Merchants Share Discussion Threads

[bluemango] 11/1/2021 14:28

Thanks Jeffian. Older and more careful now ...

And was nimble enough to get out of both STOB and PNN at a profit, having pocketed a few years' worth of generous dividends.

Mentioning IT's, I recommend a bit of diversification via Private Equity Trusts like PEY and SLPE; otherwise the duplication with same names cropping up in top Holdings of the main IT's means there's less diversification (when holding several) than you might imagine. PEY (Princess Private Equity) has been particularly good - it sensibly halved its dividend last year but is back up to full pre-Covid level again now. Has both a EUR and Sterling quote.

[jeffian] 11/1/2021 13:52

Hi, blue. I was so pleased to see your list of sensible investments, with no mention of speculative bluesky pharma stocks, I gave your #1158 a thumbs up! I am relatively new to this party but have been looking at IT's as a way to give me spread without having to research too many individual stocks. Bought after the March fall so quite happy but, like you, in the 'forever' portfolio for income.

[ctrader3] 11/1/2021 13:50

Dot-com bubble
From Wikipedia, the free encyclopedia


The NASDAQ Composite index spiked in the late 1990s and then fell sharply as a result of the dot-com bubble.


The dot-com bubble (also known as the dot-com boom, the tech bubble, and the Internet bubble) was a stock market bubble caused by excessive speculation of Internet-related companies in the late 1990s, a period of massive growth in the use and adoption of the Internet.

Between 1995 and its peak in March 2000, the Nasdaq Composite stock market index rose 400%, only to fall 78% from its peak by October 2002, giving up all its gains during the bubble. During the crash, many online shopping companies, such as Pets.com, Webvan, and Boo.com, as well as several communication companies, such as Worldcom, NorthPoint Communications, and Global Crossing, failed and shut down.
Some companies, such as Cisco, whose stock declined by 86%, Amazon.com, and Qualcomm, lost a large portion of their market capitalization but survived.

------------

until they run out of QE ride the Bronco, don't be
the one left holding the baby when/if history repeats.
maybe just maybe have a stop gain policy ?

[bluemango] 11/1/2021 13:40

#1160 I'm certainly not claiming 'brilliance'; simply suggesting that not everyone has inclination to do micro-management of their holdings. It's a balance depending on one's investing aims and experience - Zac's right in that overall long term return is more important than chasing yield at the expense of capital but sometimes needs a steady nerve to ride short term volatility.

[zac0_4] 11/1/2021 13:26

The latest podcast is now available on the Merchants Trust website. www.merchantstrust.co.uk/podcast

[zac0_4] 11/1/2021 13:24

No, I have no plans to add another REIT to my holdings. I'll probably look to consolidate my dividend paying holdings down from 8 to 4 Investment Trusts. I'll only carry out this exercise when my oil shares (Shell & BP!!) recover.

[panshanger1] 11/1/2021 12:49

Happy with my position here,didn't hit the bottom but decent entry point Merchants seem happy to support the dividend over the medium term and would be very reluctant to lose their dividend hero status having not cut it ( but increased it , every year )for 38 years. That is key for this IT Always keep an eye on the gearing though if it gets too high it can really amplify losses. As happened last year.

[ctrader3] 11/1/2021 12:36

ZAC will u be re-investing in an another REIT ?

[zac0_4] 11/1/2021 11:53

bluemango - I agree. Sometimes too much analysis simply complicates things. I have a mix of 22 holdings. 8 pay me dividends. The balance don't pay me anything. I simply take some capital for income on an annual basis, or when required.

The one overriding rule for me is that each holding must, over the long term, produce a positive return. I see little point in holding something that pays a high dividend but also reduces my capital.

I have no issue with selling at a loss if needs be. I cannot change the past only try to influence future returns. My largest recent loss has been my sale of New River REIT. Great dividend, until it was cut, but continuous capital erosion over a 3 year period. Looking at the graph I don't know why I didn't come to my senses years ago!

[bluemango] 11/1/2021 11:08

Sometimes these things can be over-analysed.

My aim is income whilst preserving capital in real terms. Have 19 different companies, a spread of IT's, private equity trusts and solid earners like AZN, BA., PHNX, ULVR. Couple of preference shares.

I first bought MRCH in 2016, topped up a couple of times since, and although it dipped in value over much of 2020 I'm now back to 12% profit overall and it's yielding 6.6% based on total cost.

I intend to hold this 'forever'.

