Portfolio +19% from Jan to July this year. +45% last year.
RE4 and WHC: Coal stocks. Coal prices have stayed high. Key risks obviously are coal price, and jurisdiction.
SGML: LIthium. Requires production to ramp up.
NPK: Fertiliser. Requires production to ramp up. Fertilizer prices have come off the boil
SGY and VET: Oil and Gas. Oil has stayed stubbornly above the $100 mark, despite China lockdown and recession. Bull case is that it will stay high due to lack of new supply. Bear case is that recession will pull the oil price down.
AEP: Palm Oil. As mentioned, the 50% shareholder lady passed away recently, so I’m guessing investors are seeing the likelihood of a big divi/buybacks increasing. Again there is a risk of Palm Oil price.
ASRT: Speciality pharma turnaround. Too cheap, just needs to continue execution and get noticed, although it has actually risen 34% since I bought it about 10 days ago.
General market…obviously we’ve gone up recently after the Fed meeting. I personally think the risk is still to the downside so holding c50% cash.
Wasalaam. Alhamdullilah SGML now +80% since March when I bought it.
Regarding your question, I’m sorry but I really don’t feel comfortable recommending things. I also don’t want to come across like I’m “ramping up stocks”.
I’m just sharing what I’m actually buying/selling with my real money, and happy to discuss in general terms a stock.
So with SGML, it’s not even in production yet so for me is quite high risk/return. I tend to focus on downside risk from an overall portfolio perspective and this is one of my more risky ones, but given I’m 80% up might also have a greater upside potentially, and my downside is protected now. It’s lithium so can also easily get caught up by hype. Sorry that doesn’t answer your question - hope that helps.
Just want to elaborate on the high cash position. Don’t want to get into a debate about it…just sharing a rationale:
Holding high cash is not a long-term position. Few months iA.
I do have a market-timing method that I have confidence in and that is saying to hold high cash. I do appreciate that most of the conventional things you read on the internet say “you can’t time the market”. I believe I can get it right enough times that it pays off, i.e. it doesn’t need to be right every time.
I do also have a view on the macro-economic fundamentals. In summary
the US Govt/FED want to fight inflation
one way to fight inflation is to put interest rates up. That will do various things, including push stocks and bonds down
another way to fight inflation is to basically force the stock market down. Various ways they can do this, on top of interest rates increases.
Therefore…from a pure macro-economic standpoint and ignoring any market-timing models, personally I think the stock market is going to go down. So I have two “data points” saying the same thing.
Am not saying I am predicting a big crash, just that I think there is a high risk of a material correction.
So…in a situation where let’s say there is equal chance of 10% up and 25% down in the stock market…in that situation (which is unusual)…I prefer to hold high cash for a few months.
No-one can predict and I’m not predicting. I could be wrong here. It is just probabilities and managing risk.
Sold NPK, SGY and VET for losses of 38%, 8% and 3% respectively.
Cash now 76%. Am expecting market to be volatile in the next few months…note I’m not saying I think it’s going to crash…just that I think it will be volatile to staying more in cash.
Create a new thread for this, in the general forum, not please. Can answer it there.
Need to know which country you are in because with sukuk, it depends where you are.
Raw materials are generally very difficult to invest in in a halal way…will discuss in your new thread iA
In terms of selling, I sell when either a) my thesis is broken/wrong, or b) when my thesis is proved true and everyone can see it in the financials, and the price reflects it, and the technical analysis suggests it is a good time to sell. Every situation is different - one can’t be too strict with rules of when to sell. It also needs to fit ones psychology.
So at the moment, I’m selling early because I think there is a market downturn coming and don’t want to hold through it. I will probably lose out on some gains, but my capital will be preserved.
In regards to screening…I sometimes understand a macro trend and so look for a stock that will benefit from it. e.g. energy costs are higher, therefore I looked at solar stocks.
But most of the time I just look through lots of companies’ business plans and see if I think I believe it or not and how the market may react. I work in a field where I have written and reviewed many business plans over many years, so use that experience.
On top of my instinct gained from experience, I do have some principles and a checklist I follow but don’t really want to share on a public forum as my strategy is not one that I’ve ever read about, i.e. I don’t do value, growth, GARP, magic formula, compounders etc. etc.
One thing I will say is that the best opportunities I think are in small caps, because the big investors/funds don’t fish there. They are definitely more volatile though so I do think one needs to be very careful about it…it’s easier to lose money than to make it.
Bought a 5% position in LON:TGA Thungela at 1623. Basically a replacement for RE4 that I sold a while ago, and essentially the same thing as ASX:WHC, i.e. coal.
Sold half my position in WHC for 118% profit in 6 months. I did a review of it at the weekend and it’s run up a lot and there are some other things I feel more comfortable about investing into.
While I’m waiting for the market to stop going down, I’ve got my cash earning 3% fixed income return in a halal bank in the UK. In general, this I think is the best halal place for capital at the moment.
Still on the lookout for buying stocks…just being extra careful still.
