# MrBlackhill's reckless fun and struggles



## MrBlackhill

This is not a money diary as I don't plan on talking in details about my finances and goals, but I thought it could be interesting to you guys to see my thought-process, evolution and playground. It's more some kind of "investing diary" from a beginner point of view so you can see my mistakes and how I try to navigate through my thoughts and struggles.

I'm mid-30s, married and I'm basically broke because I just bought a property. We plan on doing lots of renovations on that property, so that's where most of our matrimonial savings go.

First portfolio is my personal playground. I started investing in stocks in mid-April. Previously, my money was in mutual funds for over a decade, from poor suggestions of my bank's financial advisers. I guess this was my first biggest mistake : not being aware I could invest by myself. My risk tolerance is very high. There are things in that portfolio that makes no sense - it's a playground.

Second portfolio is our money for renovations, this is where it gets reckless. I invested money I plan to use in October and that is much more money than my personal playground. Yes, I invested that huge chunk of money in only 3 stocks for that portfolio. Yes, I didn't look for red flags before buying the two last stocks and I'm currently losing a lot of money due to that. Yes, I know it's very high risk. No, that is not all of the money I'll need in October, it's half of it. The other half is cash. And it's for renovations, which can be postponed.

Did I buy those two stocks because I was excited by their run up in early June? Absolutely not. I bought them because I got my money available that day. That's why I think the entry point is important when you don't plan to hold long. And that day, I just did a blind-buy : I had the money, I bought. So my mistake here was that even though I was grasping a few concepts, I didn't even look at red flags. What kind of red flags? RSI was over 80 for both of these stocks. While my first investment on BMO was on a RSI is the low 20. I thought of buying OVV instead of SU and I should've, but I don't know enough of OVV even though it's my best performer on my playground.

Ok, I'm talking about RSI, am I a technical trader? No. I'm just slowly figuring out the pros & cons of every strategy for trading & investing and I use the best option accordingly to the context. (By the way, it's important to understand these indicator. RSI of 80 simply means the average of the upsides has been 4 times the average of the downsides. RSI of 20 means the average of the downside has been 4 times the average of the upsides. That's the RS part of the RSI.)

What's coming next for my first portfolio? Even though I plan on holding long, I may sell many stocks during 2021 because I started screening for better options on the US stocks for my playground. I named a few here : What is your favourite USD growth stocks? I don't do lots of trade at the moment because it's not much money so I don't want to lose on commissions even if it's only 5-10$. I've found better options that I can't buy at the moment due to that. I'll rebalance and refresh at the end of this year, once I'll have learned and figured out much more than today. I may even setup some algorithm trading validation for long-holders like me. Or maybe I'll become more a trader than an investor. I still have much to figure out.

What's coming next for my second portfolio? I thought of selling SU when it did +8% in one day after the recent news on EU stimulus. I decided to wait for earnings. Earnings were bad, people are currently selling today. I will continue holding, even if we are only 3 months away from when I'll sell everything in that portfolio. At the moment, it's not really losing any money. If something bad happens, I have my sell plan. And I can use my first portfolio's profit since my overall profit is in the positive. I'm just experimenting. I wish I had only bought BMO which is at +15%, but I'm glad I'm learning from my first mistakes. I'm pretty sure you're eager to see how I'll deal with that portfolio until mid-October. Guess what? If by October these stocks start recovering, I may continue holding them, and for renovations I'll use my first half which is cash and use margin and then I'll pay my margin with the profits on these stocks. Because at some point, they will recover and they've been hit hard.

Once all stocks in my second portfolio are sold, I plan on buying ETF every month and then sell at the end of the year for the next renovations. Something like DXG.

I'm not susceptible, you can give your own personal opinion on what I've done so far. I stand behind the decisions I take, whether they are good are bad.

Stocks are in order of current market value (or value when I sold). *Please do NOT copy these portfolios, I'm a **BEGINNER** and this is a PLAYGROUND.*



First portfolio : My Personal Playground for fun and hold long
Second portfolio : My Reckless investment of my matrimonial renovation money to be used in October


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## MrBlackhill

If I decide to stick to a CAD stocks portfolio, here's what I may try out for a few years. But I'm still in the process of screening stocks and learning strategies. As I said, I'm currently investigating USD stocks. And I'll investigate these stocks a bit more. That's just based on recent performance. Some of them seems overvalued at the moment, so I'm still looking for alternatives, but I'll see in a few months when I try out an official portfolio.


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## MrBlackhill

This week I was unsure about a decision.

On Tuesday the 21st, SU went up by more than +8%. I think it was due to the news about EU stimulus on Monday the 20th. But then there was earnings report on Wednesday the 22nd, after market.

I was not sure if I should sell that day (the 21th). Usually, when you plan to sell a loss, it's better after a recent gain. Why selling SU? Well, even though I plan to be a long-investor, I bought SU with money I'll need in a few months. Therefore, I wanted to sell high, then buy lower to reduce my current loss.

I was really unsure about the earnings report. I had no clue and I'm inexperienced. Since SU remained low for a few months, I thought a positive surprise on the earnings report would have made SU move up a bit more, again. But I also knew that a negative surprise on the earnings report would have erased its recent gain.

If I had sold after the recent gain and then a positive surprise occurred, I would've locked my current losses before another gain.
If I had held after the recent gain and then a negative surprise occurred, I would've loss the opportunity to sell high, buy low and reduce my current loss.

My gut-feeling told me to sell.
My brain told me to hold.
Basic technical analysis was in favour for a sell.
My heart told me to... well nothing, I have no preference for SU. It's O&G, I don't plan on buying that industry in the future, it was just for potential quick money like I'm doing currently with OVV.

I decided to hold. Then, SU had a negative surprise and now it's back to its lowest point of the week.

What I've learned:

Bullish events are an opportunity to make a move (well duh!)
Decision-taking should not be affected by a earnings report coming soon
Basic technical analysis was right, again and I was wrong, again
I would like to start playing around with that money using technical analysis for trading instead of just holding it for the next 2 months. But since so many events can occur in the next 2 months, I'm not sure that's really a good idea. I think Q2 will be the worst for most companies, but Q3 will be better. I may have to sell before Q3 ER, though. But I hope SU will slowly start moving up for its recovery. I still haven't found another option which could "guarantee" better performance in the next 2 months. There's OVV which is my playground's best performer, but that's a contrarian buy and I don't want to put my renovation money on a contrarian bet.

There are good news out there, also : Western Canadian oil companies to restore all output cuts by year-end, says Suncor CEO

Conclusion, I'll continue holding SU for the moment.

SU dropped to -19.21% P&L
REI-UN dropped to -16.5% P&L
BMO dropped to +13.43% P&L
Total P&L for that reckless portfolio dropped to -2.25%


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## MrBlackhill

Here's how I started investing in the stock market for the first time during these times of COVID and recession.

My personal playground fun portfolio against IXIC.








And just to show the effect of my big mistake on my reckless portfolio, this is against TSX.


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## MrBlackhill

If I end up creating a portfolio mixed US-CND, from what I've seen so far, it may look like this.


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## MrBlackhill

Here's an update since the last 2 weeks. I know I should not look that often, but since I only started recently during these crazy times, it's fun to see what happens.

What happened since then?

Missed an opportunity IPLP - Missed my opportunity
Lots of earnings reports
WELL surged
CJT jumped
KXS & CSU dropped bad today, but KXS is still up from 2 weeks ago
VMD dropped bad
XBC is on an uptrend, but earnings are on August 11th
Overall, my playground portfolio is doing great and currently beating IXIC with a TSX-only portfolio and much less tech exposure. I know, that's barely four months since I started, so it means nothing but at the moment it's fun to see it's going at the right direction, at least.


















What about the reckless portfolio with those 3 big positions that I want to sell in a few months? Well, my huge mistake of buying high when there were red flags is still hurting a lot and I'm definitely guaranteed to sell at loss on those 2 positions in the red. I'm happy my biggest position was bought very low and is balancing out. SU is definitely a drag at the moment, even though I think it's a very good candidate for a long-hold. Moreover, I wanted to sell SU to buy IPLP right before it got bought at +50%, so I missed my luck on that one. I still think SU can move up in the next 2-3 months, so I'm thinking about my options to delay its selling.


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## MrBlackhill

What's currently on my watchlist? I think a portfolio made of these stocks would be nice. Good diversification, nice value, nice growth, nice stability.

CNR.TO
ATD-B.TO
BCE.TO
TD.TO
KL.TO
IFC.TO
OTEX.TO
MRU.TO
AQN.TO
RPI-UN.TO
FN.TO
RCH.TO
MSI.TO
QBR-B.TO
WCN.TO
GIB-A.TO
TIH.TO
WSP.TO
AP-UN.TO
CSU.TO


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## MrBlackhill

Little update about my playground portfolio and my reckless portfolio.

What happened since then?

BMO had earnings report and investors really liked it - it's definitely helping my reckless portfolio!
WELL is still moving up, but it may plateau or drop
CJT's jump didn't last
XBC has a lot of swings
DOO, my smallest position should've my biggest, haha...
Most of the stocks in my playground portfolio are done with their recovery/momentum, so my portfolio is slowing its pace and starting to drift in volatility
After a surge in July, my playground portfolio is now loosing ground against IXIC, which obviously had to happen at some point in time
By the way, at some point I may just end up slowly selling everything and just buying some ETF that I'm currently watching (DXG, ZGQ, etc.)


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## MrBlackhill

I won't give a full update since I'm pretty busy these days. I'm going on vacation for the next two weeks, that's why. Also, I said that I would not give updates as frequently anymore. But since there was a sell off recently, I think it is good to come back on my bad moves.

As you know from the first post of this thread, I made a bad move when buying SU and REI during a temporary spike up. My red flags would've told me to wait and not to buy, but I didn't look at them at that moment, so I had a moment of weakness.

I'm currently at *-35%* on SU. I wanted to point that out because sometimes I talk about some of my good calls, but I must also remind that I've made mistakes as a beginner and I'll continue making mistakes in the next days, weeks, months, years, decades... Mistakes are an occasion to learn. People who luckily haven't made big mistakes may end up being overconfident, which is dangerous.

Also, one may say that I haven't lost money yet since I haven't sold my shares and it'll come back up. But that's not true. If you are doing active trading, then making such a bad move means losing the opportunity to make money elsewhere. We all make good and bad decisions which lead to a certain level of opportunity we are able to grasp. A bad decision drags down our average level of success. So in my point of view, it's a loss. All the other stocks that I own are in the green relative to 3 months ago, therefore - yes - I've "virtually" lost money when I bought SU 3 months ago instead of any of my other picks. That's called the opportunity cost.

(By the way, even with SU & REI drag down, my reckless portfolio is still holding in the green most days because my entry point on BMO was a good move and it's balancing out my mistake. But that also means that my mistake is cancelling all my BMO gains...)


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## james4beach

MrBlackhill said:


> I won't give a full update since I'm pretty busy these days. I'm going on vacation for the next two weeks, that's why. Also, I said that I would not give updates as frequently anymore. But since there was a sell off recently, I think it is good to come back on my bad moves.


I like your stock picks and I don't think it's as reckless as you say. But you have a large number of stocks here ... I know this is just a fun portfolio for now, but if you want to keep doing this long term, you might find it difficult to manage this many individual stocks.

Have you considered ways to trim the number of positions down to a more manageable number?


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## MrBlackhill

james4beach said:


> I like your stock picks and I don't think it's as reckless as you say.


The reckless portfolio is reckless because it's only 3 stocks and I wanted to sell them by mid-October, so I was betting on a slow recovery and hoping that the stock would be up after nearly 6 months, but I lost my bet against COVID. At the moment I'm not sure if I should take the little loss or wait until December.

BMO is doing great. I bought it in the dip and I'm up +20%. But REI and SU were mistakes. They are very good for the long term, but I bought them on a spike (worst mistake ever) and I was not planning to hold them long. But SU has been a disaster for my plan to sell by mid-October, I'm down by more than -40%. And REI didn't do well either. BMO is saving that portfolio but I'm still overall at -5% so I didn't achieve my goal for quick money. I first bought BMO, then I decided to buy REI & SU... The biggest mistake was to buy on the spike (my current methodology would not allow me to do that, but I did...). Then about REI and SU going downwards, that's being on the wrong side of the contrarian speculative bet.

At the end of August, everything was fine, but then the famous month of September came... The reckless portfolio went from being at +5.92% to currently at -4.58%.

Here's the update on the disaster.

About the playground portfolio :

Holding quite well, but my two O&G stocks (OVV and SCL) were hit pretty d*mn hard... Should've sold them before the sell-off and buy them back after
VMD also dropped a lot
AC is forever stuck in its volatility, but I'm not selling simply because it's a pretty small position, so I don't care
My WELL stock is still my superstar... I don't know how long it will last, but it's climbing the ladder
I decided to add REAL to the portfolio as I saw an opportunity for entry, which was a good bet so far as it's up +11.59% in a month
The other stocks did pretty well during the September sell-off
About the reckless portfolio :

Obviously, since I wanted to make quick money by October, I should've sold before the September sell-off
As you can see, one month ago, it was at +5.92%, now it's at -4.58%
I may extend and sell only in December, but it's another big bet... At this point I don't know if I'll see green again and COVID keeps hitting...










About how my playground portfolio is performing against IXIC :

That portfolio doesn't have as much tech, so it didn't catch the spike & drop
Though, the O&G positions made the portfolio underperform IXIC
WELL is saving the game, but for how long...












james4beach said:


> But you have a large number of stocks here ... I know this is just a fun portfolio for now, but if you want to keep doing this long term, you might find it difficult to manage this many individual stocks.
> 
> Have you considered ways to trim the number of positions down to a more manageable number?


Actually, I plan on holding more stocks... If you have seen this thread What is your favourite US growth stocks? where I made many suggestions about US stocks, well I plan on holding a few of these stocks.

I want to build around it because it's going to be my main personal portfolio for the long run. I may end up holding about 20 Canadians stocks, 20 US stocks and up to 5 ETFs for geographic diversification.

I still have a lot of homework to do for my top picks and I understand it'll be a lot of work, but I enjoy it so far.


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## MrBlackhill

This is a very interesting situation.

Let's recap.

In mid-May, I bought BMO in its dip with some of the money I planned to use for renovations in October. Then I bought blindly REI-UN and SU in early June, with the huge mistake of buying on a spike.

At the start, the reckless portfolio was distributed 50% BMO, 25% REI-UN and 25% SU.

We are now in October. My BMO position is up +28%. My REI-UN position is down -16%. My SU position is down -39%. The reckless portfolio is now distributed 64% BMO, 21% REI-UN and 15% SU.

And... I'm even!

