Dogs Nightmare and Random Shares update

I didn’t get round to doing my quarterly update for my experimental Dogs of the FTSE portfolio so thought I’d do a first ‘trimester’ update instead.

Suffice to say that the poor mutts really don’t look too healthy, mostly milling about negatively in turmoil.

Evraz plc in particular is looking extremely woeful, showing a massive loss since this portfolio start, despite showing huge gains in the previous year.

ITV leads the pack with a semi-decent gain but for how long!?

That said, the FTSE 100 Total Return was minus 1.3% over the same period so the Dogs aren’t too far behind with a loss of 1.83%, when you include dividends received (loss of 4.7% without dividends).

But it’s still early days yet, anything can happen in 8 months – yes, I know it could get worse but I’m being opimistic so see the future as being bright(ish)! In the meantime, I shall continue to collect their dividends.

As I’ve mentioned previously, this is not a strategy I would recommend to anyone, this is my own fun experiment, although I can’t say it’s a lot of fun looking at all the red numbers right now.

Cheerful Randomness

To cheer myself up, I will take a look at my Random Share Portfolio, which I first mentioned here.

This portfolio is made up of free shares awarded to me whenever someone signs up via my Freetrade affiliate link, bagging themselves a free share in the process. Link is here* if you are interested.

Here are a couple of the recent free random shares I’ve been awarded.

And here’s what the full portfolio currently looks like:

Still waiting for that Tesla or Netflix share to drop haha, but the fact is, I’m well happy with all my free shares. Most of them are ones I would never have considered buying, only because I wasn’t even aware of them.

I was particularly happy to receive shares for IShares S&P Global Clean Energy ETF (INRG) as I didn’t know there was such an ETF, never mind that it was available on Freetrade.

INRG tracks the performance of an index composed of 30 of the largest global companies involved in the clean energy sector. I think I will add to this as I’d like to increase my holding of more environmentally-friendly investments bit by bit.

Am still undecided as to what I want to do with this portfolio, ie sell or keep the shares.

For now, I think I’ll just leave them (mostly) and maybe decide on what to do in the new year. Although I missed out on the Aston Martin £10/per share payout because I didn’t reach the minimum criteria (only 1 share!) so I may get rid of that one soon.

Anyone with any thoughts on which ones I should get rid of and why?

*referral/affiliate link

My Random Share Portfolio, plus Meet Up Reminder

Long term readers may recall my fascination with randomness and investing.

One of the first ‘investing’ books I read was Burton G Makiel’s ‘A Random Walk Down Wall Street’.

You know, the one where he mentions that a bunch of blind-folded monkeys could do better than expert stockpickers. This fascination and curiosity led me to running my own Monkey Stocks League, where I had my own randomly picked portfolio.

Time has meant that I no longer run the league but I now find myself in another position to have a part of my portfolio which is made up of random stocks.

Enter Freetrade

For those interested, here’s my review of Freetrade.

As a result of Freetrade’s referral scheme and thanks to interested souls clicking on my links, I now have a tidy little portfolio of random shares.

Basically, every time someone I refer signs up, we both get a free share. Here’s a screenshot of some of the freebies I’ve received:

I’ve yet to be awarded a high value share – some people have received Tesla shares, worth around £190!!

Here’s my entire portfolio so far:

I’m not sure what I’m going to do with these – maybe hang on to some of them, maybe sell some of them.

If I sell some, perhaps I’ll use the funds to buy more of the ones I’m keeping…

Anyone interested in a great investing app plus a free share, whilst helping me grow my random portfolio, please drop me a DM via twitter or contact me via the Contact me form for a one-use only link.

I currently have a ‘mystery’ share queueing, courtesy of Tony from One Million Journey – thanks for using the link, Tony and fingers crossed we get good shares! 🙂

FIRE Meet Up Reminder

Just a reminder of the Manchester FIRE meet up next Friday, 27th Sept.

It’s taking place in the ‘Well Area’ of the Rain Bar, 80 Great Bridgewater Street, Manchester, M1 5JG.

6pm – late

Hopefully see a few of you there for a few beers and some pub grub (you don’t want to see me drinking on an emtpy stomach!).

Monkey Stocks – 3 Years on

Anyone around when I announced the winner of my Monkey Stocks League Challenge?

Anyway, as promised in my 2-year update, I bring you the ‘what happened next after 3 years’ update.

Monkey Stocks?

Here’s how I came up with the idea of running my own Monkey Stocks League Challenge.

The majority of the £500 portfolios (consisting of 5 stocks each) which lined up in September 2015 were made up of stocks/shares (from FTSE 350) and were randomly picked out of a hat.

A handful of daft brave souls followed me in purchasing their random stocks for real!

The league also had a couple of portfolios chosen by experts (John K and Huw) and of course, we had M’s infamous portfolio, based on the Dogs of the FTSE strategy, which was the runaway winner of the league after both 1 and 2 years.

One Year vs Two Years vs Three Years

As a reminder, here’s how the top 10 finished after Year 1:

Here’s how the top ten (and the rest of the league) looked after Year 2:

And here are the scores on the doors after Year 3:

Zombie annihilation, with Mr Z’s Undead Monkey Fund taking the top spot, more than doubling his initial investment.

What’s in the winning portfolio?

Three not-so-great shares but the humongous gain (and dividend) from Evraz (EVR) more than made up for those losses (apparently, Roman Abramovich is a majority shareholder – only just found that out!). Of course, EVR is also one of my own Dogs of the FTSE shares…

Anyway, after one year, only 8 portfolios made gains of >10% and there were 10 portfolios showing losses.

