This month I selected King Pharmaceuticals (KG) from the MagicFormula listing to add to my "Little Book That Beats The Market" Portfolio of US Shares (100% geared). I bought 260 KG @ $18.49. My US Stock Portfolio currently stands as:
Symbol P/E Last Shrs Trade Date Paid Comm Value Gain
HRB 27.74 21.48 200 28-Jun-06 24.16 130 $5,534.66 -$ 820.54 -12.91%
MOT 12.89 19.01 265 24-Jul-06 18.98 130 $6,490.15 -$ 119.76 - 1.81%
MSFT 23.79 27.61 200 21-Aug-06 24.64 130 $7,114.15 $ 635.29 + 9.81%
ASEI 22.64 51.78 100 18-Sep-06 49.51 130 $6,667.52 $ 162.31 + 2.50%
PWEI 6.65 33.32 150 13-Oct-06 33.29 130 $6,435.75 -$ 124.21 - 1.89%
OVTI 13.68 11.82 300 13-Nov-06 16.47 130 $4,566.06 -$1,926.25 -29.67%
EPIQ 11.60 18.24 320 11-Dec-06 15.65 130 $7,515.84 $ 937.22 +14.25%
CRYP 12.42 22.84 200 10-Jan-07 23.92 130 $5,882.05 -$ 408.14 - 6.49%
VRGY 47.26 25.00 270 14-Feb-07 18.29 130 $8,692.85 $2,203.16 +33.95%
KG 15.56 18.35 260 07-Mar-07 18.49 130 $6,144.24 -$ 176.88 - 2.80%
10 symbols Total(AUD): $65,039.86 $ 362.09 + 0.56%
The commision amounts include an allowance of another $65 for selling costs. There is no allowance for dividends received (around $300) or interest paid on the Portfolio Loan (currently around $400 a month).
At the moment the performance of this portfolio is largely governed by what individual stocks I have selected (semi-randomly) from the Lists genereated on the www.magicformulainvesting.com website. For example, in the first trade I was tossing up whether the buy H&R Block or Hasbro toys - in the end I chose to purchase HRB (which has dropped nearly 13%). HAS in the same period has gained in price. Over a period of several years, once I am fully invested (with a portfolio of 18 stocks), the performance of my particular portfolio should be more in line with what can reasonably be expected from application of the "Little Book" methodology.
My US Stock Portfolio now has the following composition:
Enough Wealth
US Stock Trade and "Little Book" Portfolio Update
March 8th, 2007 at 09:15 am
March 8th, 2007 at 02:28 pm 1173364137
March 8th, 2007 at 08:58 pm 1173387509
Just wondering if you've looked at other brokers to reduce your trading costs. I do all my US trading via OptionsXpress and although transferring cash into the US account without getting hit by the transfer fees is a bit tricky, it works out fairly cheap.
Cheers
Gerard
March 8th, 2007 at 11:24 pm 1173396287
OptionsXpress would be cheaper per trade (US $14.95 ~ A$19 compared to A$65 per trade using Comsec-Pershing) but I'd have to arrange transferring funds to the OptionsXpress account (in USD) prior to making each month's trade. Using Comsec-Pershing the funds transfer happens automatically from my Australian Bank account via Comsec. It would probably be worth the hassle to move to OptionsXpress in the long run, but I keep hoping that I can find a broker that combines the ease of Comsec-Pershing with a cheaper rate. So far I haven't had any luck. The only similar service to C-P is from E*Trade Australia, and they charge more than the A$65 per trade! I may look further into CFDs as I think some Australian CFD providers offer trades on US securities, and, as you're not really buying the actually stocks, the rates are lower. However, I'd have to carefully research this as there other additional complications related to the risk of the CFD provider, plus there's an inbuilt "interest charge" in the buy-sell spread when trading CFDs as they are really meant for short-term trades rather than a buy-and-hold approach. I'm not sure if my holding period of 18 months per stock would make CFDs more expensive...