But now another decision has to take place. Do I call it "fair game", cash out and learn from that experience? Or do I push my luck another 2 months to see what happens? After all, SU seems to have bottomed and REI-UN has been trading sideways for months. Though I'm currently even simply because BMO is on a surge, but it may not last and I could go back into the red.

I think I'll watch closely BMO and I may cash out pretty soon since it's going back near its 6-month highs. And I'll wait for SU & REI-UN.


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## MrBlackhill

Actually, I just decided to sell everything in my reckless portfolio.

I made a good decision when I bought BMO in the dip, but then I got over excited and made a huge mistake buying REI-UN & SU on their spike while I usually would never do that. I'm a beginner investor and I should learn from that mistake. I took a huge risk trading half of my renovation budget into 3 stocks in the hope of making profits in less than 6 months during this time of high volatility and uncertainty.

BMO was the good call and I could've made +25% profit and brag about it. But then I made a beginner's mistake and I should not be greedy now that I was lucky enough to break even. I should've sold at the end of August when I was at +5%, but I didn't. Then September got me down to -5% and now I'm lucky in October to get back to green. And my goal was to sell in October. I could've waited 1-2 more months in the hope of making a +5%, but at this point it's too speculative for the little experience that I have. With the elections and the COVID situation, it's too risky.

I missed many opportunities to sell before the bearish sentiment on these 2 stocks (REI-UN & SU) or to sell and buy a momentum stock, but I must recall I'm still a beginner and so many things could've gone wrong. I also could've swing trade BMO and make even more money. One stock I have in my other portfolio and which seems to be easy to swing trade is OVV (it just did +25% in 5 days from its buy signal, another missed opportunity which was easy to grasp), but I won't risk it even if I'm highly tempted. I'm still inexperienced and I truly need that money in the next months, so it's better to call this a "fair game", sell and stop trading.

I made a little profit, but nothing truly worth mentioning, it's about +0.35%.


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## hboy54

What is higher risk: buying SU over $40 in January, or buying today under $17? Do we really have an additional $23 dollars worth of knowledge of how the world is going to unfold in the oil and gas space in the next quarter century now vs January?


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## MrBlackhill

hboy54 said:


> What is higher risk: buying SU over $40 in January, or buying today under $17? Do we really have an additional $23 dollars worth of knowledge of how the world is going to unfold in the oil and gas space in the next quarter century now vs January?


Good point, here's my thought on this.

Buying SU over $40 in January was higher risk. My reasoning is that when I bought BMO, REI-UN and SU, they were beaten down by the crash, so I was expecting the start of a recovery (not a full recovery) in the next 6 months. Obviously, I was wrong with SU and REI-UN. Even if I wouldn't have made the mistake to buy SU on the spike (say I would've bought it at $24 instead, it still lost -33% in the following months from that price). Same for REI-UN, say I had bought it at $16 instead of buying it on its spike, it lost a few percent, but that one would've been even when taking into account its dividends.

I took the risk to buy them only because they are good stocks and I was speculating on a little recovery (yes, speculating). Otherwise, in normal times like back in January, I would not have done that because we never know when a crash will hit and 6 months is not enough. In normal times, I would never invest in stocks the money I absolutely need in less than 5 years. Why 5 years? That's just a rule of thumb based on my observations of the lowest 5-year return (rolling window) for stocks such as BMO and REI-UN.

It worked pretty well with BMO, because I did my homework about the technical analysis. But my mistake about SU and REI-UN is extremely obvious. I definitely bought them blindly because it's very visual. See how I bought BMO while heavily discounted but I bought SU and REI-UN blindly on a spike? I think the graphs make it very obvious how stupid it was. Why would you buy during a market crash of high volatility right *on a spike* with money you want to use in 6 months? As I said, if I had done my homework before buying REI-UN & SU (or simply looked at the graph!), I would've probably bought them respectively around $16 and $24 and I would've still lost money on SU, but not that much on REI-UN, but with BMO dip opportunity, my overall would've been much better than +0.35%, probably more like +10%.

And I know that we never know if the dip is a bottom or near-bottom, as SU crashed and then crashed again, but I was willing to take that risk as long as I bought in a dip (which I didn't do with REI-UN & SU). Notice how I bought BMO near its crash-low. *That *was the goal. If I had bought REI-UN the same day I bought BMO, I would've made money with REI-UN. Also notice how SU plateaued much higher than its crash-low and that was another red flag, so even buying on the $24 plateau was risky. It's my *blind* delayed-buy for REI-UN & SU that tricked me (they spiked 2 weeks after the date I bought BMO). And I'm happy I did this *very stupid beginner mistake* because I never thought I would do such mistake, so that huge mistake reinforced my cautiousness when over-excited.

BMO price with my Buy & Sell









REI-UN price with my Buy & Sell









SU price with my Buy & Sell

*






*


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## MrBlackhill

Wow, what a day today! My portfolio is up +3.66%.

I'm currently still beating NASDAQ with the portfolio I started in mid-April. I'm up +32.76% since then. And I only hold TSX stocks at the moment, but I plan to buy some US stocks and a world ETF.

When I'll have some cash to buy more stocks or when I'll rebalance, it'll be hard for me to decide my distributions so that I can continue beating NASDAQ (my goal).

At the moment, it's just a beginner's luck.


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## MrBlackhill

Little update about my sandbox portfolio.

But before that, I want to say one more thing about my reckless portfolio (the 3-stock portfolio I bought and sold within months). I was happy of my sell point in October as planned because I broke even, even though I made some disastrous mistakes. Then, when the vaccine news came out in November, all of those 3 stocks soared about 25% in a month. I felt like I missed what I was waiting for, because that was one of my bets. I've told my spouse and she said I should've asked her because she was aware about vaccine phases and likely durations. It's no coincidence we got three vaccine news the same month. Anyways, it was a very interesting experience with that reckless portfolio and I'm glad that my only true goal was reached : not losing money.

Now, back to my sandbox portfolio. It's currently up +40.87% since April 15th. My goal is to see if a beginner like me could play around with Canadian stocks, try things and yet beat the NASDAQ's US stocks. Based on XQQ, that ETF is up +42.83% since April 15th, so I'm a little behind at the moment.

It's all Canadian stocks. Obviously, I plan to add geographic exposure pretty soon.

I've noted my sectors/industry exposure this way (I'm not using the official sectors) :

29.5% tech
20% O&G (only for the recovery of beaten down stocks, I plan to sell that sector)
12.5% consumer cyclical
11.5% air transport
8.5% health
8% minerals
5.5% financials
4.5% clean tech
What happen since the last update?

I wanted to try more things, so I bought CTS.V, a small cap growth and RIWI.V, a micro cap
OVV and SCL are soaring back again, aiming for recovery and I plan to sell them at about 80% of their pre-COVID share price
KL dropped, I guess due to the good news about the vaccine, so people are out of gold exposure to go buy beaten down stocks recovering
GSY soared
XBC soared, one of my clean tech stocks
REAL was bought in a local dip in mid-September, which I was proud, but then investors went bearish on it
AC is back in the game, investors went highly bullish in November where it almost doubled
I've hit the +40% mark for the portfolio! Not sure how long it will hold, but anyways!
*Please don't copy this portfolio, I'm a beginner and I'm just having fun*


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## Jimmy

I know a few of those are recommended in the Motley Fool Stock advisor . They really like the Boyd Group that was hammered in the recession - largest? auto body repair company in NA. Kinaxis,Viamed they like too.

Real Matters was just recently recommended. I just bought some when it was hammered down to $19 from the mid 20's. Well Health and Docebo are 2 good growth stocks. Not sure if Well (telehealth) will decline now covid is over

I own Converge too. G&M recommended that stock and it is cheap for a co growing at 50%/yr.


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## MrBlackhill

Jimmy said:


> Motley Fool Stock advisor


I must admit I started my discovery of stocks based on what I would call Motley Fool "ads" which have a big presence on Yahoo Finance, which is the app I use to look at stocks on my cellphone. Not sure I like their posts, some are well written but I also feel like many are junk. So I make my own opinion for the stocks they point out. I got in WELL early due to Motley Fool, so I'll be grateful for that.

I found AC, CSU, BYD, CJT, KL and maybe others on a list of the top 10 best performing stocks of the last decade. Obviously I didn't invest blindly based only on such a list, I made some researches. I've found other stocks on multiple screeners. I haven't found one single free screener that would fit my needs unfortunately.

I must say though that how I was analysing stocks back in April compared to now is a bit different due to my big 7 months of experience that I now have, haha. And I'm also playing around when I'm buying stocks like DYA or RIWI.

I've read a lot during countless nights because I'm very passionate about that subject (investing). I've even asked myself if I should change career path. It's never too late, but I'm in my mid-thirties and there's a lot going on in my life already so I didn't make a move (even though I changed job recently). I'm already making many big moves in my life and I don't want to get lost.

Do you have any other free source of stock ideas? Oh, you just mentioned G&M, I like that one.

I discovered Converge because of you actually, haha. I think you've mentioned it somewhere on this forum and I got curious. They are growing fast, they have a P/S of 0.60 which is insane and they are touching profits. I have big expectations from that stock.

I'm currently looking at all the ETF because I want to diversify my geographic exposure.


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## Jimmy

MrBlackhill said:


> I must admit I started my discovery of stocks based on what I would call Motley Fool "ads" which have a big presence on Yahoo Finance, which is the app I use to look at stocks on my cellphone. Not sure I like their posts, some are well written but I also feel like many are junk. So I make my own opinion for the stocks they point out. I got in WELL early due to Motley Fool, so I'll be grateful for that.
> 
> I found AC, CSU, BYD, CJT, KL and maybe others on a list of the top 10 best performing stocks of the last decade. Obviously I didn't invest blindly based only on such a list, I made some researches. I've found other stocks on multiple screeners. I haven't found one single free screener that would fit my needs unfortunately.
> 
> I must say though that how I was analysing stocks back in April compared to now is a bit different due to my big 7 months of experience that I now have, haha. And I'm also playing around when I'm buying stocks like DYA or RIWI.
> 
> I've read a lot during countless nights because I'm very passionate about that subject (investing). I've even asked myself if I should change career path. It's never too late, but I'm in my mid-thirties and there's a lot going on in my life already so I didn't make a move (even though I changed job recently). I'm already making many big moves in my life and I don't want to get lost.
> 
> Do you have any other free source of stock ideas? Oh, you just mentioned G&M, I like that one.
> 
> I discovered Converge because of you actually, haha. I think you've mentioned it somewhere on this forum and I got curious. They are growing fast, they have a P/S of 0.60 which is insane and they are touching profits. I have big expectations from that stock.
> 
> I'm currently looking at all the ETF because I want to diversify my geographic exposure.


Yes I was wondering what screeners or reports you were using to select your stocks as many of the small cap tech stocks aren't as well known. The MF free site is good for some free information. It is the site you get when you google ' top 10 tech stocks' etc

The knowledge is cumulative and I am in the same boat and enjoying this too as a job/hobby in retirement now. I had ETFs for years then a friend recommended the MF paid site, which is entirely different and far better, and mentioned he had Shopfiy for a few years and it is up ~ 1,400 % in 3 years and I see now stocks are the better way . ETFs are still good for regions or less familiar sectors though . I also learned I needed to have a $US account for many more opportunities from both US and international companies who list on US exchanges.

I have the paid MF subscription which is $99/yr now too and it is very good. It is well worth the $ IMO even just for the reassurance and in depth articles on the common blue chips. They have beaten the market by 4x actually as they track all their picks in a scorecard.

They have 10 starter stocks (5 US 5 CDN) that are a nice mix of familiar names and some growth cos. Berkshire, Brookfield Asset management, Brookfield Infrastructure Partners, Mastercard, Nvidia etc. They have lists of ~ 80 stocks for each market and they add 2 free picks (1 US 1CDN) each month. They also have best buy now picks,picks to sell, in depth articles on all their stocks,podcasts and many research reports. Good general forums and a thread for each stock. Really a good value IMO and has helped me immensely

The paid subscription to the Globe is good ( parents have it) but is ~ $600/yr. There are some good articles That is how I heard of Converge lol. They have about 5 reports for each stock though (Zacks, Refinitiv, Value engine, Stockcalc) so maybe worthwhile.

This TMX screener is good for CDN stocks. You can cut and paste to Excel using Ctrl A, Ctrl C and p. Stock Screener | Search stocks by screener criteria There are some good articles on Morningstar too and they and Yahoo are good for stock analysis.

This site is good for stock graphing and information too. Koyfin | Advanced graphing and analytical tools for investors

Getting a US$ account is a good idea too. There are many more areas in the US we don't have - much more tech and medical for ex. ARK have some great ETFs that are available in Canada through Emerge though. They have a great site for ideas on disruptive technologies and stock ideas for the future. The white papers and articles in the "Research Center' are very good reading









Innovation Research and Models by ARK Invest


Original research on investing in disruptive innovation and breakthrough technologies by the analysts of ARK Invest.




ark-invest.com





A good book I found too was Peter Lynch's "One up on Wall St" . He talks a lot about key ratios and metrics to use to evaluate stocks. You can google the title and pdf and download it for free.


----------



## james4beach

@MrBlackhill just an observation, you are doing lots of really detailed investigations and technical measures which is great stuff, I love doing it as well. And I started off much like you. It's just that investing success is really based on long term stamina. It's a marathon, not a sprint.

As you develop your techniques you might want to try building up methodologies or infrastructure to make all this easier for you. Otherwise I suspect you will find that your enthusiasm wears off, or life takes over. It's going to be about impossible to sustain the level of activity and effort you are currently putting into this.

This is a reason I'm pretty happy with my 5-pack. Sure it's not the most optimal, and maybe it's under diversified... but man is it easy! I just review it once a year and there likely isn't anything to change anyway. Same with all the passive asset allocation techniques. It results in very minimal work, which is really nice.

Everything you're doing is great, I just want to alert you that your enthusiasm may wear off. And to really see the fruits of your investments you need to have really long term methods, things you can do -- and stick with -- for decades.


