated too.

Not the greatest time to do this considering the current state of the portfolio, but it's a long term game.

http://www.thestockpickerau.com

[levin123]

Thanks muss, have been following your blog with interest. Great analysis and write ups. Keep it up

[muss1]

Thanks levin, appreciate it.

[muss1]

Article on Kip McGrath I posted a couple of days ago. If you want to be notified when I post a new article please sign up to the subscriber list on the home page- you won't get spammed don't worry!

http://www.thestockpickerau.com/single-post/2016/11/27/Investing-in-Education---Kip-McGrath-Limited

[muss1]

Also latest update on Prophecy International:

http://www.thestockpickerau.com/single-post/2016/11/29/Prophecy-International---a-Turning-Point

[muss1]

Article on Global Health

http://www.thestockpickerau.com/single-post/2016/12/06/Defensive-Growth---Global-Health-Limited

[muss1]

Article on touchcorp/afterpay:

http://www.thestockpickerau.com/single-post/2016/12/27/Touchcorp-and-Afterpay---Wheres-the-Value

[muss1]

Article on Farm Pride Foods:
http://www.thestockpickerau.com/single-post/2016/12/15/From-Grain-to-Gold---Investing-in-Eggs

[JBmurc]

Brilliant work on the webpage muss1 very professential ...wish I had the skills .....

hope your joining the 2017 ASX comp ... cut off date 15th ... also if you want to be in to win the major prizes a small donation $5 min into the account number I provided on the thread .. think i got lucky this year on the last trading day saving me

[muss1]

Cheers JB.

I have entered my picks for 2017, hopefully do better than 2016... will make a donation once I'm back from holiday. Well done on the win

[muss1]

Part two of my Afterpay/Touchcorp article published today:
http://www.thestockpickerau.com/single-post/2017/01/17/Afterpay-and-Touchcorp---The-Conclusion

Also, for those of you Facebookers I've created a page where updates will be posted - please follow it if you are that way inclined - it'd be much appreciated!
https://www.facebook.com/thestockpickerau/

[Joshuatree]

So what was your 2016 return muss, how did it go?

[muss1]

The official end date (1 year) is Jan 29 so I'll do the tally then. The answer is poorly though!

It's been a worthwhile exercise though and hopefully I've created something useful going forward with the new website

[muss1]

Joshuatree I put you wrong - the start date was 22 January 2016.

Therefore, here is the final tally: my total return for the year for the portfolio was -9.5%.

I am pleasantly surprised by this given I took two pretty big hits on PRO and MBE. I still hold these company and like their prospects going forward.

I like the current portfolio still and would buy most stocks at current valuations. So could be interesting seeing how this year goes. I will keep the same portfolio and post updates from time to time.

I've now turned this project into something long term by starting The Stock Picker. I hope you will continue to follow my updates on there. Please like the page on Facebook if you are interested and you'll get all the updates: https://www.facebook.com/thestockpickerau/

If you aren't on Facebook you can access the website directly: www.thestockpickerau.com and subscribe to receive email updates if you like.

As an added incentive I've started a competition for February. Pick the best performing stock over earnings season and win $100. Follow the link and rules here: https://www.facebook.com/thestockpickerau/photos/a.1823449554590490.1073741828.1816933571908755/1823451681256944/?type=3&comment_id=1824012624534183&force_theater=true&ref=notif&notif_t=photo_comment&notif_id=1485124274665592

If that link doesn't work you can find it pretty easily on the Facebook page. I'd really appreciate your support as it is tricky to grow a network.

Anyway, thank you all for following and good luck for 2017 and beyond!