When we buy and sell

Discussion of the proposed Cashback Investment Club

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garindan
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Re: When we buy and sell

Post by garindan » Sat Mar 12 2016 6:22pm

magnificent7 wrote:Me as a new potential member of the club asks:
Me: "I'm interested in joining the Cashback Investment Club. So what have you sold?"
CIC: "Sainsbury's."
Me: "That great, how much profit did you make?"
CIC: "We didn't, in fact we made a loss."
Me: "OK, you guys carry on, don't mind me, I just had too much time on my hands and thought I would pop the question."
CIC: "That's fine. If you change your mind please contact me."
Me: "Yeah, no problem. Bye (F-O-R-E-V-E-R)."

I appreciate that - though we do have to hope that for every share we might sell at a loss we will hopefully be selling at least sufficient other shares on balance to cover the loss. It is not all about one share trade. We have to consider the bigger picture over a longer period :)
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Re: When we buy and sell

Post by Richard Frost » Sat Mar 12 2016 6:35pm

garindan wrote:
magnificent7 wrote:Me as a new potential member of the club asks:
Me: "I'm interested in joining the Cashback Investment Club. So what have you sold?"
CIC: "Sainsbury's."
Me: "That great, how much profit did you make?"
CIC: "We didn't, in fact we made a loss."
Me: "OK, you guys carry on, don't mind me, I just had too much time on my hands and thought I would pop the question."
CIC: "That's fine. If you change your mind please contact me."
Me: "Yeah, no problem. Bye (F-O-R-E-V-E-R)."
I appreciate that - though we do have to hope that for every share we might sell at a loss we will hopefully be selling at least sufficient other shares on balance to cover the loss. It is not all about one share trade. We have to consider the bigger picture over a longer period :)
I do understand what you are saying. But it is not about one share. There is a portfolio of shares. At the moment none have been sold. On balance the portfolio is at about break even, for me that is. Some of the earlier members may be carrying a small paper loss, although dividends may have made up for that. Given the state of the stock market generally, I reckon that's not a bad position to be in. With the amount I have invested I do not think I would have done better putting it in a savings account. Probably would have spent it.
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Re: When we buy and sell

Post by Beachboy » Sat Mar 12 2016 6:39pm

William Joseph wrote:
richard@imutual wrote:
richard@imutual wrote:It doesn't have to be 5, but I think as a club we have to have some view as to what the optimal number should be.
So what does everyone think the right number is?
I hate to be at odds here, but I am not sure there is a right number. I am convinced 5 is too low. As has been mentioned we could be selling a good share because we have such a small maximum amount we can hold at any one time. We could set a maximum amount of shares we want to hold eg:10 or even 15 or 20 but do not have to hold that amount. I would have thought that within that limit there was plenty of scope to play and hold on to good performing shares. Also helping with the excitement.
My current thoughts are similar to William Joseph with regards this issue. I am not sure having a limit that forces the sale of a share purely on the based on an imposed cap when it might be ticking over ok (e.g. hasn’t lost significant value, paying an ok dividend etc.) or has the potential to pick up again after a bit of a slump seems unnecessary. I would prefer to see our selling decisions based on factors such as: we feel we have optimised any short term profit; we are limiting potential loses; we are selling to unlock funds because we feel we have insufficient and great opportunities are passing us by etc
William Joseph wrote: However to get back to topic I do think we should set a limit for when we sell shares

a) to avoid the need for a poll
b) to avoid the call from a small amount of members to sell a share when it is seen to be making a small loss, when it could be that it is paying a good dividend or has a reasonable potential.

We need to decide this for each share when it is bought giving some leeway. ie: Share xyz has lost 8% which is our selling point but the dividend is due next week. Perhaps it may be sensible to hold on for the dividend. A fine line as it might lose more than the dividend due in the meantime.

As for buying, I think we seem to have got this about right at the moment. eg: suggestions. then poll followed by buying the share. Perhaps the poll could take into account a potential sell percentage as well.
I can see some merit with this approach. Also I would suggest having the option to have a discussion and possible poll where we have held a share for some time and it has trundled along without doing anything spectacular and we feel that we want to say breakeven and/or take a minimal profit/loss (factoring in fees, dividends etc).

With regards a couple of other topics in this thread:

Re keeping money in the bank – whilst I don’t want us to be completely reckless part of the fun of a share club is own, buy and sell shares and so I would be against this as a general principle with a preference for having money invested in shares.

Re the very specific discussion about when to sell Sainsburys – we have held this for a while and it has not performed perhaps as well as we would have liked but it has not been disastrous. It has provided some dividends and more recently the share has bounced back a little from its initial slump. Therefore whilst my ideal preference would be for us to sell this one in the near future and try our luck with another share I see no great need to sell at a loss. This is because it is not like we have a great opportunity pressing at the moment and ideally would like to see us hopefully breakeven and/or make a small profit.
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Re: When we buy and sell

Post by BeautifulSunshine » Sat Mar 12 2016 8:07pm

William Joseph wrote:
garindan wrote: I appreciate that - though we do have to hope that for every share we might sell at a loss we will hopefully be selling at least sufficient other shares on balance to cover the loss. It is not all about one share trade. We have to consider the bigger picture over a longer period :)
I do understand what you are saying. But it is not about one share. There is a portfolio of shares. At the moment none have been sold. On balance the portfolio is at about break even, for me that is. Some of the earlier members may be carrying a small paper loss, although dividends may have made up for that. Given the state of the stock market generally, I reckon that's not a bad position to be in. With the amount I have invested I do not think I would have done better putting it in a savings account. Probably would have spent it.
I too am V-E-R-Y pleased with the progress we are making as a club. Our statistics will improve considerably on 14/04/2016 once both GSK and RDSB dividends have been paid.