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## MrBlackhill

Jimmy said:


> Yes I was wondering what screeners or reports you were using to select your stocks as many of the small cap tech stocks aren't as well known. The MF free site is good for some free information. It is the site you get when you google ' top 10 tech stocks' etc
> 
> The knowledge is cumulative and I am in the same boat and enjoying this too as a job/hobby in retirement now. I had ETFs for years then a friend recommended the MF paid site, which is entirely different and far better, and mentioned he had Shopfiy for a few years and it is up ~ 1,400 % in 3 years and I see now stocks are the better way . ETFs are still good for regions or less familiar sectors though . I also learned I needed to have a $US account for many more opportunities from both US and international companies who list on US exchanges.
> 
> I have the paid MF subscription which is $99/yr now too and it is very good. It is well worth the $ IMO even just for the reassurance and in depth articles on the common blue chips. They have beaten the market by 4x actually as they track all their picks in a scorecard.
> 
> They have 10 starter stocks (5 US 5 CDN) that are a nice mix of familiar names and some growth cos. Berkshire, Brookfield Asset management, Brookfield Infrastructure Partners, Mastercard, Nvidia etc. They have lists of ~ 80 stocks for each market and they add 2 free picks (1 US 1CDN) each month. They also have best buy now picks,picks to sell, in depth articles on all their stocks,podcasts and many research reports. Good general forums and a thread for each stock. Really a good value IMO and has helped me immensely
> 
> The paid subscription to the Globe is good ( parents have it) but is ~ $600/yr. There are some good articles That is how I heard of Converge lol. They have about 5 reports for each stock though (Zacks, Refinitiv, Value engine, Stockcalc) so maybe worthwhile.
> 
> This TMX screener is good for CDN stocks. You can cut and paste to Excel using Ctrl A, Ctrl C and p. Stock Screener | Search stocks by screener criteria There are some good articles on Morningstar too and they and Yahoo are good for stock analysis.
> 
> This site is good for stock graphing and information too. Koyfin | Advanced graphing and analytical tools for investors
> 
> Getting a US$ account is a good idea too. There are many more areas in the US we don't have - much more tech and medical for ex. ARK have some great ETFs that are available in Canada through Emerge though. They have a great site for ideas on disruptive technologies and stock ideas for the future. The white papers and articles in the "Research Center' are very good reading
> 
> 
> 
> 
> 
> 
> 
> 
> 
> Innovation Research and Models by ARK Invest
> 
> 
> Original research on investing in disruptive innovation and breakthrough technologies by the analysts of ARK Invest.
> 
> 
> 
> 
> ark-invest.com
> 
> 
> 
> 
> 
> A good book I found too was Peter Lynch's "One up on Wall St" . He talks a lot about key ratios and metrics to use to evaluate stocks. You can google the title and pdf and download it for free.


Thanks for the great info, it's very valuable to have the opinion of people who are using some paid services. And I agree that a 600$ subscription is expensive. I wouldn't want to end up paying over a 1000$ a year in subscriptions unless I truly believe that the info provided allows me to make a additional 1000$ in profits, at the very least.

I have a list of more than 20 websites I've visited for stock screeners, articles and analyzers.

They all have their own features, but it's still not enough to me. I may want to pay for some advanced screeners also at some point.



james4beach said:


> Everything you're doing is great, I just want to alert you that your enthusiasm may wear off.


I've already build a very long list of investing ideas and since I don't have enough money at the moment to invest in everything I would like, I may simply pick out of that list if ever I lack time or interest in the future for active researches of new ideas. I have a plan which can keep my money busy working for me for at least 5 years without too much effort.


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## james4beach

@MrBlackhill ... you're clearly a smart guy. I can see you've gotten pretty excited about individual stock picking, and you've listed many good ideas over the months. I have no gripes with the particular stocks you mention. As you know, I own some tech, CJT, etc.

But I believe you're also pretty new to stock-picking right? Correct me if I'm wrong but I think you started looking at individual stocks only in 2020. (The same is true for many young investors by the way)

I just wanted to share with you something I've seen over the years, which is that it isn't always as easy as it is today. The market has been extremely cooperative lately. Strong stocks are remaining strong, and those with powerful uptrends are rocketing higher without really any corrections.

For the trailing year, my Canadian growth portfolio is up 21% versus just 6% for the TSX Composite. I don't think I've ever seen such a strong result in my ~ 5 years of stock picking. It's insane! This is atypical.

My warning to you is that: it's not always going to be this easy. Sometimes the market's behaviour just changes, and everything that used to work suddenly no longer works. Just like I outperformed the index by 15% this year, it wouldn't surprise me if later I underperform by the same amount. Maybe I'll do 20% worse than the market next year. Who knows!

I just want to warn you that there's a danger of learning to do all this, or taking your first stab at it, during today's conditions. You might walk away with the idea that this is easy or sustainable. *Many* young people are thinking this right now. Overconfidence is very dangerous because Mr Market likes to encourage overconfidence, and then pulls the rug out from under people. I have to keep telling myself the same thing: don't get overconfident. This is not an easy game. Just because you have strong results, doesn't mean you really know what you're doing.


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## MrBlackhill

james4beach said:


> @MrBlackhill ... you're clearly a smart guy. I can see you've gotten pretty excited about individual stock picking, and you've listed many good ideas over the months. I have no gripes with the particular stocks you mention. As you know, I own some tech, CJT, etc.
> 
> But I believe you're also pretty new to stock-picking right? Correct me if I'm wrong but I think you started looking at individual stocks only in 2020. (The same is true for many young investors by the way)
> 
> I just wanted to share with you something I've seen over the years, which is that it isn't always as easy as it is today. The market has been extremely cooperative lately. Strong stocks are remaining strong, and those with powerful uptrends are rocketing higher without really any corrections.
> 
> For the trailing year, my Canadian growth portfolio is up 21% versus just 6% for the TSX Composite. I don't think I've ever seen such a strong result in my ~ 5 years of stock picking. It's insane! This is atypical.
> 
> My warning to you is that: it's not always going to be this easy. Sometimes the market's behaviour just changes, and everything that used to work suddenly no longer works. Just like I outperformed the index by 15% this year, it wouldn't surprise me if later I underperform by the same amount. Maybe I'll do 20% worse than the market next year. Who knows!
> 
> I just want to warn you that there's a danger of learning to do all this, or taking your first stab at it, during today's conditions. You might walk away with the idea that this is easy or sustainable. *Many* young people are thinking this right now. Overconfidence is very dangerous because Mr Market likes to encourage overconfidence, and then pulls the rug out from under people. I have to keep telling myself the same thing: don't get overconfident. This is not an easy game. Just because you have strong results, doesn't mean you really know what you're doing.


Thanks @james4beach , I appreciate your advice.

I'm very aware that the market has been an easy game only for this special year because I started to pick my first stocks on April 15 and the market has been extremely bullish since then. Still, I've seen one of my big positions drop -40% on a portfolio that I had to sell on a deadline, so I've had a first experience with that feeling.

I'm also aware of the hype about investing in the market. Every young people I know are trying their luck. The crash as spread the word to some opportunities and it has reached a lot of people. It has reached me out of some huge coincidence. Butterfly effect. I wish it had reached me back in 2008, I would've started my investing career sooner, but anyways.

XQQ is up +45% since April 15, so my portfolio currently at +42% is nothing too impressive, which tempers my confidence. (Actually, since I added money over the months, the +42% is better than XQQ's +45% from April 15 because my unannualized XIRR is +54%, but anyways)

Also, if I just look at the market trends, I see that both 2019 and 2020 have been strong years (mostly for tech), so I'm expecting next year to be much less impressive. Or maybe not, I have absolutely no clue due to this COVID situation which has drastically changed the economy and the way we work. Maybe this will continue to push the tech stocks due to all the work-from-home disruption. Or maybe people will take profits from tech stocks to invest in beaten down sectors that will start recovering (slowly) as the vaccine is distributed.

At the moment, I enjoy stock-picking for fun, but starting next year I'll have more exposure to ETFs (though it'll be custom ETFs) which I believe may average a CAGR better than I could do by stock-picking.

I don't do bold moves like some people going all-in on one stock or even all-in on options trading. Also, at the moment I'm building a portfolio which is more focused on the "experience" (trying things out) than on the returns. My portfolio is not 6 figures and I haven't spent 5 figures on any of my current holdings (though I was in the 5 figures with the stock that dropped -40%), so it's not as if I could lose that much. I will definitely not have the same strategy once my portfolio is in the 6 figures and approaching 7 figures.

I'm just enjoying the present moment as I know more challenging times are yet to come.


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## james4beach

MrBlackhill said:


> I'm just enjoying the present moment as I know more challenging times are yet to come.


Makes a lot of sense. Don't get me wrong, I'm having a lot of fun in the markets. I know we have a plague and everything (I honestly am very scared of dying) but the market has been tremendously fun and entertaining this year. Maybe if we had a plague every year, we'd all get insanely rich in stocks!

Enjoying the experience is absolutely worth it. This is a hobby for me ... it's fun.

You might have seen my comment that I am 90% indexed and 10% active. But if I could re-start from day one, back when I didn't have much money and still had a high income, I might do...

1/3 actively managed. Whatever in-vogue ideas, the kinds of things many millennials now consider normal investment techniques, like speculating long JETS, AMZN, TSLA, NIO, TQQQ, etc. Perhaps the ambitious very high returns, whatever.

2/3 must be strictly be invested into a standard balanced fund or other moderate risk passive strategy, couch potato. Something with traditional index ETFs, on a clear benchmark. Traditional asset allocation, strictly followed. (This is how my RRSP is actually invested)


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## james4beach

I'll add a comment about Wall Street. The professionals are fully aware that many young people started with the COVID crash. It's well known that there is a new cohort in the market, they're having a lot of fun, and they are totally new. On a walk in the park last week, I overheard young adults talking and bragging about stocks!!

Wall Street thrives on that. For them, this is like shooting fish in a barrel. They might not have screwed the millennials yet, but I guarantee you they are working on it. What I think is also dangerous is that the thought patterns (behaviours) of the millennial first time investors are very predictable and well broadcast. This is thanks to their obsession with social media.

Places like reddit, wallstreetbets, Robinhood, other social media are all conduits _which broadcast the behaviour and thought patterns of the novices_ to Wall Street. That's extremely dangerous because it means your trades are predictable.

I know this all makes them sound quite evil, but I think this is the nature of Wall Street. They will analyze the new cohort, characterize the nature of their trades, and keep tracking what they do. Wall Street looks for opportunities to exploit, and a group of like-minded novice traders is a beautiful opportunity. They will likely "herd them" into certain trades and then trade against them.

That's my guess. I can't tell you how exactly it would happen, because if I knew that, I'd be filthy rich. But I am certain they are cooking something up. They always are. They have entire teams of PhDs working on this stuff: people mining internet data, message forums, analyzing trading patterns, analyzing the data flows they get from Robinhood (remember, they *pay* Robinhood to get that data).

How will Wall Street do this? It could be crypto currencies, could be TSLA, it could be the tech sector, or something in the options market. If history is any guide, Wall Street is going to take a huge amount of money from the hands of millennials and first time (COVID) investors.


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## MrBlackhill

Here's my end of year results.

















What happened since last update?

XBC soared
CTS soared
WELL recovered from its last correction
GSY is bullish
VMD continues being bearish
AC got a correction from its last soar
Bought HAI
Geographic exposure so far

100% Canada (and I want to change that soon)
Sectors & industries exposure so far

29.36% Technology
18.28% Industrials
10.54% Air Transportation
8.85% Freight
1.69% Airlines

5.17% Clean Energy
2.57% Other

17.74% Energy
12.24% Consumer Cyclical
8.68% Healthcare
7.76% Basic Materials
6.49% Gold
1.27% Copper

5.98% Financials

What do I think of my performance so far? I'm not sure. I don't find it impressive. A big part of my gains are due to my big positions in contrarian bets (OVV & SCL) that each doubled, and I plan to sell them by mid-2021. I was also lucky to find a stock that soared +300%. Otherwise, from what I recall, my best stocks were not found from screening, but from reading articles (and then looking at their fundamentals and making my own opinion). Finding good stocks from reading articles seems much less systematic than finding good stocks using a screener.

We'll see what happens in 2021, I'm very curious.


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## Jimmy

That is great and happy new year. You bought many good stocks at the bottom of the market. Reading articles and getting recommendations from them is as good as screening IMO. The analysts have already done the screening for you. They also know much more about the companies and industries doing this for a living. Actually the methods work together. I exported some CDN companies from TMX and did sorts on return and valuation etc to id investments then google them for reviews or read a review and then find them in the spreadsheets.

Good work though, about 10x the market! I know you are considering getting US stocks which would really help . There is so much more opportunity esp in the tech and health sectors that are underrepresented w CDN stocks


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## MrBlackhill

Started the new year with +1.03% on Monday, then +1.81% on Tuesday.

I'm very curious how this year will go. Last year was easy because I started after the crash. This year will be another game.


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## MrBlackhill

Interesting.

As you know, my portfolio is actually my playground because I don't have that much money into it. It's in the 5 figures, so it's below 6 figures.

I call it a playground because what I'm actually diversifying is... different kinds of experiences.

I mean:

I bought a stock just a few days after its IPO
I bought a micro cap (or is it a nano cap, haha?)
I bought a penny stock below $1
I bought some beaten stocks as a contrarian move
I bought momentum/hype stocks
I bought value stocks
I bought growth stocks
I bought a stock with a drastic change in management
I bought stocks based on fundamental analysis, others based on technical analysis, others based on articles I've read, etc.
...and so on
I didn't talk much about DYA.TO.

I initially bought it because it was a TSXV stock about to upgrade to TSX, it was on the list of the 2020 TSX Venture 50 and it was trading below $1 and usually I wouldn't buy stocks trading below $1. Fundamentals and financials didn't seem good either. Historical share price movement wasn't going anywhere but volatility. Yet, I found the company's product interesting and I wanted to experience that kind of stock.

Oh, I'm mistaken, I bought NVA.TO when it was trading at $0.80. It was a contrarian bet for a recovery, but then I decided to dump it and buy SCL.TO instead, which was a better choice, so far.

Anyways, back to DYA.TO.

The stock felt pretty boring for many months. I was waiting there with that stock that dropped about -25% below my initial buy price. But then... volume kicked in at it jumped +50% in 2 days, so I went from a -20% to a +20% in just two days.

Pretty interesting. Is it just volatility? Pump and dump? I have no clue. But now I can watch all the irrational reactions of other people who own that stock and see how I feel and how I react to such a move in that context.

I won't write a full update on my portfolio because we are just two weeks past the last update, but I bought FSV.TO and AHC.TO. My holdings are currently at +45% with an de-annualized XIRR of more than +60% on 9 months.


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## Jimmy

Those are good returns. It is good when you can find undervalued stocks or stocks that have declined for no fault of their own. Then it does seem to take a while before it attracts lots of $ but great when it jumps. I bought a small amt in PDD a few months ago undervalued. Apparently they now have new ideas on ecommerce competing against Alibaba. Up ~ 50% in 1 month lol.


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## MrBlackhill

Jimmy said:


> I bought a small amt in PDD a few months ago undervalued. Apparently they now have new ideas on ecommerce competing against Alibaba. Up ~ 50% in 1 month lol.


Nice!


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## MrBlackhill

My portfolio was moving up, up, up lately because of oil recovery that pushed my contrarian bets OVV.TO & SCL.TO higher and higher. I plan to sell them at some point this year (because I don't want to invest in oil-related stocks), but as long as there's place for some oil recovery, I'll hold them out of greedy ego.

