Second pin stuck in the newspaper

As announced in the previous blog it was time to put another pin in the newspaper in order to select another holding for the monkey portfolio. We used a blue colour pen instead of a pin and here is where the pen landed in the FT (Financial Times) newspaper…

We needed a holding with the main listing outside of US in order to diversify globally and Lloyds Bank ticked that box. In the first holding in the monkey portfolio we added a position value of about $5000 or about 4% of the intended start portfolio. Since the first holding Cisco is under water/down we are allowed to select a position value of about $7500 or 6% of the intended start portfolio according to the “no capital gain taxes growth investment plan” in the book “beat the stock market casino”. Have you bought the book yet on Amazon? So we do not market time, but portfolio time if that makes sense. It is a good thing we do not market time. The S&P 500 is at a record high as the FED is basically conducting QE4 (quantitative easing round 4). The FED got scared after the overnight repo rate spiked to as high as 10% in September 2019. The FED has also lowered interest rates in 2019. With their actions in 2019 the FED basically admitted that Mr. Trump was right on this one and that the FED had killed the global economy by hiking rates faster than the US economy could handle in 2017 and in 2018. Anyway we do not market time, so we do not need to worry about any of that nonsense. 

So since the cray on portfolio follows where the monkey portfolio leads, we added a holding with the main listing in the UK for the cray on portfolio as well. This second holding for the cray on portfolio had a target of about $7500 position value. The first choice to add to the cray on portfolio was Greggs (the UK’s favourite “restaurant”). Sadly the Stockrover website does not know the stock Greggs and we needed a stock that could be tracked on a portfolio tracking website and the best portfolio tracking websites are (still) in the US. So the cray on portfolio added the stock Ashtead Group instead. To keep the tracking easy in $ we added the US ADR line of both Lloyds (LYG) and Ashtead (ASHTY). In round 1 we could not invest the entire $5000 into the stock MSCI, because it was trading at a high price and we rounded down the full number of shares we could buy and put the balance of the $5000 into cash. Cash skewed the results in the stockrover website a little so we will forget about cash from now on and just round down the full number of shares we can buy per position.  In round two in the cray on portfolio we emptied cash and added it to the $7500 so we could buy 60 shares of Ashtead. So the paper cray on portfolio added 60 shares of ASHTY at $126.20 yesterday for a value of $7572. The paper monkey portfolio added 2403 shares of LYG at $3.12 yesterday for a value of $7497. May the force be with Lloyds and Ashtead! Stay classy dear reader. Thanks for reading this blog. 

This blog is not a tip sheer or advice or a recommendation to buy, sell or hold any investment. The purpose of this blog is to sell the book “Beat the stock market casino” and expand on the book and is a marketing communication. Investors should form their own view and ideally talk about their view with an independent financial adviser before doing anything.

Update after 6 months of running the experiment....

First of all let’s be very clear about the purpose of these blogs. Clearly the aim is to promote and sell more of the book “Beat the stock market casino”. The tiny book is now available on Amazon. These blogs are not a tip sheet. The blogs are intended to dig deeper into the core of the book and show how one can build a retirement stock portfolio along the guidelines mentioned in the book without much difficulty and hopefully perfectly acceptable returns. As mentioned in the book evaluating performance takes a long time so only after about 7 years we can start drawing some conclusions on which of the paper trade portfolio’s has held its own versus the good old S&P 500 index. We are about 6 months after we started the experiment. 

What has happened in the last 6 months? 

The race to zero for commission rates when trading stocks continues. In the US Charles Schwab was the first big retail broker to copy paste Robin Hoods zero commission policy. In the UK Revolut entered the wonderful world of equities as well with a zero commission product. Another topic apparently is no FOMO (Fear of Missing out). Recession fears of no recession fears the recent new all time high by the S&P 500 has punished professional investors that were short or holding too much cash. FOMO only means your plan was stupid to start with so we have no interest in this concept. Much more interesting in our opinion is the FIRE (Financially Independent, Retire Early) concept.  Financial independence is having enough wealth such that you no longer have to work for money. Sign me up! One can get an income from labour, but in most places creating an income from capital is less hard work and the income can be subject to lower taxes on top of that. That is not to be sniffed at. 

Enough side tracking for now, let’s get back to the status of our experiment. One rule was; “One position will be added to both portfolios every 6 months on the basis of the "No Capital Gain Taxes growth investment plan" as described in the book.” So it is time to buy a newspaper tomorrow and put a pin in the stock prices page of the paper again and select an addition to the monkey portfolio. How has the monkey portfolio done in the last 6 months? Not great to be honest. Early days as mentioned to evaluate, but the dangers of a 1 stock portfolio have become clear in the monkey portfolio. Cisco has lost about 14.6% since the Monkey portfolio added the stock in May. Luckily Cisco pays dividends so the damage at portfolio level is less as the portfolio lost about 13.3%. Meanwhile the good old S&P 500 index is on fire and up 10.1% since May. So far the monkey is left behind in the dust. The tracking of the portfolio and the pictures below are courtesy of the StockRover website. 

