Current Share Positions

This article should convey to the reader my thought processes when deciding which companies to invest in. I am very happy for readers to critically analyse my methods. I am well aware that many will only consider this article to only be relevant at the time that it was written but I would disagree, suggesting that the lessons from my successes and mistakes are always true in investing. I hope the article is informative to others about what people should and shouldn't do in investing:

Reasoning for declaring my positions

I have recently written a couple of posts on investing such as Warren Buffett's Stock Formula and on Value Investing and felt it was time to declare my own portfolio. The reason why I am willing to declare my modest share portfolio is because I want readers to learn from me. I am sure that I have made mistakes, but I have had some successes too. I encourage all readers to read my portfolio carefully and the reasoning behind each purchase. This article does not contain shares that I have bought and sold in the past, only my current portfolio. Please comment on the post using the comments box below. All opinions are encouraged. I hope that this post will become a forum for ideas. All people of varying investor experience should comment. All shares were bought in the UK stock-market but I hope the logic still applies to investors in most economically developed countries.

Current Share Positions

My current Portfolio
The table on the right contains an up to date breakdown of my current portfolio. I will talk about each (group of) purchase(s) separately:

  • BT Group PLC: I invested in BT in October 2011. After looking closely at the financials using  Value Investing I felt that BT was an attractive option especially considering that it is establishing itself as a market leader in the telecommunications services industry. At the time the price was very attractive and I have no intentions of selling my position any time soon.
  • Aviva PLC: I have two positions in Aviva. The first position was the first investment I ever made in January 2011. I had read a lot about Aviva, tipped as a hot buy for 2011. I was swept along by the hype. I quickly bought a relatively (for me at the time) sizable position in the Company without properly checking the financials. After my 'expert' purchase I watched as my shares increase in value to about 475 pence and then skydive down as the Japanese Earthquake shook the pennies out of my investment Eurozone Crisis took hold of what was left and squeezed the life out of it. I couldn't understand what had gone wrong. I thought that I had made an expert purchase. In the Summer of 2011 I decided to actually check the finances and found that Aviva was by coincidence quite a robust company with a healthy, 7% dividend. I decided to try to average down and bought some more shares. I believe this to have been a sensible purchase as I was buying near the bottom of Aviva's dip and have since seen a decent recovery. As I continue to hold Aviva I wonder when I will sell. This is something I really need to consider but for now I will enjoy the large dividends.
  • Lonhro PLC: I believe this to be the biggest mistake I have made so far in my 'investing career'. I bought in January 2012 due to a tip from a friend back in 2011 when the price was at 20 pence. I don't know what made me invest. I had some spare cash and was too lazy to do the proper research. I figured that the share price was relatively low and that I wanted to diversify into mining anyway. I did not do the proper research required. Whilst I haven't been punished yet for this mistake, I probably shouldn't hang around too long to find out what will happen.
  • Banking (Barclays, RBS, Lloyds): These were all purchases made in August 2011 at the height of the Eurozone Crisis. When everyone was running from the banks I was taking Buffet's advice and was "greedy whilst the market was scared". I checked the financials on Barclays using  Value Investing and found the shares to be undervalued based on the 2010 Annual Report's Balance Sheet. I have decided to re-evaluate the companies finances when the shares reach 300 pence. As you can see I have made a very healthy return on my investment. As for the other two banks, admittedly these are punts. However, the logic was and still is as follows. The UK Government has invested heavily in RBS and Lloyds. I cannot foresee a future when the Government will let these two banks collapse. Whilst the banks are still making loses I view them as 'safe' investments and with dividends to (supposedly) be paid out in 2013 I actually think that I could see a happy return on my investment if I am patient enough.

Strengths and weaknesses of my Portfolio


  • I believe that Barclays and BT were very good buys and I hope to see even larger future returns on these purchases
  • It is clear to me that using  Value Investing works as shown by the fact that I used this technique when picking my winners
  • I believe that my timing on the Banking shares was correct
  • My portfolio is making an overall profit of about 12% (see the chart below)

  • I relied too much on news and tips. These were big mistakes and I need to check the financials for myself from an objective viewpoint
  • I didn't put enough capital into my obvious winners when I had the chance
  • There isn't much diversification in sectors or countries
  • There isn't a large number of companies in the portfolio

Snapshot of my Share Portfolio since mid January

Future changes and aims

  • I need to diversify my current Portfolio by buying shares on different stock exchanges or at least by purchasing multinational firms
  • I need to sell my position in Lonhro
  • Priority in future is to check the financials for myself
  • Ignore tips and news
  • Find more large dividend paying stocks
I hope readers have learnt a little from my portfolio. Please comment below. What is good/bad about my portfolio? What else do I need to take into consideration when picking stocks?
If you've got an opinion I want to hear it.

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