Does your adviser agree with these stocks?
The ability to pick stocks that never go down, is NOT one of our skills. Plenty of you can attest to that. Value investing using the method we advocate in Value.able and using Skaffold.com cannot prevent losses, it is about minimising the cases of permanent impariment.
Asked by BRW’s Tony Featherstone which small caps we liked we nominated a few. Here’s the list and if you cannot read it properly or would like to also read about the TOP 10 Start Ups of 2011, grab this week’s copy of the BRW.
Remember to seek and take personal professional advice before engaging in any security transactions.
Posted by Roger Montgomery, Value.able and Skaffold author and Fund Manager, 9 February 2012.
Roger Montgomery is the Founder and Chairman of Montgomery Investment Management. Roger has over three decades of experience in funds management and related activities, including equities analysis, equity and derivatives strategy, trading and stockbroking. Prior to establishing Montgomery, Roger held positions at Ord Minnett Jardine Fleming, BT (Australia) Limited and Merrill Lynch.
This post was contributed by a representative of Montgomery Investment Management Pty Limited (AFSL No. 354564). The principal purpose of this post is to provide factual information and not provide financial product advice. Additionally, the information provided is not intended to provide any recommendation or opinion about any financial product. Any commentary and statements of opinion however may contain general advice only that is prepared without taking into account your personal objectives, financial circumstances or needs. Because of this, before acting on any of the information provided, you should always consider its appropriateness in light of your personal objectives, financial circumstances and needs and should consider seeking independent advice from a financial advisor if necessary before making any decisions. This post specifically excludes personal advice.
Mick
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To become rich you need to put your eggs in one basket.Make sure you have the right basket.Be sure to watch the basket.In my view what works best is to hold 5 or 6 stocks combined with cash alternating between.At times it is good to hold cash in anticipation of a market fall.
LukeS
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MQR, SQR, ?QR
I’ve got NFI.
It gets so crowded, you end up knowing SFA.
WTF is happening here?
I claim the L.
LQR – Luke Quality rating.
So for the only QR that matters, claim your letter today. Only 22 remaining.
Roger Montgomery
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There’s only one original MQR. Stick with the original and the best. How do you know whos best? Check out the returns of the institutional members…we use Skaffold and produced the highest returns to Dec 31. We arent interest in what competitors are doing, and we know they won’t be able to keep up with the amazing feature pipeline Skaffold are already rolling out for Their members. Stay tuned. Actually, take the next step and become a member if Skaffold
James
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My adviser disagrees, but he also disagreed with MCE, VOC and ZGL being good long term investments, and he was right. Lets wait and see who is right this time.
Roger Montgomery
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Looks like we are both right on MCE and ZGL. I understand a lot of investors did not sell MCE and ZGL like we did (I have warned everyone that we are under no obligation to report our buys or sells here) but both were profitable for us. Keep an eye on cash flow, understand the business and stay informed. Lets see if that suggestion will ever be something to disagree with James. Thanks for your comment. What stocks is your adviser recommending? I had a call today from an investor who has given up on a newsletter they were receiving where the institutional adviser never admitted he was wrong on Babcocks, saying the banks would go to $100 at the peak of 2007 and more recently that JBH was his number one pick. No-one is immune to mistakes. Weight positions appropriately and you can have one or two of your players sidelined on the bench and the team can still win.
James
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My adviser is a big fan of sticking with the ‘blue chips’, including TLS, WES, BHP, CBA. This probably means less research trying to find the next big thing for him. When you think about it, you wonder what you are paying for sometimes when you have an adviser.
Roger Montgomery
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One of our advisers told us his analyst was about to put a sell on WES.. Thats a big step for a big and reputable firm…What is everyone’s thoughts on WES? I heard someone at Leightons likes fast and expensive cars so much that shareholders funds might have been used getting the driveway to the office modified so that said fast and expensive car wouldn’t have its undercarriage scratched. If true, it “makes you go Hmmmm”. Can anyone confirm this? Does anyone have another story or insight like this? How long will this keep going on…Stick to high MQR stocks with strong cash flow…
Simon
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Perhaphs over the next six months the “Value” lies in balancing capital return with large franked dividends e.g
NCK 6%
PTM 7%
CCP 4.4%
MTU 5.1%
MND 4.1%
Of course a bigger MOS maybe obtained if (like me, you are currentely 85% in cash and only 15% invested), a significant fall in equity markets could occur within the next FEW weeks. Should this occur I will acquire these five stocks at lower prices with a pot. larger dividend on offer.
Roger Montgomery
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Thanks Simon.
Ray H
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I’m fascinated by your comment about ‘long term investments’ James. How long ago did you have this conversation?
Jim
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Hi Ray
I’m not the same James you refer to in your comment. I agree with your comment and would like to add “buy & hold” should be “buy and monitor” by whatever technique you decide to choose.
To watch MCE or any other stock at this stage plummet without some action plan is not appropriate anymore. If you held the 3 stocks mentioned, THEN YOU MUST BE EXPECTING A GOOD FUTURE RETURN FROM THEM and then ‘long term’ is much longer than the last year and this may be true eventually. Otherwise there are many other stocks that are going up at any given time or just be patient as new stocks will be lower than their IV.
Cheers
Jim
Roger Montgomery
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Another pearl from you Jim. Thank you indeed!
John C
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Hi Jim – I hold one of those three (ZGL) – and for exactly the reason you suggested. As for stocks going up – yes – there’s plenty, and taking a profit on some of them to re-invest some of those funds in a company that, in my opinion, has been oversold, seems like a good idea to me right now…
Andrew
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MCE, VOC and ZGL may still be long term investments. It just depends on what you mean by long term. It was only just over a year ago that these companies came up for discussion. A year or year and a half is not long term so you can’t judge them
MCE appears to be a company that when the industry it serves picks up could be a strong competitor but will always be lumpy due the nature of what they do, VOC is well placed in a good growing industry, i am not familiar enough with ZGL to comment. I am not really interested in either 3 of these, VOC is about the only one that comes close but sits outside my circle of competence (strike zone) at the moment.
The only person whose opinion really matters is yourself. Feel free to listen to people but at the end of the day the decision is yours and yours only.
Gabe
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Roger and Others
I am still on the Banks – I have $50000 coming up for a term deposit – the bank sent me a renewal – 6% for 5 months – rather than filling the form out and posting it, I rang my branch – this is 10 days before the RBA announced no change – but the bank told me I can only get 5.75% now for 6mths. – I have noticed they have not put the interest rates back to where they were before the RBA decision. My guess is they are not happy about the RBA ruling because they wanted to keep .1% for themselves.The coming reporting wont be too bad but look out for the next.
Simon
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G’Day Gabe. For what it’s worth, I’d opt for ANZ online saver intro. special of 6% which has the added bonus of allowing you access to your 50K 24/7.