How about the Cray On portfolio?

The Cray On portfolio has only one holding so far and the paper holding MSCI has done much better than Cisco. MSCI is up 16.8% since May. Inclusive of the tiny dividend MSCI is up about 17.4% since May. The Cray On portfolio also had $116 of un-invested cash so that will drag the performance down a little. Still the Cray On portfolio is nicely ahead of the S&P 500 index so far. Long may that continue….

The individual shares mentioned are just part of the experiment to dig deeper into how to implement the book “Beat the stock market casino” in the real world. Those stocks are not investment recommendations and these blogs are not a tip-sheet. If you want to play in the stock market, please talk to an investment adviser to find out what suits your personal situation.

Game on between the Monkey and the Cray On portfolio's!!!

Experiments are the way to improve the world. Sadly because of an overkill of regulation experiments are getting rare in the financial industry. After all nobody wants to be accused of “experimenting with client money”. Also terrible regulation like MIFID II acts like a barrier of entry to the industry as the big boys and girls can afford to pay the army of legal and compliance people necessary to run an asset manager in the EU, but sadly if you are a small asset management start up you will be bankrupt within your first year trying to comply with all those regulations before you can start to make money. So here on this blog let’s run a paper investing experiment using a monkey style investment plan and a “Cray on” style portfolio investment plan taking from my book on Amazon “Beat the stock market casino”. The Monkey investment style can pick an investment first by putting a pin in the quotations page of the newspaper and the “Cray on” style portfolio then picks something in the same currency listing that it thinks might do better long term. So a couple of weeks ago I picked the first 2 investments. The pin in the newspaper “City A.M.” first was closest to some JP Morgan Indian mutual fund, but I had to bin that one because I could not track that investment on the web. Next pin hit the US stock Cisco, so the first paper investment for our experiment in the Monkey Portfolio was called Cisco. I invested the same $ amount in both portfolio’s and that means about 91 shares in Cisco Systems could have been bought and  tracked on the website www.stockrover.com. The current holdings for the Monkey Portfolio is just 91 shares in Cisco Systems at a $55.93 last makes a portfolio $ value of $5090. The Monkey Portfolio is slightly under water by $16. So far the Monkey Portfolio is a touch better than the S&P 500 since inception. Using the “Stockrover” website will allow for some charts etc. to check up on performance long term a little easier. Sadly the charts from “Stockrover” do not copy paste into Blogger so I am afraid I cannot show you what I see on “Stockrover” as visually pleasing as I had hoped.

Next up was the “Cray on” portfolio. I picked a small but powerful company called MSCI. If you create new ETF’s you need someone to create the benchmarks for you and pay the benchmark provider. Passive investing and ETF’s are continuing to become more popular and I do not see that change any time soon. So I think MSCI could have a “moat” and pricing power, two quite rare things in the financial industry. I could buy about 22 shares of MSCI before running out of cash if I wanted to invest an equal amount of money in Cisco and MSCI. Because MSCI traded at the high $200 plus  level , I was stuck with some un-invested cash in the “Cray on” portfolio as per below. $116 is in cash in the Cray On portfolio. MSCI’s stock made new 52 week highs last Friday and the position is showing a $298 paper profit. The total $ value for the Cray On portfolio is $5287 for value of 22 MSCI shares plus $116 makes a total of $5403. It is very early days and doesn’t say anything, but the “Cray On” portfolio so far is beating both the S&P 500 and the “Monkey Portfolio”.  June is clearly so far much better than the performance in May.

So it is now game on between the Monkey and the Cray on portfolio. May the best one win!

Clearly no recommendation is made here on what you should do. The value of shares and the income from them can go down and you may get back less than the amount invested. If you want to make an investment decision, please seek contact with a financial advisor first. As always when you read something assume the writer already has a position and is selling when you are buying…..

Beat the Stock Market Casino

Welcome to my blog. A special thanks to the visitors that bought the book "Beat the stock market casino". Here will appear blogs relating to the book and track to paper trading stock portfolio's inspired by the book. The 1st portfolio is called the "Monkey Portfolio" and stocks for that portfolio are literally picked by sticking pins in the financial page of the newspaper (I have ran out of darts and monkeys). The 2nd portfolio is called the "Crayon Portfolio and here I will pick stocks I like. I know the difference between just 2 portfolio's will not be statistically relevant, but I hope it will be fun. So 1 position will be added to both portfolio's every 6 months on the basis of the "No Capital Gain Taxes growth investment plan" as described in the book. Please come back to the website once in a while if you like the sound of that. The information on this website is background information about stock markets and does not constitute investment advice nor is it an invitation to make transactions. No recommendation is made, positive or negative, regarding what you should or shouldn’t do. It is up to you. Please remember, the value of shares and the income from them can sadly go down as well as up and you may get back less than the amount invested. I do not accept any liability for any wrong information or consequences about information here. If you want to make an investment decision, please seek contact with a financial adviser.