Nice one @mikebrisy, good to have the context.

Funnily enough, I've found myself going the other way in that my real life and SM portfolios have drifted apart over the years. Initially they mirrored each other very closely, but real life tax considerations, the purchase of our home and my increasing obsession over magic internet beans (and the near 5x appreciation of said beans since I built my position #humblebrag) have resulted in somewhat of a distortion. And the 20% max weighting rule on SM prevents me from constructing a more accurate reflection of what I'm doing in real life.

That said, my SM portfolios is hopefully a good indication of what I like and the degree to which I like them. Which, at the end of the day, was always the intention.

Fwiw, members can always reset their portfolios and start from scratch. But that does mean you drop off of any longer term performance rankings, which even if your rank is low still earns you award credits. But it is an option for those that want a fresh start.

@Strawman I actually found it really helpful that my RL "quality" holdings outperformed my more risky (and to be honest at time reckless) SM bets.

Over time, my relative SM underperformance has really helped focus my mind. Many of the SM picks have had a thesis with a very material upside, but I've often been wrong, and in several cases, I have learned from those decisions. However, I intend to keep swinging at riskier opportunities with at least 50%. of my ASX portfolio.

Eventually, something will get hit out of the park and the safer portion of my portfolio will hopefully continue to safeguard me from blowing up all my capital!

(Still can't bring myself to buy $BTC or Au)

Each to their own, but surely as someone who appreciates a good asymmetric bet you could be persuaded to take a 1% allocation @mikebrisy

If it goes to zero, you won't feel it. If not...

At this stage it's gone from a zero to the 10th largest currency on earth, 10% of Gold's market cap, one of the largest ETFs on wall st and a strategic asset for the US government.. all in less than 17 years.

All while the reserve currency is slowly collapsing under a mountain of debt and fiscal profligacy.

Like any good drug dealer, I'm just suggesting you have a little taste... ;)

@mikebrisy must be that time of year! I have done a similar thing and show it for those interested

Portfolio Review Oct 25

To put this portfolio in context is my largest asset by far, times larger than my principal residence. My return criteria for my portfolio to sustain my ongoing expenditures are in the LSD % range. I point both these points out because it has clear implications for stocks held. The portfolio is spread across my SMSF, company any and family trust. I do not differentiate where the funds sit; I combine all investments. The investment philosophy, which I have droned on about many times, is simple: find great companies, buy them at reasonable or good prices and try not to make too many changes. Because of the high equity exposure in my net wealth, and being retired, I keep a conscious low level of stock risk and skew conservative IMO. My only other asset of significance is my defined benefit pension, which helps cover cash flow requirements.

 Ex 20 oz growth

38%

 AI broadscope large cap tech

22%

 Growth intl other

14%

 Health

10%

 Gold

6%

 Large cap oz

4%

 Spec

3%

 Resources

3%

 Cash for investment

2%

 TOTAL

100%

Some explanation around the above. Ex 20 growth is, IMHO, clearly the best risk reward in the Aussie market. They are companies with established, very profitable unit economics and still have considerable TAM to eat into. Stocks held here include LOV, PNI, HUB, REA, CAR, NCK, EOL (promoted from spec), TNE, plus others.

The next category takes us to international markets in what I describe as broad tech/ soft AI exposure. As winners become clear here, I can see changes to be made over time. Stocks included here are TSMC, GOOG, MSFT, AMZN, ASML, NVDA, and META, so keeping to the companies with a broad scope and many levers. Interestingly, when I first looked internationally in 2022, I thought I would find a huge array of opportunities outside the large tech companies. I did, but someone got there first, outstanding companies with a price tag to match! So, I came back to where I am now.

The next segment is still international and includes other industries outside tech/AI. As an aside, I find the international market, especially the US, has a much higher proportion of quality growers, no surprise there, but also has enormous volatility, which produces opportunities IMO. Stocks include Visa, Adyen, LVMH, and UNH (new). I also have a growth ETF, WCMQ, which I have been using as a funding source for a while now.