I was expecting at least a little correction at some point and it did happen yesterday, which is totally fine. But then today was also going to be a bloody day... until the uncorrelated volatility of my portfolio saved the day. It's not the first time it happens, but that's what I like to see.

The daily volatility for my individual stocks is ranging around -6% to +8%, with a portfolio volatility ranging around -1% to +2%.

Today, one of my small caps soared +30% out of nowhere (HAI.TO), so my portfolio ended in the green. Sure, it will likely have a price correction next week or next month or so, but if that price correction happens when other stocks are up, the result on the portfolio will be blended and may end green again.

I strongly believe that highly volatile stocks can still be used to build a low volatility portfolio as long as they are uncorrelated, which means the portfolio's risk-return is improved. It can even mitigate drawdowns. It's basic maths and statistics.

That's what asset class diversification does. But I believe it can also be applied to 100% equity portfolio diversification.

Anyways, for more about this test, we'll see what happens with the portfolios in this thread : All equity, high returns, low drawdowns


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## MrBlackhill

Little update with this crazy market and that oil move boosting my oil-correlated stocks... My two contrarian stocks are now 20% of my holdings, which is high, but I'll let them run. Actually, they even make up for 40% of my gainers total gains... It's risky, but I decided to enjoy the ride at the moment and watch carefully what happens with oil. I'm trying to figure out a plan about what will be the trigger to sell those stocks. I was planning to sell them once they recovered. OVV.TO has almost recovered from its 2019 lows. SCL.TO still has a lot of room to grow and today it soared.

So, what happened since then?

As I said, huge gains for OVV.TO and SCL.TO due to oil soaring from $50 to nearly $60 in a month
1.86 TOI.V shares have been given for every CSU.TO share (then rounded) and that's currently a +8% gain from that spin-out gift
I bought a few stocks at the beginning of the year : FSV.TO, AHC.TO and MAV.TO
CTS.V continues its momentum
Currently at +50% all-time P&L, which I was not expecting after 10 months of investments... but the market is so bullish... (a big part of that performance is due to my contrarian bets, though, so it's still highly risky)
In fact, I'm even at more than +70% XIRR...!


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## MrBlackhill

My OVV.TO position is now the second stock in my portfolio to have 4X in less then a year and currently my best performer. Closest stocks that may also 4X are DOO.TO, SCL.TO and GSY.TO.

Meanwhile, KXS.TO just had bad earnings and dropped from its plateau for a -17% today, which dropped its P&L% to only 6%.

But... RIWI.V just had very good earnings and soared +15% today. I see that insiders keep selling this stock, but their fundamentals are rock-solid. I have to dig deeper with this one.

Very interesting to see how my current portfolio behaves as the there's many sector rotations (mainly tech being sold and energy being bought). Even if I'm not fan of energy stocks, I'm happy I bought some for their recovery.

Also, I swapped XIT.TO for HBGD.TO. But as I was expecting tech to tank, I should've sold XIT and wait a bit before buying HBGD.

I'll give a portfolio update pretty soon. I am now 25% energy, 25% tech.

A day in the life of my portfolio during these times of decline (portfolio at -1.48%) :










By the way, I see that this thread has about 136K views for only 34 posts. The only other recent thread that I've here with such a ratio was this one, with the "Ethereum" buzzword in its title : Ethereum 2.0 Venture

So... I don't know if I used some buzzword somewhere or if people are simply very curious of other people's portfolio and adventure.


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## m3s

MrBlackhill said:


> By the way, I see that this thread has about 136K views for only 34 posts. The only other recent thread that I've here with such a ratio was this one, with the "Ethereum" buzzword in its title : Ethereum 2.0 Venture
> 
> So... I don't know if I used some buzzword somewhere or if people are simply very curious of other people's portfolio and adventure.


I also noticed that

More views than the Coronavirus thread with +4k views


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## MrBlackhill

m3s said:


> I also noticed that
> 
> More views than the Coronavirus thread with +4k views


Wow, interesting! And this thread is younger. That's weird.

Another good one: This 7-month-old thread with 36 posts has 139K views. The Tesla (TSLA) thread is 9 years old with 2K posts and has... 139K views also.


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## MrBlackhill

This beginning of year is pretty crazy in my portfolio.

I've seen KXS drop -20% in a day, I'm currently seeing XBC dropping -35% in a day, but yesterday I saw SCL soar +20% in a day. Yesterday, my portfolio was up +4% due to SCL. (If you are wondering, with that XBC drop of -35%, my portfolio is down -2%, so it's not that bad)

It is crazy because I have:

SCL at +100% YTD
OVV at +90% YTD
GSY at +33% YTD
AC at +30% YTD
VMD at +27% YTD
CTS at +25% YTD
ERO at +20% YTD
CJT at -17% YTD
KL at -18% YTD
REAL at -18% YTD
KXS at -25% YTD
XBC currently at -42% YTD
(The other holdings are in a less crazy range between -15% to +15% YTD... Yes, that is the "less crazy" range!)
My whole portfolio is at +12% YTD, which is totally beating the market, but with such a huge volatility, it's pretty fragile and nothing is won yet. Let's say that SCL and OVV saved me... but that could be temporary and I could get burned as they are correlated to O&G sentiment which has lots of mixed feelings.

That's certainly a lot of action in only 2 months, ha!


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## MrBlackhill

Hi all,

I'm lacking time for a detailed update because my spouse is 6 months pregnant and we are still doing renovations, but here's something to think about.

We all know we can't time the market. The best we can do is to buy when indicators tells us a stock is oversold or on a great momentum or on a recovery, but that doesn't mean you won't lose money in the following months. That's also why you must do your due diligence about the stock and its pricing.

Here's a few visual examples.

The green dot is where I bought that stock. Looking backwards, it was on a dip from a pretty stable fluctuation between $3 and $4. But then it dropped to $2 during the following months.









The green dot is where I bought that stock. The stock was on a great run for a year. Then it soared into a dangerous bubble territory before it finally dipped. I bought that dip and I was proud of my lucky timing as the stock moved up afterwards... until it crashed. To me, that's just another great buying opportunity.








The green dot is where I bought that stock. The stock started a recovery, climbing the stairs. I decided to wait for one of those steps to stabilize before buying. Still, it dropped right after I bought.








The green dot is where I bought that stock. Here I tried a momentum move on a penny stock, but it was at that exact moment that the stock decided to retreat.








The green dot is where I bought that stock. This one shows that you must be cautious. When the stock soared from $4 to $11, it was a bubble territory. Maybe I should've taken advantage of my early position, but I'm a long investor. See how stocks always drop much faster than they rise.








-----
Last update, my portfolio's XIRR was about 73%. Obviously, that's not sustainable. I'm now at my 1-year anniversary of my portfolio and I'm currently down to an XIRR of 65%. That's still unsustainable, but I'm proud of that result during the recovery of the market crash. I hope I'll be able to sustain 20% XIRR over 15 years. It's pretty aggressive, but feasible.


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## MrBlackhill

So I decided to make a move today and to try something.

At the moment, I don't have money available to invest. Hopefully I'll have some money to buy stocks during September.

But many stocks I've been watching are currently down and I wanted to take action. I recall I've bought 2 contrarian positions during the 2020 market crash : OVV.TO and SCL.TO. When I bought them, I knew I wouldn't hold them for too long as I'm not a big fan of the Energy sector, even though I believe it was a great opportunity to buy the hated and beaten down stocks. And I was right, as I did between 3x and 4x with those stocks.

Though, at the moment, I'm unsure of the next move for OVV.TO and as I was at +270% in a year, I decided to sell that position and diversify. Maybe it's too soon to sell, maybe the stocks I've bought with that money will continue going down, but anyways, I had to try it.

With the money from selling OVV.TO, I've bought:

RPI-UN.TO (A boring packaging company which has been doing great and currently oversold. I wanted to buy at $60, but I was willing to pay $65 instead of timing the market.)
FOOD.TO (A company growing very fast. It shot up too fast and now it's going down. Maybe it'll continue dropping in the $6s, but I was willing to pay in the $7s for their growth and they are pretty oversold at the moment.)
PHA.V (Yup, I had to make a new bet, as I hope the pandemic will give a push to the healthcare sector. A nanocap growing sales pretty fast and profitable.)
DXG.TO (That's an ETF I've been watching for my ex-Canada exposure. It's actively managed, but so far I like what I've seen.)
I have kept my full position on SCL.TO as I believe that stock is still way too beaten down. And I want to keep some decent exposure to Energy-related stocks.

Maybe I should've kept a tiny bit of gambling money and put it in an Ethereum ETF...

With these transactions completed, my annualized XIRR since April 2020 is currently +58%. Obviously, I don't expect this kind of performance over decades. I simply hope I'll be able to manage +20% XIRR, which is pretty aggressive. At the moment, I'm still trying out things as I have only 5 figures invested. Hopefully I'll have gained enough experience once I reach 6 figures invested.


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## MrBlackhill

Here's more info about the status of my playground portfolio (in bold my biggest positions):

27.69% Tech
*11.37% CSU*
*4.74% CTS*
3.24% KXS
1.63% REAL
1.60% HAI
1.40% HBGD
1.39% BEW
1.17% TOI (from CSU)
1.16% RIWI

17.13% Consumer Cyclical
*9.15% BYD*
3.28% FOOD
3.22% RPI-UN
1.47% DOO

11.89% Energy
*11.89% SCL* (holding it until recovery, as I did with OVV)

9.86% Healthcare
*4.77% WELL*
3.30% PHA
1.78% VMD

9.32% Industrials
*5.69% CJT*
1.48% AC
1.34% XBC
0.80% DYA

7.33% Financials
*7.33% GSY*

6.42% Materials
*4.98% KL*
1.44% ERO

4.23% Consumer Defensive
2.14% MAV
2.09% AHC

3.79% RE
3.79% *FSV*

2.41% Global (23.5% Industrials, 21% Consumer Cyclical, 16% Financials, 16% Tech, 9.6% Materials, 8.5% Comm, 5.4% Healthcare)
2.41% DXG

There's a huge 38% of my reckless portfolio which is pretty unstable (12% is my remaining contrarian stock, 12% is momentum, 14% are bets), but I'm ok with that, I'm still having fun.

Speaking of those stocks, let's give more detail about that:

DYA is currently down -41%. I'm still holding it because it's a very small position and it's a penny stock so that kind of volatility was to be expected.
RIWI is currently down -44%. I was expecting more from this stock based on the data I saw. As posted in #39, I thought I was buying a dip, but then it crashed. I still like the tech, so I hold.
AHC is currently down -36%. I don't get this one, maybe I got caught in a value trap because its P/E is only 2.68! And its P/S is 0.71! And its P/B is 2.14! I'm eager to see what's coming next.
BEW is currently down -32%. Again, as I posted in #39, got the bad timing to buy on a peak. I should've been more careful.
HAI is currently down -30%. They say you shouldn't buy too early after an IPO. Well, I tested it and got burned. I'm still confident in the future of that stock anyways.
REAL is currently down -30%. Again, as I posted in #39, I thought I bought the dip, but then it crashed harder.
That's a lot of downside, but my XIRR is currently +58.50%, so I'm all good. That's meanly due to the stocks I bought during the crash, though. Yet, you know what? I bought WELL (+262%) and CTS (+114%) and their return totally outpace that list of stocks which are currently down. We'll see how it goes now that the game gets harder.


----------



## Jimmy

CTS has been doing well among all the tech carnage of late. Was a top pick by Bruce Campbell on BNN Market call today. I bought soem Sangoma latelay too - another small cap w good growth. Food was a top pick by Stephen Takacsy
I think Apollo is way undervalued. Same area as MAV and P/S makes no sense It will bounce soon Bought some more recently. REAL should bounce soon too.

Many other good stocks.


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## MrBlackhill

MrBlackhill said:


> Maybe I should've kept a tiny bit of gambling money and put it in an Ethereum ETF...


Pretty happy I didn't.

I wrote that post on May 11th.










Maybe I could watch how bad it goes and then put some gambling money...


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## james4beach

MrBlackhill said:


> Pretty happy I didn't.


Yeah, I'm glad you didn't load up on koinz.

I still think it's better to speculate in stocks. At the very least, these are highly regulated and are subject to laws, which means that people can't trade on insider information. There are limits to stock promotion and manipulation.

Instead, if you gamble in koinz, you're working in an unregulated market where insiders and large koin holders are constantly manipulating prices. There are no laws to hold back anyone. Major players with conflicts of interest can appear on CNBC, say whatever they want, move the markets, without any requirement to disclose. Elon Musk himself can trade against you all day, and I suspect he does (since he's basically a con man).

On top of that, the koin market has problems with crooked exchanges, suspicious pricing, potentially a ton of "wash trades" still occurring globally (total price manipulation) and all kinds of shenanigans that have been outlawed in stock markets long ago.

Back in the 1950s it was normal for stocks to be manipulated and controlled by insiders, and for those in the know to get all the special deals and info, but that just isn't the case any more thanks to regulation.

IMO you have a higher probability of success when you gamble in stocks.


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## MrBlackhill

That's a visual about how much I'm lucky and unlucky at the same time.

I sold OVV.TO after +270% in 1 year. But then the month after it soared another +30% which would have made me run up to +380% if I had held it a bit more and waited until the summer as I planned when I bought that stock.

But when I bought it in 2020 during the crash, my plan to sell was to either wait until recovery or wait until summer 2021. And it recovered to its pre-crash level before the summer.

With the vaccine and the summer, maybe I should've extend my plan and truly wait for the summer.

But... Why am I here complaining about "only +270% in a year"?


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## MrBlackhill

MrBlackhill said:


> With the money from selling OVV.TO, I've bought:
> 
> RPI-UN.TO (A boring packaging company which has been doing great and currently oversold. I wanted to buy at $60, but I was willing to pay $65 instead of timing the market.)
> FOOD.TO (A company growing very fast. It shot up too fast and now it's going down. Maybe it'll continue dropping in the $6s, but I was willing to pay in the $7s for their growth and they are pretty oversold at the moment.)
> PHA.V (Yup, I had to make a new bet, as I hope the pandemic will give a push to the healthcare sector. A nanocap growing sales pretty fast and profitable.)
> DXG.TO (That's an ETF I've been watching for my ex-Canada exposure. It's actively managed, but so far I like what I've seen.)


Here's the status of those entry points. I'm now trying to buy stocks during a consolidation or a dip.

I bought those stocks on May 11th, about 3 months ago.


