Portfolio for Financial Year 2010

This is my portfolio as end of FY 2010.
1. At the bottom right hand corner is the Total Yield (annually). This is the total yield since the beginning of my portfolio at 2009.
2. I have sold all my CBA at a profit. Unfortunately all other holdings are at paper loss. I am not too worry since the paper loss is fluctuating significantly. I will sold those which I have made a mistake buying those and those which have been overvalued.
3. Dividend is okay. Need to improve.

Please let me know should you have any comment or critique.

Help your own money: Choosing a broker for trading US stocks

Help your own money: Choosing a broker for trading US stocks

PME & IRI

This week PME & IRI each rises around 100% and 40%. Very fast indeed. And they almost make me sick and got me confounded at first.

PME is a medical technological company specialising in data management and pictures archiving for medical activity such as hospitals and clinics. It has operations in Europe, USA and Canada. In 2009 years ago, it bought Visage imaging from Europe. Visage itself is a money losing business but the integration with PME might help each other for better market penetration and thus better profit. The good thing about the purchase is that 1) it is bought with cash from retained earnings (it said that in the report but reading through financial statement, Visage employees are given options) and 2) it is bought while the Aus$ is high and 3) Visage is sold for $6mio but the actual cash used is only $4mio.

Prior to acquisition, PME was a great business with high margin, high RoE, low cost and low capex. Since Visage is a money losing business, the addition of Visage might put a burden on PME's profits. However, the management is confidence that the sum of the 2 companies would produce a higher profit. Investors thinks otherwise and that sends the price tumble substantially. Since the price is so low, I thought it is a bargain and hope that the management will keep cutting cost and make PME an efficient company. I also bought it also because I see that PME is debt free and its cashflow is still positive. Returning to high RoE would prove that the management is right about acquiring Visage but only time can tell.

Now its price increases dramatically without any news which puts me into alert. I would sell it when the price is right and am waiting for the financial statement.

IRI is also a very good business selling IP management system. Its Prognosis is well known worldwide. It's products is a commodity in the technology world. Its Capex and Sales & Admin Cost are rather high which I find it rather uncomfortable but it is like that in the technology company. The sudden rise in its price is because it will be reporting a much better profit this year. This is a very welcoming news given that the substantial rise in Aus$ is damaging its profit. Its profit this year shows also its leadership in its market.

Comparing wih ASX200

Previously, I've mentioned about a study that says that not many funds, even those run by professionals, are able to beat the Index over the long term. Thus, I would like to track my portfolio against ASX200 (XJO), an index that could be bought. When I buy or sell shares, I also buy or sell the ASX200. The thing is that I do not incorporate dividend in the ASX200 and, on the other hand, I do not incorporate management fees, which is charged by all fund, in my portfolio.

The 2010 was not a good year for my portfolio, even though the All Ord rise up 7%. The total for 2009 & 2010 for my portfolio is -5.7% while mine ASX200 is +3.5%. That is a very wide difference and it is not very good. In FY2009, it was a different story. My portfolio is -1.5% and ASX200 is -2.4%. Not a bad performance in 2009.

However, I am very optimistic and I will continue my share activity. This year, however, I will cut down my share buying. Hopefully, this year will be good.

Telstra

Telstra have become cheaper lately. Its price has dropped quite substantially in the past couple of days and it is still dropping. Before the NBN deal announcement, which will give Telstra around $11bil post tax for around the next 9 years, its price was climbing from its lowest. I personally not sure why the sell off. The media did not provide negative news only after a couple of days of dropping. I say it is great, perhaps when the price is low enough, I will buy some more. I love its economics. But just want to make sure, I will try to  re read its financial statements for the past couple of years. See if it might contains something good so that I can buy some more with more confidence.

Stock Positions by End of 2009 Financial Year

This is my stocks position at the End of 2009 FY

Please feel free to comment or ask.
I will post this summary review at the end of every financial year

The Beginning

Today, I have decided to share my investment ideas. By doing so, I hope I can get feedback from others about the ideas and also theirs ideas as well. Of course, I also act on it too, thus, I am not just talked about it but also act on it. So, what will happen is that I probably have acted on (buy or sell) the shares and then I share my ideas.

My history in the Australian Stock Exchange (ASX) goes back around 2006. I started small with managed fund. Back then, I was still an employee and a part time students. Since I have free cash flow, I decided to put my cash to work. But where is the ideal place to put my cash? I have thought about opening up a small business but there are 2 main problems which I was unable to answers ie the kind of business and the amount of cash required. So while pondering those two questions, I decided to try managed fund to park my cash temporarily.

I heard about managed fund but I have no idea about it. But I remembered 1 reason why I would like to try it ie its return is more than cash deposit over a long period of time (min of 5 years). So I read up on strategies about managed fund. Out of so many strategies, these particular strategies stuck with me:

1. Dollar cost averaging
2. Rebalancing
3. Not many stock professionals are able to beat the Index fund

Anyway, 2006 to end 2007 was very good years for stock, and thus my managed fund. One of mine double the value in less than a year. Wow!

In 2008, unfortunately, subprime mortgages exploded and so did stock. Mine too! Along the downhill, I pumped in more cash into managed fund. It was very scary at that time and took a lot of courage to pump in more cash. I also cashed out some of my managed fund position. I cashed out not because I panicked but because I want to create my own portfolio. I would like to cash out all of my non index fund and start my own portfolio due to the following reasons:

1. Not many stock professionals are able to beat the Index fund
2. Not many funds, after its cost, are able to beat the Index fund
3. I love Warren Buffet.

I knew that I would not be a success overnight so my strategies were and are:

1. Dollar cost averaging
2. Buy when it is cheap (this is the hardest strategies, what is "cheap"?)
3. Take into account taxes and inflation
4. Keep on reading and learning
5. Think of buying stocks as business that you would like to own

My first stock was ANZ at $14.10. I sold it 4 months later at $16.00. This is my first mistake (I realise it only lately). From then till now, I have bought CBA, WBC, TLS, WDC, WRT, PME, IDT, KSC, SNL, IRI & RCT and I have analyzed lots of other stocks. I also have developed my own book keeping to keep track my performance and to compare it with the Index. See if I can beat it =) just like Warren did.

This is just the beginning, whether I will succeed or not, only time can tell. So far, I am not far behind the Index.

I hope my blog can be beneficial to you and myself.

Good luck

Manager
Vocus on ASX