#portfoliothoughts

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My Approach to Investing

Summary

I focus my efforts on small and mid-sized companies searching for those where the growth prospects are not reflected in the share price. I am disciplined about the valuation I am prepared to pay; I don’t like to pay over 20x forecast earnings and favour companies that are paying a growing dividend and have a prospective dividend yield of at least 2.0%. I search for companies generating strong cash flow and if not having net cash, then debt levels that is low to moderate. Where possible I like to meet management and understand what makes them tick and if they have a decent stake in the business so much the better; our interests are aligned! I like companies that are beating expectations and earnings forecasts are being upgraded. Ultimately I am looking for the “double whammy” that comes from a re-rating and from faster than expected earnings growth. Having found a potential investment I look at the share price chart as it can help with timing; so often resistance and support levels work. I size a position based on my assessment of the potential Risk and Reward of the stock. I hold between 20 and 30 holdings, making use of investment trusts for overseas or thematic exposure.

The most important number to me is the return of the Portfolio! I try not to get too emotionally involved with individual companies; if I cut a holding and it immediately bounces, so be it. All that matters is the return of the Portfolio, each month, each year, each decade!

I invest principally in the UK

I invest mainly in UK stocks as that is where I have gained my experience. There are clearly opportunities to invest in overseas companies, and it is fair to say that it is now much easier to get the information you need. I think that for a private investor, such as myself, with limited time resources, it is better not to spread my net too wide. For me, it makes sense to focus my efforts on a market where I have experience and familiarity.

I focus on mid and small-sized companies

I focus on mid and small-sized companies but not exclusively.

The FTSE 100 Index comprises the largest 100 companies and by value accounts for around 70% of the UK market, The FTSE 250, (the next 250 companies) accounts for about 25% of the market by value, and the FTSE Small Cap, FTSE Fledgling and FTSE AIM, the remainder.

The table below shows the percentage returns over 1, 3, 5, and 10 years to 31st December 2020

My Approach to Investing

Summary

I focus my efforts on small and mid-sized companies searching for those where the growth prospects are not reflected in the share price. I am disciplined about the valuation I am prepared to pay; I don’t like to pay over 20x forecast earnings and favour companies that are paying a growing dividend and have a prospective dividend yield of at least 2.0%. I search for companies generating strong cash flow and if not having net cash, then debt levels that is low to moderate. Where possible I like to meet management and understand what makes them tick and if they have a decent stake in the business so much the better; our interests are aligned! I like companies that are beating expectations and earnings forecasts are being upgraded. Ultimately I am looking for the “double whammy” that comes from a re-rating and from faster than expected earnings growth. Having found a potential investment I look at the share price chart as it can help with timing; so often resistance and support levels work. I size a position based on my assessment of the potential Risk and Reward of the stock. I hold between 20 and 30 holdings, making use of investment trusts for overseas or thematic exposure.

The most important number to me is the return of the Portfolio! I try not to get too emotionally involved with individual companies; if I cut a holding and it immediately bounces, so be it. All that matters is the return of the Portfolio, each month, each year, each decade!

I invest principally in the UK

I invest mainly in UK stocks as that is where I have gained my experience. There are clearly opportunities to invest in overseas companies, and it is fair to say that it is now much easier to get the information you need. I think that for a private investor, such as myself, with limited time resources, it is better not to spread my net too wide. For me, it makes sense to focus my efforts on a market where I have experience and familiarity.

I focus on mid and small-sized companies

I focus on mid and small-sized companies but not exclusively.

The FTSE 100 Index comprises the largest 100 companies and by value accounts for around 70% of the UK market, The FTSE 250, (the next 250 companies) accounts for about 25% of the market by value, and the FTSE Small Cap, FTSE Fledgling and FTSE AIM, the remainder.

The table below shows the percentage returns over 1, 3, 5, and 10 years to 31st December 2020

ABOUT ME

I launched this website in January 2012 so that I could share with other investors how I manage my investment portfolio; the JIC Portfolio.

There is complete transparency with the current portfolio and all transactions shown. I explain all trades through my blog and hope the site provides food for thought to more experienced investors as well as helping those who are new to managing their own portfolios. I believe JohnsInvestmentChronicle is unique: There are plenty of “tipsters” who will remind you of the “good ones” and quietly forget the disasters; I do not have that luxury as the Portfolio is there for all to see, backed with real money; mine! I have to confront my mistakes and deal with them; there is no hiding place! Above all, this is a true expose of the trials and tribulations of a private investor!

