Forum Topics Coles Spin off
anthill
Added 7 years ago

Yes I realise the current situation has it's flaws!

 

Early in 2018 I was already starting to become more concentrated in ANO and RFT, my high conviction picks.  Then after I found the Strawman site I made the decision to

  • Only have it as a major real world holding if I could justify it (on Strawman - writing it down helps)
  • Only select it on Strawman scorecard if it were a major real world holding
  • Not complicate Strawman selections

The design of the scorecard very much suited this approach and it has had it's benefits for me, and I'm not talking about the Strawman scorecard.

 

I guess in deciding on a new scorecard format it is really important to incentivise the kind of behaviour that is desired for the group as a whole.  I haven't thought about this too much but here are the considerations that come to mind

  • Portfolio size/Diversification (how many good selections can part time investors make?/ how important is representation of diversification in scorecard selections?)
  • Simplicity (the real game is in real money)
  • Time Horizon (Should people be able to switch in and out as desired? What thought has gone into this selection?)
  • Justification (What thought has gone into this selection? …)

0
Strawman
Added 7 years ago

Thanks for the thoughts anthill. Really great to hear that the platform is yielding value for you. It's amazing how much writing something down and sharing it can help (both you and others!). As for performance tracking, i'm learning is a lot more complicated than i first imagined. All methodologies I have explored have strengths and weaknesses. Some of the better/fairer ones are complicated and I fear will just cause confusion among users and require a lot of customisation of morningstar data (which is often a nightmare to deal with). The attraction of the current system is its simplicity. As for rules, the more restrictive I make recommendation requirements, the less people will make them.. Anyway, we'll continue to think it over and always good to get other's perspectives.

0
anthill
Added 7 years ago

My comment would be that if I had a long term investment (and scorecard selection) in this (or any) company then I would not want it to close and re-open as this lowers the average return on the scorecard.  Perhaps investors could be given the option to close or continue with either WES or COL (with price adjusted accordingly)?

0
Strawman
Added 7 years ago

The average scorecard figure certainly has limitations -- just a simple average of all recommendations can have unintended consequences. Importantly, the scorecard is benchmarked against the index, in which positions are opened and closed in tandem, so it is affected in the same way. We are currently exploring other performance measures, but the trouble is that although some methods resolve certain issues, they also create new ones. At any rate, it's an active point of discussion and we hope we can develop a better metric in the coming year. Thanks for the thoughts

0
Strawman
Added 7 years ago

Thanks for raising, let me try and clarify.

Corporate actions like these always have their own unique circumstances, so it's not possible for us to automatically code into the system what should happen. We have to treat each one on a case by case basis.

In this instance, anyone with Wesfarmers on their scorecard will continue to hold it BUT (at this stage of development) we can't automatically create a new holdings for users. Besides, different people will want to do diffreent things (some will be happy to hold both, others will choose to sell either their Coles or Wesfarmers shares etc)

If members want to add Coles to their scorecard, they will need to do so manually (shares are below their start price, so it's actually an advantage to add now if you want).

If you hold Wesfarmers on your scorecard, and want to close it, we can reduce your cost base by the current market value of Coles shares to reflect the change. Email us at [email protected] and we'll make it happen.

Let me know if you have any questions/comments

0
Strawman
Added 7 years ago

actually, after talking to the developers, and thinking more deeply about this, what we will do is close any open WES recommendations on the 20th November (close price was $44.22). We will then open two new positions the next day, one in COL and the other in WES. Users can then decide what they want to do with the new positions.

0