RPI-UN.TO : As I thought, it dipped to $60, and so far it didn't go further down, so it's as I was expecting and I'm currently at -1.76% which is fine, it's in the bounds of volatility and I'm waiting (hoping) for a rebound at some point. Anyways, I'll be holding long.
FOOD.TO : It didn't go down to the $6s so I did a great job buying in $7s and I'm now up +43.90%, but there could be more volatility ahead.
PHA.V : I bought in the low range of the volatility, but it had a little downward movement recently so I'm at +0%. Now wondering how long this plateau will hold and hoping for the next move to go up one step instead of going down one step.
DXG.TO : This one is a global ETF (actively managed), so I only wanted to buy it during a dip and hold long. Worked out, I'm up +7.70%.

A few days ago, I've also been tempted by another micro cap and bought it during a dip. So far so good, but that's just less than 2 weeks ago. I bought TTR.V. I believe its dividend will help this stock as the yield is currently at 2.76% so I doubt the stock would ever drop more than -50% in the next few months because it just started paying dividends and that's what made it shoot up.

A month ago, I've also added to my KL.TO position, buying the dip and it worked out as that trade is up +5.68%.

Recently I've tried to improve my stock screener, how I select stocks and when I make a move. We'll see how it goes.

For instance, I tried many different things for fun and now I know that I wouldn't have bought DYA.TO. Why I don't sell? It's such a small position and I'm curious to see what will happen in 1 or 2 more years. Or maybe 5 more years. I don't care. It's currently down -55%.

I've also bought RIWI for fun, but I believe I was way too early, the IPO was very recent and now I'm down -63% and on a downward trend. Again, I'm not selling because it's a small position and I'm curious to see what will happen next, in a few years.

RIWI and DYA are my worst performers.

My third worst is REAL but I have more confidence about this one. I thought I had bought a dip which then bounced back until it crashed even further and I'm now at -46%. For this one thought, I'm wondering if I should buy more at this level. I feel like the market has overreacted and it seems undervalued.

I also have 2 more stocks currently at -42%, MAV.TO and AHC.TO. Bad/Unlucky entry points. I'm also considering adding to those positions.

I believe I'm improving when it comes to buying, but I also have to learn when to sell. To me, that's certainly the harder part. For instance, there's that sad story where I bought XBC.TO at $3.70, then it shoot up to a peak at $11.55 and crashed back down and now it's at $3.77. In retrospective, I believe that when it went above $8, there were clues that it would be unsustainable. But maybe I'm wrong, maybe it's just the 4Q2020 results that triggered a huge sell off.

There's also my VMD.TO position which is currently being bearish, but that's another one that I consider buying more during this sell off.

Though I have a lot of good news over the past few months.

My big CSU.TO position is up +23% YTD and the TOI.V stocks it gave me are up about +70% since February.
My big contrarian position SCL.TO is up +39% YTD even though it lost -25% during the last 2 months.
My GSY.TO position is up +86% YTD (and even more if I add the dividends to the total return).
My CTS.TO position is up +130% YTD.
My FSV.TO position is up +38% YTD.
Also, the first position that I took with GSY.TO touched a crazy 5x (+400%) last Friday, wow! That first position was small though, my current position is currently at "only" +248%.

Here's my sector diversification status, with my top 5 holdings in bold :

29.6% Tech
*11.99% CSU*
6.73% CTS
3.52% KXS
1.57% HAI
1.44% HBGD
1.30% TOI
1.26% BEW
1.11% REAL
0.68% RIWI

16.94% Consumer Cyclical
*8.67% BYD*
4.22% FOOD
2.81% RPI-UN
1.24% DOO

10.18% Industrials
5.46% CJT
1.73% TTR
1.33% AC
1.11% XBC
0.55% DYA

8.65% Healthcare
4.52% WELL
2.92% PHA
1.22% VMD

8.63% Energy
*8.63% SCL* (holding it until recovery, as I did with OVV)

8.48% Materials
*7.43% KL*
1.05% ERO

7.95% Financials
*7.95% GSY*

4.2% RE
4.2% FSV

3.12% Consumer Defensive
1.71% AHC
1.41% MAV

2.29% Global
2.29% DXG

Here's my market cap diversification status, with my top 5 holdings in bold :

21.71% Large Cap
*11.99% CSU*
*7.43% KL*
2.29% DXG

36.15% Mid Cap
*8.67% BYD*
*7.95% GSY*
5.46% CJT
4.2% FSV
3.52% KXS
1.44% HBGD
1.33% AC
1.30% TOI
1.24% DOO
1.05% ERO

30.33% Small Cap
*8.63% SCL* (holding it until recovery, as I did with OVV)
6.73% CTS
4.52% WELL
4.22% FOOD
2.81% RPI-UN
1.22% VMD
1.11% REAL
1.11% XBC

9.88% Micro Cap
2.92% PHA
1.73% TTR
1.71% AHC
1.57% HAI
1.41% MAV
0.55% DYA

1.95% Nano Cap
1.26% BEW
0.68% RIWI

*My current XIRR (MWRR) after 16 months of investing in this playground portfolio which started in mid-April 2020 is now at 53%.*


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## james4beach

MrBlackhill said:


> My current XIRR (MWRR) after 16 months of investing in this playground portfolio which started in mid-April 2020 is now at 53%.


That's pretty incredible. But this seems like a huge number of positions. Do you really have positions in all 29 stocks (or however many it is)?

I would think that, as it matures out of the fun & reckless phase, you'd need to have at least a $100k portfolio because your small positions are like 0.55% or $550 which are tiny, even with a $100k portfolio

Or maybe I'm missing something but it just seems like a ton of tiny positions


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## MrBlackhill

james4beach said:


> That's pretty incredible.


The performance so far is incredible, but biased by the fact that I started luckily at the right moment. About half of the cost basis of my portfolio is from mid April 2020 to June 2020 because I had cash on hand while the other half was spread over time as I gathered more money.

After all, NASDAQ did about +80% from April 2020 to August 2021, S&P 500 did about +60% and TSX did about +40%. But, yes, when calculating the XIRR/MWRR of my cashflows, it has beaten the indices.

Now my question is for how long. 3 months ago, my XIRR/MWRR was +58.5%. 4 months ago it was +65%. 6 months ago it was +73%. That's about as high as it went. And we can see that it's rapidly going back down to something more sustainable. I've seen my XIRR/MWRR dip below +50% some days. Will I still be above +50% at the 2-year anniversary of my portfolio? I doubt. Maybe above +40%. And how long will it stay above +30%? It all depends where I put my money next and what happens to the market.



james4beach said:


> Do you really have positions in all 29 stocks (or however many it is)?


Yes, I have 27 stocks and 2 ETFs. I plan to have no more than 30 stocks and no more than 5 ETFs. Ideally, I'd have between 20 to 30 stocks. Since I'm still playing around with my portfolio, I have maybe ~5 stocks which I bought to test some theories of mine, but if it doesn't work out, I'll certainly just let them be a tiny position or sell them and I'll stick to something more around 20 stocks. It's just because I didn't get rid of them now that they worth less than a thousand dollars. (RIWI & DYA)

Also, so far my Micro Cap and Nano Cap picks weren't my best stocks. I'll see if I just have to be patient a year or two or three, but otherwise I may decrease that exposure and stick to Small Cap or bigger.

One thing though, I don't want to split my money between USD and CAD since my portfolio is still below 6 figures and I want to optimize how much buying power I have for a stock. I want to be ready to buy and not wait for a Norbert's Gambit. But at some point I'll obviously start buying US stocks... So far I'm highly home-biased for simplification purposes. But once I'll start buying US stocks maybe I'll increase again to 30 stocks. Sure, I could've gone USD only also, but I chose CAD.



james4beach said:


> you'd need to have at least a $100k portfolio because your small positions are like 0.55% or $550 which are tiny, even with a $100k portfolio


Those 0.55% & 0.68% positions got dwarfed because they are my two worst positions at -55% & -62% while the reminder of my portfolio did more than +50%. Each of those two positions are actually about 2% of my portfolio's cost basis.

There are also some positions which now seem like a decent small position but they were initially just a few hundreds dollars that I've thrown in my very first purchases in mid April 2020 when I was shy, but since they've turn out to rise 3x to 5x, they are now a few thousands. Now I wish I hadn't be that shy, but I did the right thing and didn't risk too much at first as I was trying to figure this game.

At the very beginning I took positions of just a few hundreds, but since I have a $5 commissions I now try to take positions of no less than $1,000 unless it's an ETF (which are free to buy).


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## MrBlackhill

Today is a struggle, haha!

Lots of volatility during this earnings period. Funny how even if one of my holdings just dropped -23% in a single day, my portfolio dropped only -1.36%. Obviously, it's because it was a small position. The -4% drop in one of my big position is a bigger loss than that -23% drop in one of my small positions.

SCL is volatile as always. Again, as expected, since SCL soared in the recent days, it's now correcting back down with a -4% today.
CTS dropped -7% today, but do I really care when it's up +45% over the last 3 months?
WELL rose +5%. It hasn't moved a lot in the past few months. It's deciding its next move after soaring +400% in 2020.
MAV dropped -23%. Now, I'll have to do some DD to see if it's the perfect occasion to load up or if that position was a mistake. I'm still positive. But my entry point was the worst.
XBC dropped -8%. What a ride. At some point last year I was at +200%, now I'm at -7%. Should've sold during that huge momentum.
RIWI dropped -7%. This one is now at -66%, my biggest loser. Still curious how far it'll go, maybe I'll buy more at some point. But it's a nano cap and I don't want more than 2% of my holdings to be nano caps.

5 days ago I said my XIRR/MWRR was +53%. Now it's +51%. Will it dip below the psychological 50% again? Is this the slow decent to a more sustainable performance? This is fun!!


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## damian13ster

Yeah. Big in CTS as well. Actually added on the drop yesterday. Earnings wasn't a blowout but I think it was still very solid.
Another one I am happily in (cost basis at 4.9) is PKK. 
Can't really put my finger on it though. Their GM% is tiny, but revenues are sky-high and increasing at blistering pace.
Then again, it operates in China.
Thanks for the list! Will dig into those more next week. Love to get new ideas to kickstart research


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## MrBlackhill

damian13ster said:


> Thanks for the list


Keep in mind that I started this portfolio during the crash with small money (less than 6 figures) and I've tried out many different things "for fun" as I am trying to learn the best strategy that fits for me. I started picking stocks in April 2020, so I'm pretty new.

You may be interested by a few tests that I've started about "statistic-driven portfolios". We could also call them "hindsight-biased portfolios" but I'm trying to figure out how long does it take for hindsight to become a statistically meaningful.

Two threads :

Stock-picking, let's test it

All equity, high returns, low drawdowns


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## james4beach

CNBC is reporting that the average hedge fund this year is only up 11%. This does include some fees (let's say 3%) so maybe that means something like 14% before fees

Isn't it interesting that teams of professional experts can only get ~ 14% YTD while the S&P 500 is up 20% YTD

Stats like this, which we have repeatedly seen over time (and written about in academic literature) should make a stock picker ask why they think they can beat the index when even the professionals can't.

The truth is: hedge funds stink. Professional stock pickers and active managers stink. And the professionals are better than amateur retail.


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## MrBlackhill

james4beach said:


> CNBC is reporting that the average hedge fund this year is only up 11%. This does include some fees (let's say 3%) so maybe that means something like 14% before fees
> 
> Isn't it interesting that teams of professional experts can only get ~ 14% YTD while the S&P 500 is up 20% YTD
> 
> Stats like this, which we have repeatedly seen over time (and written about in academic literature) should make a stock picker ask why they think they can beat the index when even the professionals can't.
> 
> The truth is: hedge funds stink. Professional stock pickers and active managers stink. And the professionals are better than amateur retail.


First, you can't say that because YTD they haven't beat it that over a longer time span they won't. YTD is only 7 months. Lots of things can happen.

And... Maybe it's the other way around, maybe the index is getting overheated, maybe Michael Burry is right about the Index Fund Bubble*?

Think about this the other way. I've created multiple portfolios with hindsight bias that have been beating S&P 500 consistently for over 25 years. And YTD they are underperforming. Is it because my theory is wrong? A portfolio that systematically outperformed S&P 500 for 23 years out of 23 will suddenly underperform on the 24th year because I've identified it with hindsight bias?

Or maybe they've so much outperformed during 2020 that they're now having a healthy consolidation? But for the 2 years from 2020-01-01 to 2021-12-31 they will outperform?

Or maybe the S&P 5 is truly going on a bubble?


































* In a few lines, his argument is that too much passive investment is bad for price discovery. Imagine if everybody bought passive investments, how would the underlying stocks be valuated?


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## Jimmy

Those are good findings . The S&P 500 is really a poor index dominated by those 5 tech companies. I personally wouldn't want to own Apple which sells gadgets and is very volatile.

The TSX is also a horrible, unbalanced index too w oil and financials making up ~ 55% of the index and adds extra risk to a portfolio for meager returns.

If you buy those indexes you will have awful sector diversification and associated higher risk.

For proper diversification you at least need to look at ETFs w proper balanced sector and size weights. But proper stock picking as shown in studies in these threads and through investors is proven to be superior . The results are shown by Lynch, Buffet, MF, Gordon Pape etc

Even a donkey in customer service can generate 22% /yr following MF recs.


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## james4beach

Jimmy said:


> Those are good findings . The S&P 500 is really a poor index dominated by those 5 tech companies.


And yet, no active managers can beat this really poor index. Even the best and smartest hedge funds can't beat the S&P 500, over many years.


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## Jimmy

james4beach said:


> And yet, no active managers can beat this really poor index. Even the best and smartest hedge funds can't beat the S&P 500, over many years.


Who cares about useless hedge fund managers? . Active investors destroy them as you know. A donkey in customer service can easily beat them. 

As Mr B points out though is not only are the returns crappy over the long run, even more troubling is the indexes themselves are putrid for diversification. It is like you are gambling on S&P 5 stocks. Time to dump those putrid indexes and get some proper diversification.

Same for the TSX 60 which is crap for diversification unless you are an oil speculator too. Time to dump them both and start investing properly.

At least get some better ETFs.


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## MrBlackhill

james4beach said:


> And yet, no active managers can beat this really poor index. Even the best and smartest hedge funds can't beat the S&P 500, over many years.


And just before you make a comment about MF. I've calculated the MWRR of their monthly buy and sell over the past 7+ years for their Canadian picks and it's over 20% CAGR. Not even including the dividends.

Now I've finally found one very interesting article for you and me. I recall I keep saying that market-cap weighted index can't be optimal. Well, there's a paper about this. It isn't. And I recall that - like you've just said - you keep asking why active managers can't beat the index, I have more details about this also.









Beating The Market Is Simple But Not Easy


The capitalization-weighted stock market is among the worst ways to construct a portfolio, yet most investors and investment managers can't beat it.




www.forbes.com





It starts with a very interesting first sentence.



