Hsbc Ftse250 Discussion Threads

[invisage] 09/3/2018 23:25

Yep. Think after Brexit we will see surge.

[nasdaqpat] 05/3/2018 09:42

Thx Rob...but we do have our moments of bickering on this thread, usually as a result of Invisage causing trouble. LOL!

[robfitz] 05/3/2018 08:42

Thanks Patrick, I have always liked looking at your analysis and it is good not to have to trawl through all the bickering that goes on elsewhere.

[nasdaqpat] 05/3/2018 08:37

Decided that we were too Long also so have reduced down to 69.4% (from 74.9%) albeit eliminated the remaining Short position in XT2D.

[invisage] 03/3/2018 22:48

I have about 36 holdings currently. I would say I am too long as Interest rates are a risk and they will keep going up...

[nasdaqpat] 03/3/2018 11:05

Thx for that comprehensive reply, Invisage.

I forgot that you held IMB as well and I also track that one... @ 2569p on 22 Feb it has declined (38.0%) from its 4146p ath as opposed to now (25.7%) for BATS (5643p:4193.5p) but I can understand why you persevered with a tobacco stock albeit IMB, as you say, has fared worse.

In fact, we have been holding BATS off and on for quite a while now so our average is effectively quite a bit worse than yours. However, I agree it is a magnet for Dividend Junkies and I will be playing this one on an Add & Reduce basis throughout the expected next Up Phase...whether we will hold through the next Phase correction will depend on, as you say, share price and fundamentals.

How many stocks are you now holding then?

[invisage] 03/3/2018 10:31

Pat

With BATS I sold on 27/6/2017 at £54.61 - This is a very good quality company but I sold to lock in the decent profits from the previous 8 months.

It is interesting that you ask about this stock as I bought this back in the last few days.

Nice yield, well covered, huge cash flow and margins and ROCE - Top top quality company that I intend to buy more if it keeps falling especially since it has good exposure to vapes and Emerging markets.

My buy price is £42.80 slightly underwater yes I know but this I don't mind as it is part of investing, hard to catch the bottom.

I don't hold shares forever but if BATS stayed at current price with current fundamentals for 10 years I would keep holding.

I have'nt done so well with IMB which I have held throughout the decline as you know it did not have the spectacular rally BAT's had last year, I have been adding to this on the way down as I think it too is high quality but not as good as BATS. IMB lacks a growth story, but still a decent business with high margins and cash flow at a cheap price. If I were a big tobacco company such as Japan Tobacco or Philip Morris I would takeover IMB and realize the efficiencies.

I do think you underestimate the value of dividends, if you just hold a decent stock for a few years or so say GSK with dividends reinvested overtime this can have fantastic returns as you would save in transaction costs.

I think that is broadly what Gateside does, he rarely seems to tinker with his portfolio.

Given where market valuations are I am focusing more on value stocks rather than racy growth stocks, value stocks have under performed a lot in recent years. We will get a big drop in markets at some point, in reality no one knows when so best to be exposed to the parts of the market with least risk of loss after all overtime markets go up over the long term and it is the long term we should all be investing a far as equities are concerned!

Neil Woodford has had a horrendous few years whereas Terry Smith has done very well, but at some point I suspect Neil will have his day again.

I personally don't think we will see a protracted bear market this year because there are no signs of a recession yet, but with the fed tightening and withdrawal of liquidity this will start to impact the markets at some point. If I felt there was going to be a recession I would be holding over 50% cash.

[nasdaqpat] 03/3/2018 09:59

Invisage,

Interested to know how you dealt with the likes of BATS which was in your portfolio last year. As a defensive share did you decide to retain it in your portfolio and, if so, did you reduce? If you got rid of it, at what price did you sell? Presumably, you have re-bought now so what is your average price going forward? Do you now intend to hold indefinitely or will you sell all or part if it puts in some kind of rally and at what price?

[invisage] 03/3/2018 09:12

My portfolio is similar performance to you pat as I was holding a lot of cash during the Feb correction.A loss is a loss though the ftse performing worse doesn't make me feel better at all.

[nasdaqpat] 03/3/2018 08:08

Well, I suppose there is about a 6/4 against chance that 24218 is a secondary base for DJI...it represents a (64.84%) give back of 23360:25800 and that seems plausible. That in turns mean that yesterday's 7063 has a similar chance of being the corrective low for FTSE.

At this stage, we have ended up with a diverse set of 48 Long companies which make up 74.9% of our portfolio. The rest consists of 21.9% in cash and a 3.2% holding in XT2D (S&P500 2x Inverse Tracker) which we will Add to when Up waves appear stretched. I am prepared to push the Longs up to c80.0% should there be further weakness in the coming weeks.

Overall, we are doing quite well (mainly thanks to our strong short position which peaked in January) and our portfolio is only (01.42%) down since the start of the year (including (01.26%) in the week just passed) as opposed to FTSE & FTSE250 which are off (08.04%) and (06.46%) respectively.

[nasdaqpat] 02/3/2018 16:29

Wow, Invisage!

I think that's about the most honest and straightforward sentence you've written on my threads. Keep it up!

[invisage] 02/3/2018 16:23

I too am very long this market now....i do feel nervous though...no idea where it's going but just think there is good value in some stocks

[nasdaqpat] 02/3/2018 16:14

Hi rob,

No real clue, I'm afraid!

