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Hi everyone

Attached is some interesting reading on a perfect portfolio I developed.
I will post here for anyone interested in it for the next month.


Pilot

DENIED! Why no PDF?

Hi Patrick

Yes, it is 3 sets of 7 indicators that I use. I did not use that many last year though. It is 3 different indicator running in 7 different time frames.

The time frames being 3 days, 10 days , 30 days, 90 days and then 3 weeks, 10 weeks and 30 weeks.

For the trading and Investing I use different weighting on each of the timeframes.
See below. I can change the weighting as I like, but these are good guidelines. I could also change the weighting for a long term investor.

   Trader   Investor
D3   10%   0%
D10   15%   5%
D30   10%   15%
D90   15%   40%
W 3   20%   5%
W10   20%   10%
W30   10%   25%

I don't have enough invested to really live of my portfolio, and hence I am looking for an income and not live off my investment for the next couple of years. I am still too young to retire and would like to work in the field that I love.

I think I should rather post in this thread rather than the Investor Challenge.

Attached is more detail on a Perfect Portfolio I have been working on. I also attached the last 2 days of the portfolio with 8 and 11 April closing prices.

Pilot

Merged the two topics

So it's been 3 days since the first Perfect Portfolio has been posted. Let's take a quick look at how the first 2 PP's have done.

Because it is mostly Top40 shares that we are working with, and the Top40 index is the best representation of the average fund out there and our market, this is the one we need to outperform.

Attached is the current results for the first 3 days on the 11th of April's Perfect Portfolio. The Top40 gained 2,8% since Fridays close and the Perfect Portfolio did 4,6% for the 3 days. The perfect Portfolio outperformed the Top40 by 66% in the 3 days. On a R1bil fund, that is R18mil in 3 days.

For the 2 days since the 12th of April's Perfect Portfolio, it managed to gain 5% and the Top40 gained 3,1%, and outperforming the Top40 by nearly 59%.

Now, it is impossible to have the perfect portfolio every day, as it changes every day, and with every price change having an impact on the future exposure of that share. The ideal would be to constantly adjust a portfolio or fund, if it deviates too far from the Perfect Portfolio. I will keep the updates coming.

Interestingly, Anglo American, which was the best share on Monday, has since changed to the 27th spot and should now only be 2,25% of today's Perfect Portfolio, because it now has more downside potential than Monday's price.

There hasn't been much changes since yesterday's Perfect Portfolio, but WHL, RMH and DSY has changed trends from slightly Bearish to slightly bullish. See attached.

How is the index and net index derived or arrived at. 

Hi Brad


It is 3 different chart (and other) indicators that I use, but I prefer not to tell which they are. I add the daily price every day and I have 3 spreadsheets doing the calculations for each indicator on each share. It does it in 7 time frames, being 3 days, 10 days , 30 days, 90 days and then 3 weeks, 10 weeks and 30 weeks.

The 3 spread sheets combine their data into another spread sheet which adds the weighting. For the trading and Investing I use different weighting on each of the timeframe.

See below. I can change the weighting as I like, but these are good guidelines. I could also change the weighting for a long term investor.

   Trader   Investor
D3   10%   0%
D10   15%   5%
D30   10%   15%
D90   15%   40%
W 3   20%   5%
W10   20%   10%
W30   10%   25%

With the weighting taken into account, it gives a total index for each share. Either being negative (bearish) or positive (Bullish)

It takes quite a lot of information and squeezes it into one, easy-to-work-with index.

Hope it helps.

I have been bearish on Banks over the past few weeks, and must admit that my view changed 2 days ago, with BGA (Barclays Africa) making an unexpected 4,2% gain on Monday and is now a share that has the most upside potential of the 45 shares I monitor. This has the potential  to become a short squeeze for a lot of traders/ investors over the coming few days/weeks.

There are a large amount of short positions on this share, because of Barclays that will be selling 60+% of their holdings over the next 2-3 years. This could be a huge move in the opposite direction for a lot of traders, and could cause a very dramatic move in the share price. The next few days will reveal the outcome and I will be watching this share very closely.

Naspers and Telkom has been now fallen out of favour as it seems Banks and Construction are the most favoured sector to get into currently.

The Perfect Portfolio now has 3 Banks in the Top 10 and PPC, still being my Top pick at the moment.