KBC – This was all going to plan earlier in the year when a proposal for a restructure was launched by Geoff Wilson, where the investment could possibly be realised at NTA.

Behind the scenes the Wylie group sold a significant stake to Bentley, who had their own plans with Nicholas Bolton, and the share price has been sick ever since. I had been warned about this stock that the Bolton stake could make things difficult, yet invested on the premise that the Wilson and Wylie stakes made this a relatively safe play. Despite this loss I do not regret too much getting involved here. I think what happened with that stake being sold to Bentley was a little left field. The regrets I do have though is my position size should have been smaller given who was on the share register, and I also should have immediately sold at least half on the Wilson restructure announcement. There was liquidity around but it was a little sus the shares were not even stronger around this announcement. I had the opportunity to reduce my position size and sell part at a good profit but didn’t take it. I sold some not long after but not enough. Eventually I got out and it is a fair bit weaker than my exit levels.

HHY – I sold my position here at 11 cents but should have waited to exit in the range of 12 to 12.5 cents. At the time of selling I reasoned that the discount to NTA had closed in from around 20% to under 10%. Later, there was plenty of volume going through at NTA of 12.5 cents even. What was occurring was that both Keybridge (in particular) and Wilson were happy to pay much closer to NTA to get them more voting power here in their other battle. I should have foreseen this happening.

TTS – I had a buy order in just above $3.50 and spoke about this earlier in the year and it probably traded within a few cents. Then as late as October the same thing occurred. I put this down to monitoring too many holdings at times so I wasn’t focused enough on it. It is a plan of mine to slowly get to running a more concentrated portfolio than I have been recently.

RIS – This was a small company I noticed Mercantile had a major investment in that looked very promising and one that they could well launch a bid. I have followed Mercantile closely and they do make their fair share of takeovers. It was a small company though and not very liquid. Yet I can say I was in the buy order screen twice in the year or two prior to a takeover. Once around 15 cents from memory and then later 20 cents. They were taken over this year at 35 cents. With the lack of liquidity, I wasn’t sure it was that likely I would get the chance to buy. For that reason, I didn’t apply as much research to the stock in the first place. It was only much later that I ended up spending the necessary time researching to get more comfortable. If I had of devoted that time in the first place, I think I could have followed through and got the stock I wanted easily enough well below 20 cents.

Coffee – This was an unusual position where I made some solid quick gains, yet if I had of stuck to the plan when entering then the gains should probably still be being let run in the order of 30% plus rather than less than 10%. Around the time of Brexit, I got a bit carried away with the negativity because I had some shorter term put options on the indices which were starting to work. I then figured there could be more downside and tightened the stop on this position and just got whipsawed out. Since then Robusta Coffee has resumed a solid upward trend again as I initially forecast.

Brexit & put options – When the VIX sees levels of around 12 and we are in a very long bull market I reasoned some buying of protection may be a good idea. Even if it expires worthless it may assist in still playing on more long positions and participating in the latter stages of the bull market. That is, keeping up with surging indices, but without taking as much overall risk. As I bought some options late April, to see the VIX then double by late June and those options in the money, well I should have closed some out at good gains. Even if it was to replace them just with index shorts. Soon after Brexit the VIX went back down to those low levels again!


It may be a little too early to draw any, but themes I am giving more thought to are..

  • If a current holding still looks OK value, don’t rush to sell because of a fear a market correction may erode some gains. Other measures perhaps to ponder are running a few indices shorts, or put options on the major equities indices (when volatility is priced low) instead. For a small part of the portfolio I should have the confidence to back myself that my long ideas can outperform the indices. As a private investor still managing modest amounts compared to institutions I have an advantage of being able at times to get into ideas in stocks with quite small market caps. Also perhaps when I am in a stock that I am sitting on decent gains but could still have a lot of upside potential, I should consider running a trailing stop.
  • Be more diligent in following up plans. I feel opportunities like RIS, TTS, Apple slipped from me not being organised enough.
  • In terms of being more organised, I may be better off therefore running more concentrated positions. I don’t want to kind of half monitor some potential buys, with a mindset I might take a smaller position later. In these cases, perhaps I should decide early on to do the research or not. Then if I do the research and it stacks up I can then act more decisively.
  • Running more concentrated positions will need to involve getting to know some stocks far more in depth than I have in the past. A couple of stocks I got wrong in RNY & KBC I noticed I built up positions when working in the finance industry full time and not spending us much time on my own portfolio. I need to spend more time on my larger positions going forward.
  • Whilst I consider myself a contrarian, I seemed to have got carried away by market sentiment in a few cases. I refer to the negativity surrounding the AUD and some mining stocks early in the year, and how far share markets may fall at that time, and again shortly after Brexit. It is still an objective of mind to spend far less of my time wrapped up in watching the markets and my portfolio fluctuate throughout the day whilst reading and watching the financial media. Time saved here can be instead more productively used in reading the company annual reports more closely I suspect.

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