DJI has already gone lower than my suggested target of c24292 with the earlier visit to 24233 which equates to a (64.22%) give back of 23360:25800. The Doodles have reacted badly to Trump's Tariff package and it is unclear how low this uncertainty will take American markets.

FTSE has extended its correction to 35 days with the visit to 7072 but that would be a good result if allowed to stand.

FWIW, I have moved our Longs Up to 74.6% of Portfolio (with just 3.2% Short) so I am hopeful that we are within a few percent of the lows and that markets will not degenerate into a Cyclical Bear.

[robfitz] 02/3/2018 15:13

Hi Patrick,

With today's drop adding to the losses where do you see the potential bottoms of these drops?

Appreciate your posts from the shadows ;-)

[nasdaqpat] 02/3/2018 07:56

No problem Gateside. Posting here helps me to crystallize my thinking so I'm not that bothered if there are only a small handful of readers.

Yesterday's steep American drop was apparently a reaction to Trump's tariffs package so FTSE may not get as hard hit as normal. In fact, if DJI's secondary base is c24292 then it only has c(01.12%) further to drop based on current futures of 24568...par for FTSE based on 7128.5 now has gone up to c7048 although I'll be surprised if FTSE keeps above 7k at the correction low point.

[gateside] 01/3/2018 21:28

Thanks for your thoughts on where you think the Markets are heading in the short term.

[nasdaqpat] 01/3/2018 16:15

DJI got close to my suggested c75.00% recovery target of c25803 by visiting 25800 on Tuesday (27 Feb) and now appears to be in the give back proper which should result in a secondary base building on the 23360 of 9 Feb. Impossible to say but a c(61.80%) give back of 23360:25800 leading to c24292 could be about right.

However, the rally after the last Phase correction by DJI in 2015 was a somewhat peculiar affair. It started out reasonably enough with a 50 day rally (2 Segments) worth 16.97% (15370:17978) but then proceeded to give back virtually all the gains with a 52 day decline to 15451. Maybe best ignored as European markets didn't help as they were engaged in cyclical Bear market runs.

Assuming c24292 for DJI then a par performance for FTSE would see it visit c6960.

[nasdaqpat] 21/2/2018 11:17

FTSE holding up quite well considering America appears to be now searching for a secondary base. DJI, e.g., ought to give back a significant amount of 23360:25432 before commencing a second PW Up...my guess would be c(65.00%) which comes out @ c24085.

That implies a further c(03.30%) off the current futures level of c24909 so a par performance for FTSE would result in c6992 which is quite a bit better than the c6876 I was envisaging.

[nasdaqpat] 19/2/2018 18:10

Washington's birthday so no change in America albeit futures a tad weaker :-

DJI~~~26617:23779:25294:23360~~(12.24%) Declined~~63.72% Recovered @ 25432~~05 Days
NDX~~~~7023:6370:6716:6164~~~~~(12.23%) Declined~~78.81% Recovered @ 6841~~05 Days
SPX~~~~2873:2593:2728:2533~~~~~(11.83%) Declined~~65.00% Recovered @ 2754~~05 Days
IXIC~~~7506:6825:7170:6631~~~~~(11.66%) Declined~~76.80% Recovered @ 7303~~05 Days


Japan recovery extended and initially DAX & MCX but not UKX :-

N225~~24129:21079:22354:20950~~(13.18%) Declined~~37.84% Recovered @ 22153~~03 Days
DAX~~~13597:12233:12651:12003~~(11.72%) Declined~~31.49% Recovered @ 12505~~06 Days
UKX~~~~7793:7079:7311:7073~~~~~(09.24%) Declined~~32.64% Recovered @ 7308~~~05 Days
MCX~~~20985:19125:19724:19166~~(08.86%) Declined~~35.70% Recovered @ 19789~~06 Days

[nasdaqpat] 18/2/2018 13:46

The next American Up Phase, which has probably already started, should last until August next whereupon there will likely be another (10.00%)+ correction. Then another Up Phase after which there is the possibility of a Cyclical Bear which should start sometime in mid 2019 followed by a further Cyclical Bull.

In short, I'll be slightly surprised if the current Secular Bull doesn't run through to late 2021 at least.

[invisage] 18/2/2018 06:51

It makes a lot of sense to deploy cash in corrections, as the rise following the correction are generally the best days in the markets.Some portfolios are up 5%+ the past week. Don't be surprised I'm near fully invested again.I will look to raise cash by selling into strength.We are in the late stage of this bull market so buy and pray doesn't work for me here.

[nasdaqpat] 17/2/2018 16:50

Didn't realise we were in a Bear market...moving swiftly along.

Cannot now see FTSE recovering more than about 40.00% of 7793:7073 before the expected second leg Down (probably more accurately a second Principal Wave (PW) Down) so next week's recovery target for FTSE is c7361 and it may not even get that high.

From that level, to reach c6876 will require a PW Down of c(06.59%) which is going to get very uncomfortable for Bulls. In fact, I am expecting our Longs to incur paper losses of c(10.00%) at the low point with only about +02.50% compensation from the short side.

Nevertheless, I hope I have learnt my lesson of the last couple of years in the disadvantages of being under invested in a Bull market and I want to be well positioned for the start of the next Up Phase which should see FTSE reach c8000 (not sure about timeframe).