> An interesting paradox exists in investing: *the capitalization-weighted stock market is among the worst ways to construct a portfolio*, yet most investors and *investment managers can’t beat it*.


The first part in bold is what I keep saying and the second part in bold is what you keep saying.

Followed by:



> It is simple to beat the market (even simulated monkeys can do it) but it is not easy. Understanding the tension between the flawed nature of the stock market’s construction and why it is so hard to beat is a crucial mental model for all investors to understand.





> The cap-weighted structure has been at a recent advantage because the top-weighted stocks such as Apple and Amazon have been powerful performers for years. But this hasn’t always been the case. Over more extended periods, the weighting of the market to larger and more expensive stocks has led to underperformance relative to other methods of weighting stocks.





> with a cap-weighted index, “relatively overvalued stocks will be overweighted, and relatively undervalued stocks will be underweighted, whether or not we know which stocks are relatively undervalued, overvalued or fairly priced.” Thus, over time the cap-weighted market gives sub-par returns.





> A study by the Cass Business School in London illustrates the point. The researchers examined various ways to weight the top 1,000 stocks in the U.S. stock market for the period 1969 – 2011. Over this 42-year period the authors found that portfolios with alternative weightings such as dividends paid, cash flow, book value, and sales handily beat the capitalization-weighted market portfolio. The research also found that portfolios weighted randomly (so-called “monkey portfolios”) also outperformed the market.


Let's dig deeper into that study. Over those 42 years, the market cap-weighted is a significant underperformer compared to alternatives. The problem with most investors is their lack of confidence when they underperform. The market cap-weighted was the best performer during the 1990s. Guess why. Dot-com bubble. But otherwise, it isn't.










By the way, look at these ETF :

RWJ revenue-weighted for small caps and definitely outperforming its market cap-weighted index
RWK revenue-weighted for mid caps and outperforming its market cap-weighted index
RWL revenue-weighted for large caps but underperforming
Why revenue-weighted is underperforming for the large caps? Because S&P 5 is currently in a bubble. And due to the paradox that even a mega cap like AMZN is still growing insanely fast. But when you look at the outperformance in the small caps, it makes more sense because small caps growing revenues fast are usually the one that will perform well pretty soon, no matter their market cap. In fact, what is a small cap with big revenues? A small cap value, known for their outperformance.

But what if this is just pure randomness? Here's the distribution curve of randomly picked weightings. The monkey almost always outperformed the market. And they've also outperformed the alternatives about half of the time, or even more often, exception made of the sales-weighted which is definitely the best performer.









But we have to dig deeper again. The monkey weighting has bad risk-adjusted returns. It's pretty volatile. Yet, its Sharpe ratio is above the market cap-weighted, but below all the alternatives. What does that mean? It means that the outperformance of the alternative weighting didn't get their superior returns out of pure luck, as opposed to the monkeys.










And, you know, those are not the only alternatives that beat the index. Look at this study. And that's not only in the US.





















*But now your big question that remains : why do fund managers underperform?!*



> Beating the flawed market is so hard because it requires a long-term perspective and disciplined behavior. Case in point is the study by Cass Business School which revealed numerous multi-year periods during the 42 years studied where all of the monkey portfolios and all the factor-weighted portfolios underperformed the market, even though every one of these strategies significantly outperformed the market over the long term.





> What is true of simulated monkeys and factor-weighted portfolios is also true of active managers. A study by Vanguard found that 18% of active mutual fund managers beat their benchmarks over a 15-year period. Of these outperforming managers, 97% of them experienced at least five years of underperformance, more than 60% experienced seven or more years of under-performance, and two-thirds of these star managers underperformed for three or more consecutive years.


Let's dig deeper into the study.

The first struggle of fund managers is that almost half of them don't survive. Right there, that means that no more than 55% of funds can "outperform" because there's already 45% of them that didn't survive due to lack of interest from investors or lack of confidence due to poor performance during the first years following their inception.










What most investors don't get is that even the best funds had many years of underperformance. Almost all (97%) of the funds had at least 5 years of underperformance out of 15 years. If those years happen to be right after the inception, the fund may not survive because investors don't give it a chance. Investors are really hard on fund managers because they seek outperformance every year, they don't see the bigger picture of the manager's strategy.










And as if it wasn't enough, out of those 275 funds that survived and outperformed over 15 years, 181 funds (65%) had a least 3 consecutives years of underpformance. What if the funds that didn't survive weren't shut down? Maybe they would've outperformed, maybe they just had the bad luck to have 3 consecutive years of underperformance right after their inception.

There you go, here's you answer to why fund managers don't beat the index. It's not their fault. It's their investors' fault.



> Long periods of underperformance by outperforming strategies and investment managers is what leads to most investors underperforming. It’s extremely hard to stick with an investment strategy or manager through years of underperformance.
> 
> The problem is compounded by the fact that investment managers often can’t afford to stick with their outperforming strategies when they are out of favor. If a manager’s performance falls too far behind their benchmark (which is cap-weighted) many of their investors will leave, and they might go out of business.


The issue is pretty simple. We keep using a benchmark which is definitely not optimal and out of date, but since it's the most well-known benchmark with 100 years of data, people have built confidence upon something totally flawed. And since people are not patient and very stressed out when it comes to managing their money in a different way, they lack confidence and don't see the bigger picture over the long term, so they pull out their money out of a winning strategy that got out of favour for just a few years, a few meaningless years compared to an investment strategy that should last for decades.



> Knowing that the market is flawed but hard to beat is a vital mental model in our tool chest. As an investor, you should ask yourself if you can withstand experiencing lower returns than the market for long periods. Most cannot and should buy index funds so that impatience doesn’t lead to them underperforming the market along with the vast majority of others.





> Investors who have the discipline to stick with a strategy that may look horrible for years should consider investing in a fund that is weighted based on factors other than market capitalization.





> Investing with active managers who follow a proven strategy and have stock-picking skills is right for some investors. While these managers are hard to identify, many investors successfully use active mangers within a portfolio. This requires conviction, discipline, and an appropriate time horizon. Similar to factor-weighted portfolios, investors need the patience to withstand years of underperformance for even the best active managers.


----------



## MrBlackhill

No big update about my playground portfolio.

Well, there's MAV that dropped a lot. I'm now at -63%. I haven't bought more. This one will need more investigation. There's more than 80% insider ownership. I hope they are enjoying this ride...

RIWI and DYA are at -56% and -58% and I just let them be. I believe I bought RIWI too early after after IPO and I'd be willing to buy more after a bit more investigation because insiders have been constantly seeking. My fundamental analyst want strong enough. DYA was just a fun buy that I can let die if that's its fate, I don't care at this point.

AHC is now at -54% and I'm thinking about buying more, but, as for MAV, I'll do more investigation before.

REAL is at -49% but they are heavily buying back their shares, which I believe is very positive.

In about a month, I'll have more money to add to this portfolio and I'll have to decide where I put it. I'm excited! And... I may buy a new stock! But I have to think about it because I don't want to hold more than 30 stocks. I actually think I should reduce to 20.

My XIRR is currently 51%.

*Meanwhile... I've started a new reckless portfolio! Ha!*

Ok, so here's the thing. Last time, I made a bet with a very big lump sum that I couldn't afford to lose* and the investment timeframe was only a few months. So it was truly reckless, but I bought the dip of stocks such as BMO ($60), but with my lack of experience I also bought SU way too high and REI also too high. Unfortunately, I had to sell in October, right before the jump in November. Luckily, I did a good job at managing that portfolio's risk and I didn't lose any money _overall_.

Now the lump sum is much smaller, but I still don't want to lose money. It's money from the joint account, again. And the timeframe is 1 year.

Unconsciously, I ended up doing the same "diversification" than the last time. Only 3 stocks, 50/25/25.

But this time the selection process is totally different. I didn't buy large caps. We aren't buying the dip of a crash anymore. I actually bought 1 small cap and 2... micro caps. I haven't done well with micro caps, let's see if I can do better this time.

Again, I didn't do a very thorough DD about their CEO, management team, board, market, competitors, etc. I only looked at their fundamentals. And I'm still inexperienced.

I bought :

50% CTS.TO
25% TTR.V
25% PHA.V
*Please to not take my analysis below as an advice. If you are curious about those stocks, make your own analysis before reading further.*

CTS is a small cap, it's a tech stock and it's on a big momentum. In my playground portfolio I've made more than +200% with that stock. Why do I believe they aren't done yet? Well, they now have a market cap of $2B but they make over $1B in revenues, still growing fast. So their P/S is below 2 and they keep growing those revenues. They recently started to make profits, even though it's a tiny profit margin, I don't care because I'm more interested by their revenue growth at this point. Their debt ratios are very low. It's a company which make acquisitions and I like that. Also, they have 5% insider ownership and the insiders are actively buying. The president and the COO recently used their options grant and each got $7M worth of stocks at $9.20. Insiders are still buying at $10+.

TTR is a micro cap which is in the industry of freight and logistics. Land transportation. They recently started a small dividend, which made the stock jump and I bought the dip now that I believe it's stabilizing. I may be wrong. They have 35% insider ownership and institutions are barely in yet, with less than 1%. Insiders were buying in 2020 and early 2021. There was some huge insider sell in March, but I would've done the same when the stock soared after the dividend announcement. Again, lately this stock has been growing revenues pretty fast, now over $300M revenues for a market cap of only $136M. Their P/S is even below 0.5. And they are profitable with a P/E below 20 and soon excepted to be below 10. They have a bit of debt, but I feel like it's a decent level. It's also a company which make acquisitions.

PHA is a healthcare staffing service. They have been growing revenues pretty fast now at $43M revenues for a market cap of $71M. It's almost a nano cap. No institutional ownership yet, but 62% insider ownership. Insiders are buying. Their P/S is below 2 and they are profitable with a P/E below 30. Their debt level is decent and their margins are good. It's also a company which make acquisitions.

Again, I have a plan B. Such small stocks like TTR and PHA may take more than a year to make a move and maybe I'll want to keep holding them. Well, I could "transfer" them to my playground portfolio and cash in other shares in my playground portfolio for the withdrawal I have to make in a year. And if the whole market is down in a year, well I'll just pay with my LoC. And if I end up losing my money for real (as I believe will happen with some of my playground portfolio holdings), well I'll have documented my thought process here and I'll learn that it wasn't enough and that I need to upgrade my DD to the next level.

I bought those stocks on August 25 and 27. They are all up because I bought the volatility dip, so the portfolio is up +1.58% at the moment. But that's meaningless because those stocks are highly volatile.

_*I could afford to lose it because, to put things into perspective, it was worth only about 2 years of savings and the amount was less than my LoCs (I've always had LoCs but never used them) but losing that money would've certainly s*cked._


----------



## wayward__son

MrBlackhill said:


> Ok, so here's the thing. Last time, I made a bet with a very big lump sum that I couldn't afford to lose and the investment timeframe was only a few months. So it was truly reckless, but I bought the dip of stocks such as BMO ($60), but with my lack of experience I also bought SU way too high and REI also too high. Unfortunately, I had to sell in October, right before the jump in November. Luckily, I did a good job at managing that portfolio's risk and I didn't lose any money _overall_.
> 
> Now the lump sum is much smaller, but I still don't want to lose money. It's money from the joint account, again. And the timeframe is 1 year.


hey, i enjoy your posts and this is unsolicited advice so disregard at your discretion, but this is really really dangerous. even if this is all unlevered , taking equity risk on money that you truly need on super short timeframes like this can really blow you up. i am absolutely a believer that "Scared money dont make no money", but you have to survive first. especially in these crazy times of QE infinity and a taper that seems like it will never come -- knowing that anyone who can hold through volatility is probably going to come out the other end ok -- your number one priority is to make sure you never put yourself in the position of becoming a forced seller at the wrong time


----------



## Jimmy

They all look good. TTR looks interesting and has a lot of upside on Koyfin growing the past few years too. I know a BNN analyst liked them on Market call and TFI.


----------



## MrBlackhill

wayward__son said:


> but this is really really dangerous. even if this is all unlevered , taking equity risk on money that you truly need on super short timeframes like this can really blow you up


Thanks for your concern. The thing is... I don't *truly* need it in 1 year. It's more like a goal and a challenge. If I don't have it in 1 year, I'll still have enough money to cover the expense easily. And if I truly blow up (if those stocks end in the negative for years), well it's money I can totally afford to lose.

Last time was more reckless, but... I'd do it again, and better. Buying BMO at $60 which means a dividend yield of 7% on one of the big banks... I wasn't scared at all with that entry point. The entry points on the other stocks were just stupid. And, last time, even if I truly need that money, I had other options if things turned South.

I'm playing with a part of my money, not all of my money. And, last time, even if I had lost it all, it was worth no more than 2 years of savings (and less than my LoCs). This time it's barely half a year of savings.


----------



## wayward__son

k, sorry for the diversion. btw, microcaps arent my bag but i have found microcapclub.com to be good reading if you are looking for more resources.


----------



## AbleEng

I haven't read all these posts, but these data are not real are they? I mean the term playground is used alot.
If it is just phony money, where is the website to do this?


----------



## MrBlackhill

AbleEng said:


> I haven't read all these posts, but these data are not real are they? I mean the term playground is used alot.
> If it is just phony money, where is the website to do this?


I don't understand your question "where is the website to do this?" What do you mean?

Yes, the data is real. Real stocks, real money.

I use the term "playground" a lot so that you know you shouldn't copy the portfolio. It's just me having fun with my money. Me, as a beginner, and trying out things. With my risk profile.


----------



## AbleEng

MrBlackhill said:


> I don't understand your question "where is the website to do this?" What do you mean?
> 
> Yes, the data is real. Real stocks, real money.
> 
> I use the term "playground" a lot so that you know you shouldn't copy the portfolio. It's just me having fun with my money. Me, as a beginner, and trying out things. With my risk profile.


"*If it is just phony money*, where is the website to do this? " I was hoping to play as you do - at a website that provides the functionality, but with phony money.

You are a daring person. My best wishes for your success.


----------



## MrBlackhill

AbleEng said:


> "*If it is just phony money*, where is the website to do this? " I was hoping to play as you do - at a website that provides the functionality, but with phony money.
> 
> You are a daring person. My best wishes for your success.


Ah it was late night, I didn't read correctly. Many brokers offer simulations.


----------



## Spudd

AbleEng said:


> "*If it is just phony money*, where is the website to do this? " I was hoping to play as you do - at a website that provides the functionality, but with phony money.
> 
> You are a daring person. My best wishes for your success.


