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Discussion in 'Listed Investment Companies (LIC) and Trusts (LIT)' started by austing, 19th Sep, 2016.

  1. austing

    austing Well-Known Member

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    @orangestreet, put beautifully. You've done me out of a job by the look of it:). Makes me feel almost mushy when I read stuff like this:oops:.
     
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  2. OscarBravo

    OscarBravo Member

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    I love the story about Anton going to the aquarium during the tech bubble. Must have been pretty tough sticking to your process and almost watching your business fold.

    I have a few LIC holdings and chip away at them when they trade at discounts etc. Seems to work out ok.
     
  3. austing

    austing Well-Known Member

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    I just posted a little about that in the QVI thread just now. I really like Anton and IML's investment philosophy. I view IML as an honest mgr compared to many others around.

    QV Income Limited (QVI)
     
  4. Il Falco

    Il Falco Active Member

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    This kind of investing is like a flywheel starting from a standing start.......not much at first but once it gets spinning a different story. I think one of the real keys here is to ensure ownership structure from the outset is set up right. Discretionary trust, then adding a corporate beneficiary to compound free of top up tax (using the franking credits from LIC dividends) and continue the snowball effect.
     
  5. twisted strategies

    twisted strategies Well-Known Member

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    unwillingwillis ,

    I am very diversified across shares , notes/bonds/hybrids , ETFs , REIT, and LICs
    however the topic is LICs , so I will focus

    top LICs held ( by $value )
    1. CDM
    2. CAM ( which will probably move to No. 1 after CAMPA convert about April 2017 )

    also held in (Alphabetical order)

    AOD , BKI , CIE , IBC , OZG , WAX , and WIC

    and in theory SOL is a LIC at least in attitude

    CDM is about 2% of my total holdings . ( but a top 10 holding )

    now the logic behind the selection ( at the time ) some have more than on purpose )

    WIC and OZG were bought for the WA small/mid cap focus ( both are DRPed so shares paid as divs count the most )

    CAM and CDM were bought (partly ) on the international share focus

    CAM and IBC were bought ( partly ) on hybrid/notes focus

    SOL is worth its ($$$) as a company research subscription ( I hold several 'Milner stable' shares partly courtesy of SOL shareholder newsletter insights )

    CDM ,WAX and AOD are held for their active , opportunistic approaches

    BKI and CIE are recent ( this year ) purchases aiming to beef up my XJO exposure but still target growth stocks

    my buy in price ( rather than NTA ) is important to me .

    I DON'T expect a LIC ( or share ) to be good at every thing all the time , but I DO expect to do very good when conditions suit them nicely ( I will be buying when they are discounted because of unfavourable investment climates )
     
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  6. twisted strategies

    twisted strategies Well-Known Member

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    I find it hard to find suitable international shares to invest in ( timing and pricing )

    I deliberately bought REC during the takeover process to accept INM shares , but LICs ??

    they often buy 'popular shares' to hook the punters .

    add to that if you can't research the portfolio shares deeply you are ( IMO) buying them as a ForEx play .

    where I can I prefer dual listed shares ( directly held ) HGG ,TME , AIZ etc.
     
  7. Hodor

    Hodor Well-Known Member

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    Something completely different to most here.

    Very interesting, will have to have a closer look and ask some questions.
     
  8. twisted strategies

    twisted strategies Well-Known Member

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    i had ( instant ) wealth forced ( inherited) on me

    AND when i was burning out ( very late 2010 and mid-50s )

    it was either learn to invest or buy a very nice Ferrari , and have the greatest week in my life ( LOL)

    for a person who lived live for the current minute , this is HARD WORK but i made the choice and so i have to live with it .

    now don't feel too bad i am blessed with incredible luck ( the one-eyed , three-legged dog type ) which is perfect for financial investing .

    caught between can't afford to fail , and the need to aggressively grow ( i reckon i need to triple the original inheritance AND generate income fund in less than 10 years .. just over 3 years to go )

    but other members might style find a useful hint .

    i see LICs as a supplement to other investments ( investing where i have little experience and difficulty getting cost effective access

    i was initially doing very well with fixed interest securities , but was redeemed/converted out of the good ones ( HBSHA , MQCPA both paying over 10% pa )

    i missed the GFC ( financially ) so was hoping for a double bottom in 2013/2014 ( an epic fail )

    tripling would have been easy with a basic experience and low share prices , but was not to be .

    now one thing i do some don't seem to do , is read the shareholder newsletters and think about the contents

    most of these guy/girls have decades of experience (,maybe i can learn something new from them , and sometimes do the exact opposite ... the fundies in the LIC are my insurance against absolute failure

    as example CDM has gone heavy on MLB , while i didn't like the direction change and exited in a fair profit ( about 12% + divs )
     
  9. twisted strategies

    twisted strategies Well-Known Member

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    unwillingwillis,

    * My biggest worry is if I should buy more DUI or get some WHF!! *

    not something different ???

