Share price rebound, page-30

Huddo, the number of stocks is really an individual choice. I read with interest the post by Ka$hmira and noted that he only had a few stocks. I'm at the other end of the spectrum - with about 25 (incl. EFT's) most would think that I have far too many. I probably have. I quite enjoy the paper work / admin and having a large number gives me more flexibility to either top up or reduce. None of my stocks are weighted any more than 5% of my portfolio.

Essentially I have several "traditional" LIC's (MLT, BKI etc.), several that cover the micro to small caps, quite a few International and some others that you could call "miscellaneous" (SOL, LSF, CVF etc.).

Although you should always be prepared to get rid of a stock if circumstances change (I'll be watching with interest the outcome of the shenanigans at CFV re their leadership) I favour the "set and forget" approach. By then keeping the value of each stock at your predetermined %, you should then be able to top up when the price dips and "trim the sails" when the price is high. 

Most of my solid LIC's and International EFT's are set at either 4% or 5%, but I also have tried to diversify by having small positions in such stocks as BTI (technology) and an EFT that deals with Aust Resources (MVR). Further diversification with one of my International stocks being Argo Infrastructure - very defensive and as noted recently still trading below issue price. But by getting in about 6 months ago at less than $1.70 so far I'm doing OK (touch wood!).

A number of my stocks get into shorting / market neutral etc. eg. AEG, VG1, ALF (!?!). This probably retards the growth when the market is flying, but I see it as a good way to insure somewhat against the market taking a big hit. This applies also to the two Future Generation Funds - FGX and FGG.

I recommend having a good look through the Affluence Funds LIC information, run by Daryl Wilson. He discusses LIC's broadly and I agree with him that in general it is better to buy any LIC when it is not trading at a significant premium to the NTA. As much as I like the approach of Geoff Wilson's company I can't bring myself to but WAM when the premium is so high. If it stays high no drama, but if /when there is a correction I think this one may dip substantially. WLE seems better value. MIR has been mentioned - it, too, has been trading at the premium for quite a while but has come back to being closer to its NTA lately. And many stocks trade at a discount for a reason, often just poor communication and lack of exposure. Also lack of liquidity sometimes. 

You can easily sign up for free to be an Affluence Funds member, and then you can see their current list of 12 or so LIC's that are their main positions in their LIC fund. You will find that their LIC fund return is more or less in line with the market, but this has been achieved with less volatility. Given that they also have a number of LIC's in their fuind that adopt short positions / market neutral / absolute bias, I think that they'd outperform during a downturn.    

Lastly (!) I don;t get too stressed about dividends, preferring to look at the TSR (Total Shareholder return). More than happy to see a few shares off a stock that has appreciated well, even if no or low dividend.