Here are a few options:





Open a Risk-Free Practice Account with RBC Direct Investing


Discover the features and benefits of a risk-free Practice Account at RBC Direct Investing. You can buy and sell investments, try new strategies and more without using real money.



www.rbcdirectinvesting.com









Free Practice Trading Account | Questrade Trading | API | Questrade


Try a free 90-day practice trading account to test drive the Questrade platform. Explore ideas on how to integrate your website via the Questrade API.




www.questrade.com









Open a practice trading account online | Scotia iTRADE®


Enroll for a Scotia iTRADE® practice account with a fictional portfolio worth $100,000 CAD/USD and you'll be able to try our investing tools risk-free




www.scotiaitrade.com


----------



## james4beach

Spudd said:


> Open a Risk-Free Practice Account with RBC Direct Investing
> 
> 
> Discover the features and benefits of a risk-free Practice Account at RBC Direct Investing. You can buy and sell investments, try new strategies and more without using real money.
> 
> 
> 
> www.rbcdirectinvesting.com


I have an RBC bank account and noticed this option, so I tried it out a few years ago. It had lots of bugs and was pretty useless.

Some of the positions I held went through corporate actions, and RBC didn't update the positions. Without the updates for the splits or takeovers, the fake portfolio doesn't reflect what would have happened with real shares so it was useless.

The position tracking also seemed very poor and inaccurate at times. I don't think dividends showed up properly. I don't know if the practice account has problems, or if RBC Direct Investing just sucks, but it left me with a poor impression of RBC DI.


----------



## MrBlackhill

Interesting! S&P Dow Jones announced changes to the S&P/TSX Composite Index. They've added 8 stocks and removed 1. Out of the 8 stocks, I already own 2 of them (CTS & WELL) and I was planning to buy DCBO which was also added.


----------



## MrBlackhill

I made a reckless move recently. It's not about _changing_ the strategy, but more about _adapting_ my strategy to the _evolution_ of my beliefs as a newbie investor. I sure want to _stabilise_ my strategy. I don't care if I end up underperforming the market, as long as I'm having _fun_. It's my _entertainment_.

So, I believe growth is becoming too big at the moment, now that the V-shape recovery euphoria is done, but that the market still continues to go up endlessly, I believe it could end badly in 1-3 years. Most likely in 3 years, but better safe than sorry.










Sold :

CSU.TO (half) [+62% in 17 months]
P/E 104.95
P/S 10.32
P/B 51.92
Large cap

BYD.TO (liquidated) [+28% in 17 months]
P/E 82.03
P/S 2.96
P/B 7.19
Mid cap

KXS.TO (liquidated) [+55% in 17 months]
P/E 142.84
P/S 23.93
P/B 18.24
Mid cap

FSV.TO (liquidated) [+41% in 8 months]
P/E 75.05
P/S 3.50
P/B 14.78
Mid cap

Bought :

DOO.TO
P/E 11.57
P/S 1.35
(P/B negative)
Mid cap

EQB.TO
P/E 9.24
P/S 4.20
P/B 1.49
Small cap

RAY-A.TO
P/E 13.05
P/S 2.03
P/B 1.95
Small cap

MKP.TO
P/E 5.78
P/S 4.58
P/B 1.30
Small cap

TTR.V
P/E 16.86
P/S 0.42
P/B 1.80
Micro cap

VCI.V
P/E 9.05
P/S 2.52
P/B 7.73
Nano cap

*Don't copy this portfolio.*

I'm seeing most of my <2% holdings as good as dead, but I'm too lazy to sell them. I'm curious about their future on the long term.

Here's my sector diversification status, with my top 5 holdings in bold :

20.59% Tech
*6.87% CTS*
6.22% CSU
1.58% TOI
1.42% HAI
1.32% HBGD
1.30% BEW
0.95% RIWI
0.94% REAL

16.19% Financials
*8.91% GSY*
4.27% MKP
3.01% EQB

15.42% Industrials
5.57% CJT
4.57% TTR
2.86% VCI
1.18% AC
0.79% XBC
0.47% DYA

14.68% Consumer Cyclical
*8.50% DOO*
3.54% FOOD
2.65% RPI-UN

8.67% Energy
*8.67% SCL* (holding it until recovery, as I did with OVV)

8.34% Materials
*7.28% KL*
1.07% ERO

7.89% Healthcare
4.16% WELL
2.64% PHA
1.08% VMD

4.23% Communication Services
4.23% RAY-A

2.23% Global
2.23% DXG

1.89% Consumer Defensive
1.13% AHC
0.76% MAV

Here's my market cap diversification status, with my top 5 holdings in bold :

15.72% Large Cap
*7.28% KL*
6.22% CSU
2.23% DXG

28.11% Mid Cap
*8.91% GSY*
*8.50% DOO*
5.57% CJT
1.32% HBGD
1.18% AC
1.58% TOI
1.07% ERO

40.14% Small Cap
*8.67% SCL* (holding it until recovery, as I did with OVV)
*6.87% CTS*
4.27% MKP
4.23% RAY-A
4.16% WELL
3.54% FOOD
2.65% RPI-UN
1.08% VMD
0.94% REAL
0.79% XBC

10.82% Micro Cap
4.57% TTR
2.64% PHA
1.42% HAI
1.13% AHC
0.76% MAV
0.47% DYA

5.12% Nano Cap
2.86% VCI
1.30% BEW
0.95% RIWI

*My current XIRR (MWRR) after 17 months of investing in this playground portfolio which started in mid-April 2020 is now at 50%.*


----------



## james4beach

MrBlackhill said:


> I believe it could end badly in 1-3 years. Most likely in 3 years, but better safe than sorry.


What if we're in the early stages of a mega growth environment, where stocks (especially growth) perform like crazy for the next decade or more?

It's very hard to time this kind of thing. This is why people often say that tactical trading can work in the short term, but tends to not work over the longer term.

A few years ago, when my growth stocks starting outperforming, I thought it can't possibly last. I think maybe 2016 or 2017 was an incredibly good year for my stock picks. And I thought that surely was the end of it.

But I would have never guessed that it would just keep continuing, with this last year being another stellar year. It's just so hard to predict this.


----------



## MrBlackhill

You decide.


















Growth versus Value Investment History Says Fight Allure Of Growth Stocks


Many investors, especially those with limited investment experience, are declaring that value investing is dead. If one’s investment experience runs over the last ten years, who can blame them? Since 2010, growth stocks have outperformed value stocks, on average, by 6.11% a year. If one’s...




www.seeitmarket.com





















Growth vs. Value Equities Insights | Touchstone Investments


Explore timely insights on growth vs. value. We evaluate historical data and statistical relationships to identify drivers or signals related to performance.




www.westernsouthern.com


----------



## OneSeat

Value stocks, at least the larger ones as represented by IUSV, have outperformed Growth stocks (IUSG) since the turn of this century. Way outperformed for the first decade when growth stocks were in the critical ward but less so more recently. 

I still think one of them will be a good buy - just don't know which one  - please tell me.


----------



## MrBlackhill




----------



## james4beach

OneSeat said:


> I still think one of them will be a good buy - just don't know which one  - please tell me.


Really it's best to buy an ETF, since these automatically track value stocks. So if you believe in the value stock story, then you can try something like IJS ... iShares small cap value

It won't always outperform, but the theory says that over the long term, it should.


----------



## OneSeat

james4beach said:


> "IJS" won't always outperform, but the theory says that over the long term, it should.


It has outperformed IUSV (large value stocks) over the last 20 years, 10 years and 1yr specific intervals but not over any other periods that I checked. Rightly or wrongly I think small caps can be very profitable for specific short periods but I'm not smart enough to know when in advance. But I'm not an expert - I just prefer large stocks - Jumbos are safer than Cherokees.

MrB is far better at analysing small stocks than I am. My above comment "one of them (IUSV or IUSG) will be agood buy" was meant as a joke!


----------



## james4beach

OneSeat said:


> My above comment "one of them (IUSV or IUSG) will be agood buy" was meant as a joke!


I didn't realize it was a joke!

There really is academic theory that says that small cap value stocks "should" outperform the large cap index over the VERY long term.

Now whether you believe that academic theory is up to you. Personally I'm not on board with it, and I'm mostly in large caps. But someone who believes in it can use an ETF like IJS to accomplish that.


----------



## MrBlackhill

OneSeat said:


> MrB is far better at analysing small stocks than I am.


That's yet to be proven, ha! I don't expect outperforming small cap value indexes on the long run. And anyways I'll continue picking some growth for momentum. As long as I'm having fun stock-picking, I'll continue, no matter the performance.



OneSeat said:


> But I'm not an expert - I just prefer large stocks - Jumbos are safer than Cherokees.


That's the reason why large caps on the long run will underperform small caps though. Behavioral bias. People have higher expectations for well-known bigger caps and lower expectations for boring unknown smaller caps. Due to that, there's more mispricing in smaller caps.

Check out IJS, VBR, AVUV, RWJ, etc. You don't have to be an expert if you pick ETFs instead of stocks. Just buy the ETFs that win on the long run. This is not a financial advice though, there's no better advice than following your own beliefs and what fits your risk profile.


----------



## MrBlackhill

If this is not the greatest opportunity to buy the dip of small cap value, I don't know what it is.


----------



## damian13ster

That's certainly an interesting chart; however, I think there are valid reasons for the drop.
With coronavirus pandemic, government got heavily involved and did everything they can to kill smaller business.
It isn't a coincidence that large caps flew - environment was created that benefitted solely them and legislators killed competition.
Don't know if there ever will be recovery. Just listen to some conference calls of small retailers. Their cost is sky-rocketing and amazon is just tightening the bolt. You think that amazon increasing their minimal wage is for a good of heart?
No - they know that by increasing wage inflation, they will kill any remainder of competition they have.


----------



## james4beach

MrBlackhill said:


> If this is not the greatest opportunity to buy the dip of small cap value, I don't know what it is.


That was the picture as of mid 2020, back when Small Value was very low versus the broad market.

But they rallied like crazy since then so I think that ship has sailed.


----------



## MrBlackhill

james4beach said:


> That was the picture as of mid 2020, back when Small Value was very low versus the broad market.
> 
> But they rallied like crazy since then so I think that ship has sailed.


Not sailed yet.

On this graph, above 1 means growth is getting expensive, below 1 means value is getting expensive. When the line is moving up, it means growth should be outperforming value. When the line is moving down, it means value should be outperforming growth.

You are pointing out that little downside move from September 2020 to June 2021, but we're still way above 1.


----------



## MrBlackhill

Well, that nano cap VCI which I bought a week ago is currently at +24% and I'm wondering if I should just take my quick (lucky) gains before a cool down or let it run. I wanted to hold it long so I'll let it run.

It's lucky and unlucky because I had another order waiting to be filled because I wanted to add more for another account and it obviously never got filled.


----------



## Spudd

MrBlackhill said:


> Well, that nano cap VCI which I bought a week ago is currently at +24% and I'm wondering if I should just take my quick (lucky) gains before a cool down or let it run. I wanted to hold it long so I'll let it run.
> 
> It's lucky and unlucky because I had another order waiting to be filled because I wanted to add more for another account and it obviously never got filled.


You could add a trailing stop at say 5% below current price.


----------



## MrBlackhill

MrBlackhill said:


> Oh, I'm mistaken, I bought NVA.TO when it was trading at $0.80. It was a contrarian bet for a recovery, but then I decided to dump it and buy SCL.TO instead, which was a better choice, so far


Well, now I know that I should've kept that $0.80 NVA.TO instead of selling to buy SCL.TO at $1.80.

If I had swing traded SCL.TO, I would've done great. Heck, it soared +150% one week after I bought it, but then crashed back down.

But now that I've just held the position for so long, SCL.TO is at $5.80 (+222% from $1.80) but NVA.TO is at $5.12 (+540% from $0.80), so I would've made twice more money if I had kept NVA.TO.

But I'm not done yet with SCL.TO. I believe there's still much more upside to come. But I don't think it'll double from here, so my switch from NVA.TO to SCL.TO will remain a bad decision.

Sure I'm complaining that I've only 3x my money instead a 6x, nice problem to have...

Also, due to my lack of confidence, I sold OVV.TO too early.

That COVID situation has definitely made the energy sector one of the greatest opportunity ever in the past decade.

As a total newbie, I was same to 3x and nearly 4x my money on energy stocks in less than 2 years. I could've even 6x my money. And we're not done yet. So imagine if I had been an experienced energy investor...


----------



## MrBlackhill

Ouch! KL.TO is one of my big positions and is getting acquired by AEM.TO. KL.TO is currently down -9%.


----------



## Spudd

MrBlackhill said:


> Ouch! KL.TO is one of my big positions and is getting acquired by AEM.TO. KL.TO is currently down -9%.


That is crazy. Normally getting acquired is a big boost to the stock price. I wonder why AEM was able to acquire them at a discount.


----------



## MrBlackhill

Having some fun today. I wanna move towards small cap value.

I sold:

KL (-2.82% overall since I started buying in mid-April 2020)
FOOD (+20% in 4 months)
CJT (+50% in 16 months)
I bought:

DBM
NWC
EIF
TXG
We'll see how it goes. I have a few more stock ideas but unfortunately I'm out of money at the moment.

With the recent market drop (which I expected, if you read my posts on this forum), my MWRR dropped to +44%.



Spudd said:


> That is crazy. Normally getting acquired is a big boost to the stock price. I wonder why AEM was able to acquire them at a discount.


Yeah, seems like a merger deal. I'm out. Liquidated KL for a small loss. I'll continue my gold miner adventure with TXG. Hopefully it'll be the right decision.


----------



## MrBlackhill

Certainly had a few lucky moves recently.

+12% in 10 days








+34% in 1-3 months








+8% in 10 days








+13% in 1 month








What about the other stocks that I recently bought? They are between -2% and +2%.

What about the stocks that I sold? They've moved between -5% and +2%, exception made for KL which moved up but not as much as TXG which I bought as a replacement.

Certainly got lucky when selling some tech.















I'll use keep using the word "lucky" even though I was expecting most of those moves, but I don't want to build overconfidence with my expectations so I'll call it luck.

Note: These are highly volatile stocks, so that may be the reason for those gains in a short period of time, it may just be volatility and it may come back down, but still, if my goal were to swing trade, I would've been on the winning side with these recent trades.


----------



## Jimmy

I did a review of Canadian stocks from data from Wallmine and Titanium was near the top for value for the growth. LT it looks to grow more at 14% /yr but had some massive returns this year.


----------



## MrBlackhill

MrBlackhill said:


> Certainly had a few lucky moves recently.


And on the downside, I'm still kicking myself for selling OVV.TO too soon back in May. Sold for a +270% gain, but if I had held it would've been a +500% gain.

I'm also not proud of myself for taking a big position on DOO.TO too early, right after the jump in September. I knew from technical analysis it would most likely go back down, but I managed to irrationally convince myself "what if it doesn't". Well, there you go, it dropped -7% today.

Otherwise, I'm pretty happy for the moment with the small reckless portfolio that I've started on the side (holding CTS, TTR, PHA, MKP, DBM).

