2007 - a new year, and a new blogger, this is my first time blogging. What is my blog all about - well its all about my investing / trading. But i'm not even good at this game, i'm only an amateur. Well if the Scissor Sisters can write a dance song called 'I don't feel like dancing', then surely I can write a share investment blog, and like the song, my blog will get incredibly repetitive and make you want to hit someone!
A new year presents new opportunities and a chance to forget the previous dumb trades that have been taken and move into the blissful optimism that a new year brings. While the ASX has been a bull market for many years now, I have consistently underperformed the market over the past 5 years, with a compound return of roughly 12% p.a over that period. Sure, I used to blame my errors on being young and inexperienced, but now as I grow closer to 30, youthful errors can no longer be afforded. Mostly, the errors of my ways have been getting out of stocks too early, but also picking some disasters along the way. I have learnt several lessons.
Some of the lessons learnt have been:
- Stay away from poor performing industries (I bought Repco shares for $2.90)
- A great idea doesn't mean money will come in the door (I bought CBD Energy for $33c)
- A company that keeps needing capital injections is losing cash and will generally keep losing cash unless it has a GREAT plan (I bought many shares that contunually had rights issues with mixed success)
- Stay away from companies experiencing demand/supply price issues (I bought McGuigan Simeone Wines at $5.07 when there was a grape glut - also bought iiNet for $2.62 when broadband prices were coming down)
- Think of the external environment we are in (I bought Hugall and Hoile shares for 10c - turns out water is a bit of an issue in Australia at the moment)
- The trend is your friend (sold out of T3 instalments at $2.27 to make a quick buck - also sold out of Brambles for $9 thinking that doubling my money from entry was awesome enough - could have tripled it!)
- When the going gets tough, get out (I bought ION shares at $2.34, watched them fall to $96c and then lost everything when the company went into administration - clever!)
- Don't trust a blogger or stock forum (bought C @ Limited for 21c due to ramp on forum, sold six months later for 6c!!)
So, with my lessons learnt my stocks for 2007 are:
Neptune Marine Services (NMS) - making up a massive 30% of my portfolio at 1/1/07
Neptune Marine Services has gone acquisition mad this year as a new CEO implements a 'strategy for growth' following 2005's great 'strategy for share price growth', which rocketed its share price from 20c to $1.50 in no time, only to see it head back to 20c recently. Stupid me rode it up an down too (although reduced holding and have recently increased holdings again). Now they have the technology, but not the customers, which is what should make these acquisitions handy. They are predicting to make profits within 12 months, if they deliver, this should power along nicely.
Global Mining Investments (GMI) - making up 25% of my portfolio
Let's face it, the resource boom isn't showing any signs of slowing down just yet. You need to be a geologist to understand which of the mining companies is going to outsperform this year, so why not go with an LIC that has a bit of everything, sure they suck you with their management fees, but hey, its low risk and there is upside in being exposed to resources without having to think about it too much or suffer from incredible volatility.
PCH Group (PCG) - also making up a large 28% of my portfolio
PCH also gives exposure to the mining sector through its scaffolding hire business. Hardly an exciting company, but makes steady money, and good money, through long term contracts. It has exposure to big projects in the Caspian Sea, problem is that the region is as stable as being Lleyton Hewitt's coach! Also has exposure to the volatile and cyclical contruction industry, particularly in WA, which is coming right off. Despite earning predicted to be flat in FY07, the following years look promising and I still think that the company is undervalued somewhat by the market focussing on the short term problems.
Mark Sensing (MPI) - makes up 5% of my portfolio
Out in sunny Bayswater, a little manufacturing plant pumps out state of the art technology in secure, anti-fraud, heat sensitive paper used for lottery and gambling - best thing is that they have their foot in the door of the asian market, and boy don't they love a flutter or 2 on the punt...a bungled acquistion has seen the share price stuck around 10c, and after years of boardroom musical chairs and more firings than every series of 'The Apprentice' put together, is this company ready to make the charge in 2007 and deliver the profits and growth that shareholders have been hanging out for? I hope so.
Biotech Capital (BTC) - makes up 5% of my portfolio
Just as sure as another annoying Australian Idol releases a single, that Britney/Paris or some other hollywood skank is grossly overexposed, you can bet that somewhere, some company will make medical breakthroughs and share prices will sore higher than Warney's phone bill. What company and what medical breakthrough that will be, I don't know, but instead of trying to pick it, i've picked this little LIC, which has investments in about 15 emerging biotechs (yeah I know, they charge fees too). Among them is continence control, something that may come in handy if my shares go through the floor!
Paladio (PDO) - makes up 7% of my portfolio
Been a big winner for me in 2006, so I thought why not hang onto it. A company that has grown by acquisition, it is still yet to make a dollar - but is cashed up, has no debt and has plenty of blue sky in my opinion.
IBA Health (IBA) - not in my portfolio at 1/1/07
Silly me, I sold out of this stock in 2006 for 80c. Wasn't I clever, it's now $1.28. So the logical thing to do is get back in yeah? Keeps going from strength to strength and should continue to see the benefits the hard yards put in over the last couple of years to grow the company. These guys also love making an announcement, if IBA was a celebrity couple, it would be TomKat, always looking to make the big announcements...lets hope it continues in 2007.
So that's my portfolio. I intend on managing my portfolio through this blog throughout the year, and track my % return for the year, with a target of 100% return for the year (slightly ambitious hey). At this point, I'm gonna call myself a buy and hold man. I feel strongly about these stocks at this point in time, but then again, there was a time when I felt strongly about wearing happy pants and listening to New Kids On The Block as well, so there is no guarentee on my loyalty in any way.
At least if this doesn't work out - I still have my horse to make money from!!