After two years, 17 portfolios made gains of >10% (12 of them >20%) and there were only 3 portfolios showing very small losses.

After three years, again, 17 portfolios made gains of >10% (14 of them >20%), with 5 portfolios showing losses.

John K’s Pigmamig Fund was one of those which ended up in the negative after 3 years, but had this been a real portfolio, I’m sure John would have gotten rid of some/all of those stocks to minimise/avoid losses using his own investing strategy.

Still Steady Eddy

Mention must be made of diy’s Mutley’s Magic Formula fund which continued to maintain its steady process and remained in the top 10. This fund was based on Vanguard’s 60% LifeStrategy Fund, ending up with a gain of 34%. Definitely one for the passive investors and one which I will invest in myself.

Random Strategy?

Of course, as before, in no way am I recommending that randomly selecting stocks is a viable investing strategy, though I find it’s a fascinating one, which appeals to my gambling curious nature!

Did my experiment show that randomly picking shares ‘might not’ result in disaster?

It could have all gone horribly wrong, especially as you could have been unlucky and ended up picking Carillion…

Alternatively, fortune could have shone on you and you could have randomly chosen ones like this lot and celebrated seeing your investment quadruple:

Or you could get something in between and according to the experiment, that doesn’t look too bad, with the average gain being 29% over 3 years. Better than sitting 3 years in a cash ISA

Of course, we have seen the FTSE breaking records these past three years. What would  have happened if there was a big Bear market?

No More Updates

A 3-year measurement still isn’t great for a buy and hold strategy but this will be my last update for this league. Whilst the first year was fun (especially as there was a trophy at stake!), it was a complete chore getting all the dividends for the 100+ companies, plus I had to find out what happened to companies which were bought out/sold, changed names or were no longer trading.

I’m still very much interested in the random walk theory in relation to investing so I won’t rule out creating another small experimental portfolio in the future (and again with real money).  Sorry, I won’t be running another such league though – far too much effort and not nearly enough people with skin in the game!

Anyway, I hope you’ve enjoyed this experiment and if after your own research you fancy running something similar, I’d be interested to hear about it!

Monkey Stocks – 2 Years on

Yes, it’s been (just over) a year since I announced the winner of my Monkey Stocks League Challenge and as promised, I bring you the ‘what happened next’ update.

Monkey Stocks?

Not my idea originally, but here’s how I came up with the idea of running my own Monkey Stocks League Challenge.

The majority of the £500 portfolios lining up in September 2015 were made up of stocks/shares (from FTSE 350) which were randomly picked out of a hat.

A few daft brave souls followed me in purchasing their random stocks for real!

The league also had a couple of portfolios chosen by experts (John K and Huw) and of course, we had M’s infamous portfolio, based on the Dogs of the FTSE strategy and which was the runaway winner of the league.

One Year vs Two Years

As a reminder, here’s how the top 10 finished after one year:

As at 10th November 2017, here’s how the top ten (and the rest of the league) look after two years:

Wow, the Underdogs Fund would have doubled your money if you’d kept all the shares for another year! But check out the big gains made in many of the other portfolios – buy and hold for another year strategy looks to have paid off in a big way.

After one year, only 8 portfolios made gains of >10% and there were 10 portfolios showing losses.

After two years, 17 portfolios made gains of >10% (12 of them made gains >20%) and there were only 3 portfolios showing very small losses.

One portfolio of note is the LovelyLovelyGorgeous Portfolio which a year ago, was bottom of the class, showing a loss of 19%. Another year on, it’s in 5th spot, showing a gain of nearly 38% – wonder if Stephen had purchased these for real whether he would have cut his losses or hung on for the turnaround?

Surprisingly plummeting down the table was John K’s Pigmamig Fund which finished a creditable 10th place after one year but a year later, ended up down in 20th place.

John’s portfolio scored the highest total dividend paid last year but the accolade after two years goes to Jim’s Stonegate Certainty Fund, which has provided a 22% dividend yield!

Steady Eddy

Mention must be made of diy’s Mutley’s Magic Formula fund which continued to maintain its steady process and remained in the top 10. This fund was based on Vanguard’s 60% LifeStrategy Fund, ending up with a gain of 31%. Definitely one for the passive investors!

Random Strategy?

Of course, as before, in no way am I recommending that randomly selecting stocks is a viable investing strategy!

It could all go horribly wrong, especially as you could have been unlucky and ended up picking shares like this lot, which would have seen you make a 55% loss:

Alternatively, fortune could have shone on you and you could have randomly chosen ones like this lot and celebrated seeing your investment more than treble:

Or you could get something in between and according to the experiment, that doesn’t look too bad, with the average gain being 26% over 2 years.

Although M’s Dogs strategy proved superior in this experiment, it’s hard to ignore the numerous randomly selected portfolios which bagged some very decent gains.

Of course, we have seen the FTSE breaking records etc – wrong time to run the experiment or the right time? What would happen in a stock market crash?

One More Update?

As with one year, two years isn’t really long enough for any real analysis but this experiment perhaps shows that just buying and holding (and accumulating the dividends) can be a decent strategy.

I should really do one last update so I can get the 3-year measurement.

Let me think about it, as I’ll need to make sure I keep the spreadsheet going and keep on top of all the dividends (have to admit I found it rather tedious!). Hopefully, I will find the time to update it all.

I guess I’d also like to see if the Dogs can stay top for the 3rd year running! 🙂