Marcus Padley’s Perfect Portfolio Checklist
You may have seen my recent video on Livewire – they sat me down and said “Talk about anything you like”. So we talked about the portfolio assessments I do for financial planners and here is the result if you haven’t seen it.
CLICK HERE to download the 9-point checklist e-book.
There have been a few emails and comments. I might answer some of them here (apologies to the authors but I have edited the questions for brevity):
MEMBER EMAIL: Fantastic video! In 22 minutes Marcus condensed and even simplified similar lessons I learned in the last four months, from reading Munger, Graham, O’Shaughnessy. Best part was the “how to create your own algorithm”. I think I understood all the how to search for All Ordinaries index companies data, 2 years history and 3 years forecast of earnings growth (or dividends growth), select all companies with 5 years of uninterrupted earnings growth, filter by larger caps, and then filter by ROE; however I’m struggling with the most basic part, obtaining the base data, I tried googling different keywords, looked into ASX and MarketIndex websites, in case they had some downloadable Excel or CSV file containing companies with their past earnings and dividends, but maybe I’m being naïve in thinking I can get this info for free and this is only available through brokers or a fee-paying information service? Any suggestions?
MEMBER EMAIL: I watched the new Marcus video, and just after the 9 minute mark, Marcus talks about analysing a spreadsheet for 5 years of earnings growth, and 5 years of dividend growth. Is Marcus talking about the All Ordinaries Spreadsheet published each weekend, or another spreadsheet I don’t have access to? If it is the All Ordinaries Spreadsheet, I’m struggling to find this information. I can see EPS Growth in columns Q, R and S. Should there be another two columns of earnings growth (whether they be actual or predictions) somewhere? Also, Marcus talks about colouring blue and red for earnings growth. In the spreadsheet I download (not every weekend, but most), there is no colouring in columns Q, R and S (or, for that matter, from column L to column AC inclusive, but maybe they don’t need to be coloured). Should the heading for Column S read 2018 and not 2017? I don’t see any dividend information in the spreadsheet apart from current yield details in columns V, W and X. And, yes, I’m waiting for that 20% correction, too. Maybe the 15% or so from August to December last year is as good as we will get, unless we get a much bigger correction if (when) Trump doesn’t get re-elected. We’re safe so far, there hasn’t been a lower low on the weekly chart as yet.
REPLY: I have been asked by a few Members to make some changes to the ALL ORDS SPREADSHEET that are now long overdue (only so many hours in the day). I will add in the earnings and dividend growth columns – because no, it’s not available. The spreadsheet I have been referring to does not currently exist, it’s just what we use internally. But I can put a lot of it on the ALL ORDS SPREADSHEET for you all allowing you to do the sorting I talk about in the video. Will try and get to it this week and sorry to the other Members for taking so long to sort your requested changes.
MEMBER EMAIL: Not being rude but there are some points I’d like to raise from your Livewire interview. You say invest in ETFs, buy international shares, buy growth stocks but you don’t have ETS in the growth portfolio, you don’t have international shares and growth portfolio, and you sold everything recently. If I was to buy international shares which ones would I buy. If I was to buy LICs for growth which ones would I buy. Just re-subscribed so do like your service.
REPLY: The Growth Portfolio is an all equity portfolio not a balanced fund. It provides Members with stock ideas for the equity portion of their investments. If we were running a balanced portfolio it would have international and maybe some ETFs. We have also bought back into the market recently…the ‘precipitous risk’ moment appears to have passed – if it comes again we will cash up again. On international shares – we do hold individual international shares for some (mostly larger) clients but most self-managed portfolios we see focus on index matching ETFs for an international exposure (the S&P 500 ETF the most popular). Have a look on the ASX website for ETPs (links below) for all the passive options to gain exposures to international. LICs are active not passive and rely on the skills of a fund manager – you need to assess them on track record and mandate (what they invest in) – there is no general answer about which LIC for growth – they are all different. Again they are all listed on the ASX website under ETPs and that page provide links to each LIC website so you can read about them using the ASX site as a central hub.
Here are the links to the ASX lists of Exchange Traded Products (which includes LICs and ETFs).
MEMBER COMMENT: The Marcus Padley article/video was outstanding, particularly the “compounding capital gains” strategy. Have been doing it for years with astounding results but, it requires a lot of personal hard work, ongoing learning, time, research with an active, vigilant, diligent and disciplined trading/investing approach. All worthwhile. Otherwise, hand it over to a suitable professional like Marcus Padley. Have been a subscriber of Marcus Today for over a decade, excellent and comprehensive newsletter which has continued to improve over time. Probably one of, if not the best around. The bottom line with all these type of newsletters is “stock picking”, that is, does it have relevant and timely information and guidance that helps you buy and sell the right stocks and the right time resulting in maximizing the amount of profit that’s right for you.
REPLY: Thanks Tony I’ll send the $50 today.
MEMBER EMAIL: I am intrigued by how some share prices change abruptly without any news from the company. The ASX also puts out Speeding Tickets but the answer is very plain. For example GXY today has gone up 7% without any news from the company as far as I can tell. Insider trading is unlawful so what makes the stock jump 7%? I am sure a number of your members feel the same way.
REPLY: It may sound silly but the share price of smaller stocks jump because someone buys – why they buy is anybody’s guess – illiquid stocks do this. There doesn’t have to be a reason why someone buys and asking for 100% transparency is optimistic. We used to see it all the time when I was an institutional stock broker. We simply got a big order from an institution and it moved the price. It doesn’t come with an explanation. There is no right to know why someone decides to buy. To call it insider trading suggests someone knows something you don’t and its unfair. They almost certainly think they know something but that’s their business and it is rarely inside information. More likely it is simply their judgement/analysis/guesswork and they are entitled to it and to act on it and you are not entitled to know why they did what they did. Plus, they may well be wrong and it might be time to do the opposite, that’s life. Its normal. Its not a conspiracy, its not a Machiavellian plot, its just the stock market.
We have gone ahead put the 9-point checklist into a convenient E-book for you to enjoy.
Want to hear more from Marcus? Sign up for a 14-day free trial to Marcus Today