[ctrader3] 11/1/2021 10:26

I bought a few more when they yielded 9% last year,
although at the time I thought I could have bought
the share at a better price if I waited.
as it turned out I bought near the low but
only because I was content with buying the yield.
of course I could have bought trusts that paid
little or no dividends and made a large capital
gain (with hindsight) but that's not in the plan.

[ctrader3] 11/1/2021 10:22

if u had bought near the low in 2009 let's
say 230p, last years dividend was 27.10p.
a yield on buying price of 11.7% which
should, next year, start to increase.
u have also made a capital gain but as
the share is a core holding, that's of
little interest, unless MRCH change their
dividend criteria.

[ctrader3] 11/1/2021 09:28

anyone clever/lucky enough to buy MRCH when it yielded 10%
and didn't sell any shares have now had all their capital returned.
if u had used the dividends to buy another high yielder u would
in a couple of years have all your capital returned also.
did I mention it now yields 12% for no capital invested ?
or that Mr. Market gave u another chance to buy at a
9% yield ?

[ctrader3] 11/1/2021 09:08

if u look back at the chart between the start of 2017 and the
market crash, u had made a capital gain of 15% in three years.
that's why yield is important to me, I don't intend to add
to my portfolio with new cash, so dividends gives me cash to
invest.
in a falling market the cash buys more shares.
no denying since the market crash the holders of similar
shares have done extremely well, that's assuming they
have took some cash off the table.
I reckon this will be looked back as the second dotcom bubble.
The worst words in the market "it will be different this time."
GL don't get left holding the baby.

[zac0_4] 10/1/2021 22:17

Superiorshares - not sure of the point you're trying to make. Why don't you produce a chart around your hypothetic investment case?

For me I tend to re-evaluate my holdings at year end. Nothing too fancy, I simply pose the question as to whether each holding will produce a reasonable, in my mind, overall return during the forthcoming calendar year. If I think it will then I stick with it. If not, then I sell and move on, unless there's a very good reason to continue to hold.

I'm confident that my overall return here will be double digit, 12 to 15%, during this calendar year. That I'm happy with. I'll review it again at the year end.

[wayo] 10/1/2021 17:01

SS don't think u have grasped the concept of trading so
maybe best u don't buy shares if u expect them to fall.
do some research on shorting ?

[superiorshares] 10/1/2021 16:33

I used to watch Bob the builder .
C trader could you do me a chart please . Hypothetically I put 20,000 in at £5.50
I believe in 5 years time the share price will be around 3 pound . I think the dividend will also be cut ?
If the dividend is increased as it has done for those decades . I think the share price will fall to around £1.75.

Also could people who are far brighter than me tell me please if MRCH has issued any shares since March 2019 . Thanks

[tim 3] 10/1/2021 16:09

Thanks ctrader for the Bob story.

Made me think about how much importance I put on market timing.

[zac0_4] 10/1/2021 14:14

ctrader3's story of Bob from an earlier post is demonstrated in the attached video on YouTube



copy & paste

Outlines the benefits of regular, long term investing. Maybe of interest to some.

[zac0_4] 10/1/2021 14:06

Gateside - good stuff. Thanks for that.

[gateside] 10/1/2021 13:48

Some brokers, Interactive Investor for instance have free regular investing. Choose your share or investment trust. Choose how much and a date for each month and there is no charge. So it can be cost effective to invest small amounts in shares as well as Funds.

[zac0_4] 10/1/2021 13:42

CT3 - I, personally, wouldn't get too hung up on dividend yield unless that's the means of income you prefer. If you're going to be invested for the long-term I'd pick a global growth fund. I'd invest every month without fail. I'd invest in the accumulation version of the fund. Over the long term you should do well.

The reason why I favour funds for this approach is the simple fact you can invest a relatively small amount, say £100, and it's still cost effective to do so. With an Investment Trust, or individual share, you really need to be investing an absolute minimum of £500 or the trading costs and stamp duty add up to make it not cost effective in the first place.

3 global funds that have delivered good returns for me are: Rathbone Global Opps S class; LF Blue Whale Growth & Fundsmith Equity. Just for info.

[ctrader3] 10/1/2021 12:07

I've been looking for a world trust to add to my portfolio.
Nothing to do with MRCH apart from somewhere to consider
to re-invest 'profits'/dividends in.
I owned Alliance and Monks and sold for profit to re-invest
in higher yielding shares, I have also looked at Murray several
times.
with the benefit of hindsight I should have bought JP Morgan,
yield and potential capital gain but I may wait to see if Mr. Market
gives me a better entry point.