From Port Phillip Insider (Australia)-
This week, I will take a bit of a different focus. I will look at some global data to identify regions of expansion and contraction. I will also be looking at some cyclical data to get a better idea of where we are in the larger cycle.
But first, a review of the ‘Top Stock’ results from four weeks ago.
On 14 June, I revealed five financial stocks on the ASX300. After four weeks of volatility, the results are very positive, as you can see in the table below.
|Ticker||HOLDING||4-Week Return, %||Primary Business|
|ASX:ASX||ASX Ltd||-9.8%||Multi-asset class vertically integrated exchange company|
|ASX:BLA||Blue Sky Alternative Investments Ltd||1.8%||Alternative asset manager|
|ASX:CGF||Challenger Ltd||0.8%||Investment management services|
|ASX:ECX||Eclipx Group Ltd||4.2%||Fleet leasing, equipment finance, consumer auto loans|
|ASX:IMF||IMF Bentham Ltd||9.9%||Investigation, management and funding of litigation|
The average return (buying all five stocks and selling all five stocks four weeks later) should have given you a 5.3% return. This covers most of the losses incurred in the previous two ‘Top Stock’ issues. As always, I will no longer track these stocks after four weeks. However, you are free to do so yourself.
As I said before, long-only strategies such as what I am showing you here do not anticipate or hedge against possible crashes and downturns. Their purpose is to take positions in quality trend stocks and profit from their good performances.
You may find an average return of 5.3% underwhelming, though this does work out to an annualised return of 68.9%. However, with these ‘Top Stocks’ we are not trying to pick double or triple-digit growth opportunities. As you should know, high-potential-return stocks come with high risks, meaning you can lose most or all of your capital. The ‘Top Stocks’, on the other hand, are intended to bring in a consistent, positive return over time…