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One year since the 2023 low in UK Aim, mid-caps, small-caps and the JIC Portfolio!

One year since the 2023 low in UK Aim, mid-caps, small-caps and the JIC Portfolio!

One year since the 2023 low in UK Aim, mid-caps, small-caps and the JIC Portfolio!

#portfoliothoughts

Oct 28, 20242 min read

Catch up with John Hughman (recorded yesterday) and a brief comment on Serica Energy.

Catch up with John Hughman (recorded yesterday) and a brief comment on Serica Energy.

Catch up with John Hughman (recorded yesterday) and a brief comment on Serica Energy.

#portfoliothoughts Yesterday, in addition to listening to the Serica Energy results presentation, I chatted with John Hughman, formerly...

Apr 25, 20241 min read

Observations!

Observations!

Observations!

#portfoliothoughts I have just read the Herald Investment Trust 2023 Accounts. I was alerted to the following text in the manager’s...

Feb 23, 20243 min read

Funds' Portfolio - Thoughts

Funds' Portfolio - Thoughts

Funds' Portfolio - Thoughts

#portfoliothoughts

Dec 18, 20233 min read

A torrid start to October

A torrid start to October

A torrid start to October

#portfoliothoughts

Oct 6, 20235 min read

Current thoughts on my positions - Part II

Current thoughts on my positions - Part II

Current thoughts on my positions - Part II

#portfoliothoughts

Jul 12, 20235 min read

Current thoughts on my positions - Part I

Current thoughts on my positions - Part I

Current thoughts on my positions - Part I

#portfoliothoughts

Jul 11, 20236 min read

Just buy the NASDAQ?

Just buy the NASDAQ?

Just buy the NASDAQ?

#portfoliothoughts The other day I was asked whether one should give up stock picking and just buy the NASDAQ. The question is because...

Jun 19, 20234 min read

Stop losses and all that! Introduction of "Falling Price Reviews"

Stop losses and all that! Introduction of "Falling Price Reviews"

Stop losses and all that! Introduction of "Falling Price Reviews"

#portfoliothoughts

May 19, 20234 min read

Definition of a Bear Market

Definition of a Bear Market

Definition of a Bear Market

#portfoliothoughts

Apr 28, 20233 min read

Market/Portfolio thoughts

Market/Portfolio thoughts

Market/Portfolio thoughts

#portfoliothoughts

Mar 15, 20232 min read

JIC 2023 Stock Competition Entries

JIC 2023 Stock Competition Entries

JIC 2023 Stock Competition Entries

#portfoliothoughts

Jan 9, 20231 min read

Commodity Exposure - How has it performed?

Commodity Exposure - How has it performed?

Commodity Exposure - How has it performed?

#portfoliothoughts #commodities

Oct 24, 20222 min read

All-Weather Portfolio - makes sense for some investors

All-Weather Portfolio - makes sense for some investors

All-Weather Portfolio - makes sense for some investors

#portfoliothoughts

Sep 29, 20223 min read

Thumbnail thoughts on each holding Part III. Stocks 11-15

Thumbnail thoughts on each holding Part III. Stocks 11-15

Thumbnail thoughts on each holding Part III. Stocks 11-15

#portfoliothoughts

May 17, 20226 min read

Thoughts!

Thoughts!

Thoughts!

#portfoliothoughts

May 10, 20223 min read

Annual Review of Dividend Income

Annual Review of Dividend Income

Annual Review of Dividend Income

#portfoliothoughts

Mar 18, 20221 min read

Thoughts and a few more charts

Thoughts and a few more charts

Thoughts and a few more charts

#portfoliothoughts #fundsportfoliocomment

Mar 7, 20222 min read

Thinking out loud, again - Ukraine!

Thinking out loud, again - Ukraine!

Thinking out loud, again - Ukraine!

#portfoliothoughts

Feb 24, 20223 min read

Fundsmith - Reduced to 4.0% of Funds' Portfolio

Fundsmith - Reduced to 4.0% of Funds' Portfolio

Fundsmith - Reduced to 4.0% of Funds' Portfolio

#fundsportfoliotrade

Feb 16, 20221 min read

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