In accordance with my latest calculations including the dividends the CIC will post a profit almost every week from Q4 2016 onwards. That is impressive considering we are a "baby" club.
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Re: When we buy and sell

Post by BeautifulSunshine » Sat Mar 12 2016 8:10pm

The CIC Holding Summary is relevant to this discussion, I have done my weekly number-crunching and the results are below for your perusal.

Interestingly, SBRY is only £10 in loss and £4 in profit including dividend.

Today, 12/03/2016, the Cashback Investment Club [Holding Summary] is:

TOTAL
Quantity: 1086
Cost: £3126.39
Commission: £26.25
Stamp: £14.58
Monthly Subscription Fee: £25.20 (14 x £1.80)
Total Fees: £64.23
Total Cost: £3192.42

Total Dividends: £69.38

Today's Cost: £3192.42 - £69.38 = £3123.04
Today's Value: £3025.99
Profit/Loss: -3.10% (-3.56%), -£97.05 (-£111.46)
Underdog commentary:
Today, including the dividends and fees we are down -3% (-3%), -£97 (-£111).

1. SHRE is -36% (-33%), -£73 (-£68)...[Financial Services]...[N/A]
2. UU. is -6% (-4%), -£36 (-£26)...[Gas Water & Multiutilities]...[FTSE100]
3. SBRY is -1% (-4%), -£10 (-£23)...[Food & Drug Retailers]...[FTSE100]
4. GSK is -4% (-6%), -£27 (-£38)...[Pharmaceuticals & Biotechnology]...[FTSE100]...[Ex-Dividend]
5. ITV is -6% (-8%), -£42 (-£51)...[Media]...[FTSE100]
6. RDSB is 9% (9%), £58 (£61)...[Oil & Gas Producers]...[FTSE100]...[Ex-Dividend]

Worthy of note, SHRE has fallen.

UU. has fallen.

Next we move to the soap opera that has been played out between SBRY and Argos owners Home Retail Group. A new company has also made a bid for Argos and interestingly they have offered more money for the asset.

SBRY has risen. Below is the share price of SBRY over the last week:
Image

Within the CIC there is much debate about whether or not to sell SBRY at a loss, further information can be found in this thread:
viewtopic.php?p=156194#p156194

For the record, today, SBRY is only £10 down excluding the dividend. The CIC has received £16 dividends from SBRY, consequently the share is overall in profit.

GSK has risen. GSK is ex-dividend. The double dividend including a special bonus dividend of 23p is 43p. Therefore, 38 X £0.43 = £16.34 is to be received by the CIC on 14/04/2016.

ITV has risen.

RDSB has fallen and is up an impressive 9%. RDSB is ex-dividend so soon after our purchase. Our first dividend from RDSB is due, 42 X 47cents = $19.74 on 29/03/2016. It will be interesting to see how the currency conversion changes this figure once converted to pounds sterling (GDP).

Overall it has been a mixed week.

The imutual Cashback Investment Club has incurred an additional Share.com monthly of £1.80, bringing the total Share.com fee to £25.20.

Today, the imutual Cashback Investment Club has received just shy of £70 in dividends and has incurred £55 in fees. Hence, our dividends have comfortably exceeded our fees.

Note:
This summary includes all fees and dividends.
Figures in brackets are last weeks values.
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timco
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Re: When we buy and sell

Post by timco » Sat Mar 12 2016 10:17pm

I would like to see how we are performing without the SHRE shares included because I think we may be up without these and we are not holding these as a share to own (although not sure what discount we get for holding them but have we lost money compared to trading without owning them?) but because of the discount they bring.

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Re: When we buy and sell

Post by BeautifulSunshine » Sat Mar 12 2016 11:06pm

timco wrote:I would like to see how we are performing without the SHRE shares included because I think we may be up without these and we are not holding these as a share to own (although not sure what discount we get for holding them but have we lost money compared to trading without owning them?) but because of the discount they bring.
As you wish and before bed today's summary with SHRE excluded:
Today's Cost: £2988.92 - £66.28 = £2922.64
Today's Value: £2952.49
Profit/Loss: +1.02% (+29.85%)
Quids in, excluding SHRE, we are up ~£30.
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Re: When we buy and sell

Post by BeautifulSunshine » Sat Mar 12 2016 11:06pm

underdog wrote:
timco wrote:I would like to see how we are performing without the SHRE shares included because I think we may be up without these and we are not holding these as a share to own (although not sure what discount we get for holding them but have we lost money compared to trading without owning them?) but because of the discount they bring.
As you wish and before bed today's summary with SHRE excluded:
Today's Cost: £2988.92 - £66.28 = £2922.64
Today's Value: £2952.49
Profit/Loss: +1.02% (+29.85%)
Quids in, excluding SHRE, we are up ~£30.
And that's before the next two dividends are due with about a month totalling ~£40.
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Re: When we buy and sell

Post by BeautifulSunshine » Sat Mar 12 2016 11:09pm

Taking into account the special rationale for the purchase of SHRE, I propose we, the imutual Cashback Investment Club exclude SHRE from the Cashback Investment Club [Our Current Holdings] weekly summary?
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Re: When we buy and sell

Post by Richard Frost » Sat Mar 12 2016 11:13pm

underdog wrote:Taking into account the special rationale for the purchase of SHRE, I propose we, the imutual Cashback Investment Club exclude SHRE from the Cashback Investment Club [Our Current Holdings] weekly summary?
This was discussed previously and it was agreed it should be included. Individuals can do the maths if they feel the need. I thought there was to be a simplification of the way reports were made. Just one weekly report from the treasurer. When will that happen?

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