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The Random Portfolio: June 2009

June 26th, 2009 · Greg Atkinson · 1 Comment

Since April the Random Portfolio has continued to slowly rise in value but has yet to remain in the black for an extended period of time. However there are a number of stocks in the portfolio which have performed extremely well and these prove that even in the worst of bear markets,  money can still be made from investing in stocks.

The best performing stock in the portfolio so far has been Riversdale Mining (RIV) which is up now around 55% and this is a pretty good return for a stock only held for 8 months. Another good performer has been Challenger Financial Services Group (CGF) which is up around 27% and this shows that there has been money to be made by buying into battered financial stocks. (risky for sure, but potentially very profitable)

The worst performing stocks are Macmahon Holdings Limited (MAH) down around 60%, DUET Group (DUE) down 47% and One Steel Limited (OST) down approximately 25%. Although MAH has not done well it does look like an attractive stock at current prices with a P/B ratio of 0.79, a P/E ratio of 11.85 and an ROI of nearly 20. This will be an interesting stock to watch for the rest of the year.

Shareswatch Random Portfolio (as of 25th June 2009)

Portfolio Value $95,800.66 (initial investment $100k)

random-portfolio-june-09

Although the portfolio may finish the end of the financial year in the red it is still not doing too badly considering it simply a random group of stocks thrown together in October 2008  and before the market probably bottomed out in March 2009.  I am quietly confident that by the end of this year the portfolio will be in positive territory and that it might even outperform what cash would have returned over the same period.

Comments and Notes:

  • Current unrealised loss: -$4,176.21. In April the unrealised loss was nearly $7k and in January just over $24k.
  • Woolworths (WOW) continues to trade in a pretty narrow range and is demonstrating the characteristics we would expect from a defensive type stock.  Coca-Cola Amatil (CCL) is also another defensive type stock that is also now trading ina fairly narrow range.
  • Platinum Asset Management (PTM) and Challenger Financial Service Group (CGF) continue to trend upwards and reflect a bit of a recovery across many financial related stocks.
  • Duet Group (DUE) and Macmahon Holdings (MAH) show that investing in a bear market can be a risky business. These stocks appear headed lower and are the main reason the overall portfolio is in negative territory.
  • Gunns Limted (GNS) seems to be moving around depending on the status of the proposed new pulp mill in Tasmania. This stocks could move in a big way either up or down at this stage depending on how things turn out regarding that mill.

Although we have seen the S&P/ASX All Australian 200 fall back somewhat since mid June the overall upwards trend is still intact. If this trend is maintained then the Random Portfolio should also creep upwards and may even remain in positive territory from August onwards.

Remember this portfolio of stocks that will be held for years  so it is still early days. Even so the portfolio is now heading in the right direction and is showing signs or recovery as is the wider Australian stock market.

Please note this Random Portfolio is NOT meant as an endorsement or recommendation of any of the stocks contained within it.

The Shareswatch Random Portfolio is a random selection of stocks from the ASX 200 range of companies. For further details regarding how it was constructed please see: The Random Portfolio


1 response so far ↓

  • 1 Greg Atkinson // Jun 30, 2009 at 8:38 pm

    As of the end of FY08/09 the Random Portfolio was down 1.61% but things are heading in the right direction. It seems quite possible that the portfolio may provide a reasonable return in 2009…fingers crossed 🙂

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