    i am currently looking at BST and FSI ( and others ) looking for 'the growth factor '

    i also participate in DRP schemes ( most of the time )

    remember these decisions ,are what you have to live with .

    this is only a 'right for you ' positive solution

    if you decide to participate in DRP scheme the frequency of divs becomes important
     
  10. austing

    austing Well-Known Member

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    Do you check the NTA performance history of LICs prior to investing in them? Eg such as page 10 (1st column NTA) of the following report. Check out Clime for example.

    http://naos.com.au/wp-content/uploads/2016/08/LIC-201606.pdf
     
  11. unwillingwillis

    unwillingwillis Member

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    I think I'll stick to my low cost 'boring' LICs. Dont know anything about BST or FSI. I'm sure they will be far too exciting for me.
    I dont participate in DRPs. I dont like them for a number of reasons....but each to their own.
     
  12. twisted strategies

    twisted strategies Well-Known Member

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    austing ,

    yes but i use some unusual parameters

    in 2011 ( when i was still inexperienced ) the major things i bought aggressively it the dips, were MQCPA ( paying 11% franked pa ) MQG , VAS , VHY and WBC ( and a selection of fixed interest securities , to fund further purchases .

    CAM ( Clime ) is averaged down because it is the boring conservative player it is
    but should manage 4c ( 1c x 4 divs ) a year even in the roughest times ( my challenge is to get my av. SP down below 70c to cope with that )

    so in selecting LICs i try thinking of an attractive angle

    WAX i bought in 2011 @ 70c ( i have since extracted the investment cash ) but was bought as a HIGH RISK/AGGRESSIVE LIC ( when the market was scared )

    Balance Date Dividend Type Cents per share Ccy Franked % Ex-Dividend Date Books Close Date Pay Date
    30/06/2016 Final 4.250 AUD 100.00 17/10/2016 18/10/2016 28/10/2016
    31/12/2015 Interim 4.250 AUD 100.00 13/04/2016 14/04/2016 29/04/2016
    30/06/2015 Final 4.000 AUD 100.00 12/10/2015 14/10/2015 23/10/2015
    31/12/2014 Interim 4.000 AUD 100.00 18/05/2015 20/05/2015 28/05/2015
    30/06/2014 Final 3.750 AUD 100.00 13/10/2014 15/10/2014 24/10/2014
    31/12/2013 Interim 3.750 AUD 100.00 11/04/2014 17/04/2014 30/04/2014
    30/06/2013 Final 3.500 AUD 100.00 18/10/2013 24/10/2013 31/10/2013
    31/12/2012 Interim 3.500 AUD 100.00 08/04/2013 12/04/2013 19/04/2013
    30/06/2012 Final 3.250 AUD 100.00 08/10/2012 12/10/2012 19/10/2012
    31/12/2011 Interim 3.250 AUD 100.00 10/04/2012 16/04/2012 23/04/2012

    in hindsight WAX was always a great yield play ( but some panicked and considered it high risk )
    WAX has probably turned over it's entire portfolio 3 times in the 5 years i have held it

    WIC and OZG and having a tough patch , but once resources start to recover is WA the state to invest in ?? ( i think it is and i am there early, yet ready to exploit any dips )

    starting to get experience in 2011 taught me 'set and forget ' wasn't going to suit me ( if i had cash risk in the holding ) i was going to have to put some effort in .

    BKI on the other hand has a fairly stable portfolio ( suitable for averaging down in the dips which i expect next year .)
     
  13. twisted strategies

    twisted strategies Well-Known Member

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    unwillingwillis,

    indeed , what suits you is best ,

    you are likely to have a different time-frame and different research time available ( and have different needs )

    cheers !!
     
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  14. Bran

    Bran Member

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    I'm not sure I can contribute to this thread, but the proportions made me plug in some numbers and might be interested to look back.

    Overall, excluding super:

    92% property (kamikaze)
    4% cash
    4% shares, of which
    - 16% LIC (MLT mainly)
    - 22% individual stocks
    - 45% managed funds (45% aus/55% international)
    - 26% ETF (VAS)
    - 12% pure spec/prepared to lose

    Currently - no poor properties (with a commercial exception), accumulating LICs almost exclusively. Unlikely to buy more direct stocks unless a bargain- I watch very few. No more contributions to managed funds
     
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  15. austing

    austing Well-Known Member

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    Fair enough. Gotta do what you're comfortable with. As they say there are few investments that aren't worth buying "at the right price".

    VHY I don't like at all but WAX at the right price to compensate for high fees is an excellent LIC.

    WIC and OZG I would never own. Not suggesting it's wrong but just not suitable for me. Perhaps as an active investor with some skill and luck they may be worthwhile. But for long term investors like myself the following chart shows how poorly cyclical resource stocks perform:
    image.png

    BKI a great dividend focused LIC for the long term.

    For me buy and hold has worked beautifully over a long period of time. It's really just about "conservatively" building passive dividend income until it replaces one's income from employment.
     