On my personal playground portfolio, I've just put an order to try to buy more MAV.TO. I've lost -65% on that position, due to buying at the peak. I'm not learning my lesson and now I'm trying to buy the bottom. Let's see how it goes. _EDIT Oct-27: There you go, I've just added to my losers. MAV had lost more than -60%, AHC also and today I've added to both of them. Maybe I'm not learning my lesson and I'm just giving away free away to the market._


----------



## Spudd

MrBlackhill said:


> On my personal playground portfolio, I've just put an order to try to buy more MAV.TO. I've lost -65% on that position, due to buying at the peak. I'm not learning my lesson and now I'm trying to buy the bottom. Let's see how it goes. _EDIT: There you go, I've just added to my losers. MAV had lost more than -60%, AHC also and today I've added to both of them. Maybe I'm not learning my lesson and I'm just giving away free away to the market._


Ouch, MAV down 9% today. I also hold this dog. It was a dog ever since I bought it (1.75 years ago), then it recovered over my buy-in price and I was so happy. Then they announced that they weren't going to sell the company and now I'm down 57%. I don't even see a reason for it to be down. Just randomly down 9%. Bad timing for you, but hopefully it'll make a comeback after the quarterly earnings. Who knows.


----------



## MrBlackhill

Spudd said:


> Bad timing for you


Not too bad actually as I played within that drop, I bought at $2.30 and we've just closed at $2.32, hehe...

But I was trying to figure out if it would go back down to $2.20 or $2.10 after that recent spike at $2.75. And I'm hoping for $2s to be the bottom.

I was so unlucky buying at $6.90 in February during those upwards stairs when it reverted to a falling knife that I hope this time I'll be luckier and catch it at the bottom.

I've heard about that mess in leadership, but at that price MAV feels so cheap. Maybe the change will be for the better.


----------



## MrBlackhill

Well, that's funny.

In my playground, I have some penny stocks that I bought for fun. One of them was bought with very little analysis, it's DYA. I don't recommend that stock, I was just having fun. It then slowly lost down to nearly -70%. Today, it suddenly jumped +43%. It actually moved +75% in the past 5 days. It most likely jumped on news. I was at -70%, now I'm at -42%. Fun stuff. Surprises every day. That stock was down to my lowest weighting with all that money lost, it was down to something like 0.5% of my holdings. Yet today it's the main reason why my portfolio ended with a positive gain.

Now I'm curious if the news will generate a momentum stronger than all of those who have been holding that dog for too long and waiting for a chance to exit. It may crash back down soon enough.



MrBlackhill said:


> I bought NVA.TO when it was trading at $0.80. It was a contrarian bet for a recovery, but then I decided to dump it and buy SCL.TO instead, which was a better choice, so far.


Seeing NVA.TO currently trading above $6 (I would've made 7.5x), it turns out that on the longer run buying SCL at $1.80 (now trading above $5) wasn't the best decision. Interestingly, NVA has a very low P/E but SCL has very low P/B and P/S. Maybe SCL will jump at some point, but NVA made a move earlier.


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## MrBlackhill

Am I being lucky or am I skilled at increasing my chances of being lucky?

You know that AHC.TO stock that I bought in January 2021 at $4.95/share? I was pretty unlucky to buy at the peak of a momentum, as the stock has then dropped -65% throughout the months and then last week, I felt like we were hitting the bottom and I decided to go contrarian and double my position on one of my worse performers because I felt like it was way undervalued. Because it was cheaper, it turns out that I bought 3x more shares than what I had bought initially.

And then guess what... News today that the stock may be acquired for $4.50/share by a private company, a +172% premium to the current price. And since I added to my position which significantly decreased my average cost per share, I'm now somewhere between +60% and +71% returns on that stock.

What I don't get is why it's not trading at $4.50/share, but I guess it's because the acquisition deal is not settled yet, so there's still a risk. But now we know that at least one company believes that stock is willing to buy it at $4.50/share.

Now, what do I do? Do I sell right away a bit below $4.50/share or do I wait for the deal to close and get $4.50 cash for each of my shares? I think I'll wait, I want to see the full process.


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## hboy54

MrBlackhill said:


> Now, what do I do? Do I sell right away a bit below $4.50/share or do I wait for the deal to close and get $4.50 cash for each of my shares? I think I'll wait, I want to see the full process.


I know nothing of the particular stock. In 2009 I had this happy event which drove the particular holding to 22% of portfolio so I sold half and waited on the other half. So portfolio weighting might be a consideration.

Another consideration is when does it close? Likely next year. Maybe for personal reasons you might prefer the capital gain in this tax year.

Congrats.


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## Spudd

MrBlackhill said:


> What I don't get is why it's not trading at $4.50/share, but I guess it's because the acquisition deal is not settled yet, so there's still a risk. But now we know that at least one company believes that stock is willing to buy it at $4.50/share.
> 
> Now, what do I do? Do I sell right away a bit below $4.50/share or do I wait for the deal to close and get $4.50 cash for each of my shares? I think I'll wait, I want to see the full process.


I normally sell right away to crystallize my gains. There are a few things that can happen now - another company can come in with a higher competing bid, which will cause the price to go up. Or the company that made the offer can discover some issue while they're doing the due diligence to finalize the deal, and back out, which will cause the price to plummet. 

The advantage to waiting is there's no commission when it gets bought out by a corporate action like this, and there's a chance that you'll get a higher price than you currently anticipate. 

The disadvantage to waiting is the risk that the deal will fall apart and take your paper profits with it.


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## MrBlackhill

Yeah decided to sell instead of waiting "just for the fun of living through the whole process".

Now I'm trying to figure out where do I distribute those gains, ha. (What do I buy now)


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## MrBlackhill

MrBlackhill said:


> Am I being lucky or am I skilled at increasing my chances of being lucky?


AHC.TO turned out to be a winning bet, but MAV.TO continues to be a dog, and even more since their last ER. Interestingly, there's insider buying. I'm very curious what will happen next.


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## Spudd

Yeah, MAV is killing me, LOL. Luckily, my cost basis is <$400, and the current value is $100, so when it nosedives 20% it costs me 20 bucks.


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## MrBlackhill

MrBlackhill said:


> Seeing NVA.TO currently trading above $6 (I would've made 7.5x), it turns out that on the longer run buying SCL at $1.80 (now trading above $5) wasn't the best decision. Interestingly, NVA has a very low P/E but SCL has very low P/B and P/S. Maybe SCL will jump at some point, but NVA made a move earlier.


Man I should stop looking at NVA.TO which keeps pushing new highs, now above $7. Considering that I bought it for $0.80 in 2020 it would be at 9x, and maybe my first 10x in less than 2 years. I'm still hoping SCL will catch up its loss, but the process is slow and the recent ER made people dump it. I'm not buying more because it's already a big position in my portfolio.


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## MrBlackhill

Little update about my portfolios.

My main playground portfolio took a hit over the last month and lost -10%. Over time, and due to that hit, my MWRR finally starts dropping. It's currently at +33% since mid-April 2020.

About my playground portfolio composition at the moment:

Sectors

18% tech
18% finance
15% industrials
13% materials
11% cyclicals
9% health
7% defensive
7% energy
3% communication
Market caps

48% small caps
27% mid caps
12% micro caps
8% nano caps
5% large caps
Style (most growth styles are for momentum) [based on Morningstar, I use B for Blend, but for single stocks the in-between Value and Growth is called Core instead of Blend]

31% SCB
27% SCV
20% MCG
10% SCG
5% LCG
5% MCB
Top holdings (DO NOT buy stocks based on this list, I'm having FUN with those positions, this is NOT a financial advice)

SCL
GSY
TXG
MKP
DOO
CTS
DBM
CSU
VCI
RPI-UN
WELL
EQB
EIF
MAV
TTR
RAY-A
PHA
NWC
BEW

I also mentioned previously that I started a reckless portfolio. It also took a hit because it has only 5 positions and one of them lost -43% from my entry point. Yet, the whole portfolio of only 5 stocks is down by only -5%. I'd even say that I'm eager to buy the dip on that stock.

So far so good, I enjoy the entertainment it provides.

Oh, I started a RESP for my kid. I don't stock-pick his RESP. Here's what I did:

50% VVL (global value)
34% ZEM (emerging markets)
16% VMO (global momentum)


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## Spudd

I understand the V and G suffixes for your styles but what is B?


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## MrBlackhill

Spudd said:


> I understand the V and G suffixes for your styles but what is B?


Blend (the ones in-between Value and Growth [or a blend of value and growth when talking about a fund]), based on the Morningstar's scoring methodology. Well, they call it "Blend" when it's about a fund and they call it "Core" when it's about a single stock, so actually I should write SCC, MCC and LCC instead of SCB, MCB and LCB.


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## MrBlackhill

MrBlackhill said:


> My main playground portfolio took a hit over the last month and lost -10%.


The positive note though is that when I decided to sell lots of stocks to buy other stocks, most of the stocks I sold lost much more than the ones I bought.


FOOD lost -53% since I sold
BYD lost -20% since I sold
CJT lost -15% since I sold
KL lost -8% since I sold
KXS lost -8% since I sold



MrBlackhill said:


> I sold:
> 
> KL (-2.82% overall since I started buying in mid-April 2020)
> FOOD (+20% in 4 months)
> CJT (+50% in 16 months)
> I bought:
> 
> DBM
> NWC
> EIF
> TXG


Meanwhile

DBM made +15% since I bought
NWC made +8% since I bought
TXG made +1% since I bought (well... better than KL's -8%)
EIF lost -7%, which is better than CJT's -15%


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## MrBlackhill

MrBlackhill said:


> My current XIRR (MWRR) after 17 months of investing in this playground portfolio which started in mid-April 2020 is now at 50%.


So, I was wondering how fast my MWRR could revert to the mean and drop to something more sustainable. With the few recent changes in my portfolio and the fact that I've also added a lot of money recently, my playground portfolio is officially in a big drawdown at the moment. Obviously, I'm holding some very volatile stocks and over the past month the market has been quite volatile. But on my side, it hasn't been ups and downs, it's been only downs mostly.

Three months ago, I said my MWRR was +50% after 17 months, now my current MWRR is at +30% after 20 months. I've calculated that if I had put the same money in my favorite selection of ETFs, the MWRR would be no more than +24% at this point, so I'm technically still ahead.

Here's the graph of the portfolio gains (realized + unrealized) since I started it in mid-April 2020.

Let's see what happens next.


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## MrBlackhill

MrBlackhill said:


> Three months ago, I said my MWRR was +50% after 17 months, now my current MWRR is at +30% after 20 months. I've calculated that if I had put the same money in my favorite selection of ETFs, the MWRR would be no more than +24% at this point, so I'm technically still ahead.


MWRR now at +35% after 21 months. If I had used my favourite ETFs, I'd be at +32%, so I'm technically still ahead, but not by much. And that’s with limited exposure to Energy stocks, even though I believe Energy will continue to outperform, but I don’t buy too much of it due to my convictions. (Even though I bought more during the crash for the easy money...)


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## james4beach

MrBlackhill said:


> MWRR now at +35% after 21 months. If I had used my favourite ETFs, I'd be at +32%, so I'm technically still ahead, but not by much.


I've seen something interesting happen in the last few weeks. Until now, my individual stock picks were outperforming the TSX index (my benchmark) by a lot. But I have lost all of that outperformance over a quick few weeks.

The last I checked, my picks are more like "on par" with the TSX index over the last year. That's not terrible but it does show... easy come, easy go. For example one of my largest holdings, DSG, is now in a 21% drawdown! And another large position FSV in 15% drawdown.

Of course the age old question with these active strategies / stock-picking is whether one sticks with it when it's underperforming. If you have any hope of beating the index, you have to be able to tolerate underperformance at times.


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## MrBlackhill

james4beach said:


> But I have lost all of that outperformance over a quick few weeks.


Yeah same thing happened to me. This is the graph of my gains and during November 2021 I had something like -15% drawdown in a matter of weeks. It erased all my gains since June 2021. Still haven't recovered. It's decreasing my MWRR substantially


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## MrBlackhill

MrBlackhill said:


> Three months ago, I said my MWRR was +50% after 17 months, now my current MWRR is at +30% after 20 months.


Currently at +30% MWRR again after 22 months.

YTD I haven't lost any money, as opposed to the US market.

But I'm still on a drawdown from last year.

I'll be curious to see how my portfolio will react to the first rate increases, which should happen in March.

But I guess the current volatility is due to the market pricing that expectation, as we can see with the 13-week yield slowly moving up.


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## Jimmy

The market usually has the next 6 months already priced in. The big drop was the market accepting 10 yr yields were going to be around ~ 2% at YE including all the rate hikes for this year. IMO. I think we are in for a slow and gradual rise for the rest of the year. There maybe another small drop of a few % if they start talking about more rate hikes in 2023 than now planned.

I pounded many names on the dip and can't wait. Many tech names have price targets of 100+%. Most are rolling in nice earnings except some older names like Paypal and Meta. Absolute Software and Twillio jumped 22% today on earnings beats.


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## james4beach

MrBlackhill said:


> Yeah same thing happened to me. This is the graph of my gains and during November 2021 I had something like -15% drawdown in a matter of weeks. It erased all my gains since June 2021. Still haven't recovered. It's decreasing my MWRR substantially


I'm still seeing weakness in my stock picks. At this point I think my individual stock portfolio is basically made up of growth and momentum stocks (using factor terminology). Both of these factors were strong until November, then reversed strongly downward.

How are yours looking? I think I'll be going whichever way growth & momentum go.


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## MrBlackhill

james4beach said:


> I'm still seeing weakness in my stock picks. At this point I think my individual stock portfolio is basically made up of growth and momentum stocks (using factor terminology). Both of these factors were strong until November, then reversed strongly downward.
> 
> How are yours looking? I think I'll be going whichever way growth & momentum go.


My stocks haven't moved, they are stuck in the current market volatility. My portfolio keeps moving up and down since November.

I'm at -2% YTD. Considering that NASDAQ crashed -14% YTD, I managed to avoid this growth crash because I moved towards more value.

And my portfolio is still in its drawdown from last year's high in November 2021. But that's not correlated to market movements. One of my stocks jumped like crazy, so I sold to take the profits. But then I used the profits to buy a stock which kept falling. Bad karma, haha!


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## MrBlackhill

So it turns out that my reckless playground portfolio of stocks have lost only -5% in 2022. I guess it was greatly helped by one of my stocks returning +180% in 2022. I also had stocks doing +10%, +20% and +30% and a few stocks going flat, but obviously I also had stocks dropping -20% to -50%.

Obviously I haven't sustained the +30% MWRR that it had after 22 months. It's now only +15% MWRR after 33 months. It will certainly be much less after 2023...


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