  16. twisted strategies

    twisted strategies Well-Known Member

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    VHY was good ( when bought at 2011 prices ) SYI turned out to be better ( bought in 2012 )

    BKI i have bought this year and to be comfortable i will look to add in the dips ( and DRP )

    i am expecting a crash next year ( or a correction this year followed by a second next year )

    WAX ( at no cash risk )is nice but at $1.50 in the current climate ... not for me currently ( is also DRPed )

    resources i think haven't hit bottom ( and i don't think this is a recovery in them ) depending on which resource stock i use as reference i think no recovery before late 2017 but possibly as late as 2019
     
  17. twisted strategies

    twisted strategies Well-Known Member

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    Bran ,

    exchanging ideas can promote thinking ( by members and casual readers )

    you may contribute more than you realize ( even by asking a question )

    MLT i cannot get an attractive price ... i was hoping the share split would give that opportunity

    stay alert opportunities don't always give much warning

    and if i wasn't under deadline pressure ( my cash sitting in a term deposit in 2020 won't do enough )

    i might be sitting back a little, currently ( instead of looking for replacements for stocks taken over )
     
  18. twisted strategies

    twisted strategies Well-Known Member

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    CAM ( current holdings )

    Top Holdings (Weightings %)

    Australian Equities - Large Cap

    Australia & New Zealand Banking Group 5.17
    National Australia Bank 4.19
    Commonwealth Bank of Australia 4.08
    Caltex Australia 3.10

    Australian Equities - Mid Cap

    APN Outdoor Group 4.59
    Ardent Leisure Trust Group 3.38
    Gateway Lifestyle 3.22

    Australian Equities - Small Cap

    Nick Scali 2.99
    Citadel Group 2.42
    Elanor Investors Group 2.13

    International Equities

    Oracle Corporation 1.25
    Baidu.com 1.16
    Cognizant Tech Solutions 1.14

    AUD Cash 7.67
    USD Cash 6.87

    Total 53.36



    Company Overview ($m)
    Australian Securities $63.09
    International Securities $6.72
    AUD Cash & Equivalents $6.27
    USD Cash & Equivalents $5.62
    Total Portfolio including cash $81.70

    i hold CAM ( and CAMPA )

    now many LIC fans will know CAM well whether they hold or make other choices

    but the steady change in portfolio weighting and style , might interest general investment students . ( on how skilled managers cope with changing market conditions )

    in a lower yield scenario , they are both stock-picking and trend trading

    the current change of plan won't have me selling , it is actually increasing my diversity ( i hold NONE of the shares mentioned in the portfolio directly ) , but the change is very likely to reduce the chance of me adding extra ( apart from the CAMPA shares converting into CAM in April 2017 )

    (DYOR)
     
  19. Gormie

    Gormie Member

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    I agree with Austing that it is not necessary to have international exposure. For those in retirement mode Australian fully franked dividends are a must.
    As I hold the big four banks and TLS I don't have any of the older, traditional LICs.
    However I am a big fan of LICs and hold a number of them - especially those in the Wilson stable.
     
  20. twisted strategies

    twisted strategies Well-Known Member

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    i decided i needed growth ( in preference) so went WBC , MQG , BEN , BOQ , TPM and AMP ( AMP being the disappointer to date ) ,

    WAX when i bought in ( 2011 ) was not very popular but 70c , now it is popular but nothing like the same portfolio as i bought into .

    current Top 20 holdings
    Code Company Market value $ Market value as% Gross assets
    SIQ Smartgroup Corporation Limited 10,697,507 4.4%
    NCK Nick Scali Limited 10,093,338 4.2%
    CCP Credit Corp Group Limited 8,353,552 3.4%
    RCG RCG Corp Limited 8,218,871 3.4%
    SGF SG Fleet Group Limited 7,724,722 3.2%
    AAD Ardent Leisure Group 7,250,358 3.0%
    VTG Vita Group Limited 7,238,902 3.0%
    ECX Eclipx Group Limited 7,068,752 2.9%
    CL1 Class Limited 6,945,177 2.9%
    PME Pro Medicus Limited 6,278,029 2.6%
    HLO Helloworld Limited 6,191,742 2.5%
    ONE Oneview Healthcare PLC 5,577,260 2.3%
    PSI PSC Insurance Group Limited 5,462,267 2.2%
    SXL Southern Cross Media Group Limited 4,991,889 2.1%
    SDF Steadfast Group Limited 4,808,692 2.0%
    WEB Webjet Limited 4,586,863 1.9%
    FAN Fantastic Holdings Limited 4,131,460 1.7%
    SLC Superloop Limited 4,092,634 1.7%
    CVW ClearView Wealth Limited 3,774,861 1.6%
    BBN Baby Bunting Group Limited 3,200,948 1.3%

    of those mentioned i hold ( directly )

    CCP up 203%
    RCG up 137%
    PME up 2,532%

    so am not worried about the overlap ( i have also recovered my cash investment out of those 3 shares and WAX )

    i have this motto ' don't be greedy '

    cheers !