The next is Health, being a mix of international and domestic, but all are global companies. Health has been on the nose for a bit, coming off the volatile C19 period, which most found challenging given the extreme demand changes, and into potential price/tariff issues, etc, from the current US regime. I am watching this area closely and have been adding over time. It remains a source of unloved quality stocks imo. Stocks include CSL-Im back again, RMD, NVO, FPH, and SHL.

Gold has grown a fair bit, and although the momentum has been strong, I see this now as a funding source more than anything. As described previously, I have moved on from all companies with operating leverage and only hold royalty companies and bullion, GOLD, FNV and WPM. These will all survive whatever happens to the gold price.

The rest are really bits and pieces, and I do carry a long tail. The top 20 are about 66% of the portfolio. The largest holding outside the above is MQG.

My speculative position includes most of my SM holdings, C79, BVS, XRF and SPZ being the bulk of it. Here I am, really looking for candidates to go into the ex20 group.

Therefore, you can tell why my “real life” portfolio differs from my SM portfolio quite a bit, but some similarities. The interesting thing is that over the longer term, the performance has been similar, with SM doing better in strong markets and the RL doing well in normal or weaker markets. why so close? Something to ponder over, lol. 

i also keep a cash reserve outside the above, only for consumption, not included above, so there is no need for forced sales. highly recommended. imo.

@mikebrisy interesting, quite a bit of crossover with me -13 stocks. the biggest difference by far is your conviction in small/micro. where we have seven stocks in common, my weight 4% your weight 28%. aggressive, to each their own. my weights include international as well (about 30%) so u can gross it up, still a wide difference

always interesting to see how other SM people approach PMgt

@Solvetheriddle good point. I am quite aggressive on risk in my ASX portfolio, as it is only 8% of my total asset value. I can take this risk in my late-50s, because the rest of my asset base is broader-based, passive global equities and fixed income.

So, even though my RL-ASX gains exceeded my living cost in the last FY, a 50% loss in that portfolio wouldn't change my life. I think there is nothing more important than being clear about your risk appetite and risk exposure. It can and does creep over time if you don't manage it explicitly.

@mikebrisy couldn't agree more, one thing that has become apparent to me, moving from institutional money management to being a "retail punter", is that making comparisons to others is completely different. insto managers can be compared to each other given their narrow briefs, but in retail land, there are a million different stories, ie risk/return tradeoffs, so largely incomparable. imo. for instance, im retired and my share portfolio is by far my largest asset, so the offset to massive market exposure is a conservative stock mix.

Very Interesting @mikebrisy! They say, “If you can’t measure it…then you can’t manage it!” Im a big believer in that and I think the portfolio overview is a very useful starting point. I haven’t actually looked at all our investments from all accounts in a pie graph before, so you’ve prompted me to do that. I’ve often done mental calculations and often include our IRL weightings of stocks on Strawman, however I usually ignore our property investments in these.

It is really interesting to look at the weightings of equity and cash alone, compared to with real estate included. The risk doesn’t seem as high when real estate is included. The first chart includes real estate, the second equities and cash alone.

Looking at all investments, real estate makes up 39% of all investments, and about 25% is made up of 5 stocks - BHP, CSL, CDA, IEL and NCK. I feel comfortable holding all these, however I think CDA is reaching valuation.

The next 25% is made up of 10 stocks and cash - LYL, PNV, CBA, Cash (2.9%), SIQ, NAB, DUR, RMD, LBL, SLH. A bit of a motley crew, happy holding these but the valuations look lofty for CBA and NAB. I sold down a lot of bank shares recently, mostly ANZ and Westpac which I bought to trade. I haven’t sold any CBA and probably won’t because it’s outside the super fund and capital gain is the issue.

I think the long-term proposition is good (I’d prefer these words to “high conviction”) for PNV, CSL, IEL, BHP, CDA, NCK, LYL, DUR, LBL, ACF, UNI, FLT, LOV, LYC, HIT and SPZ. I guess that stating the obvious otherwise I wouldn’t own them.

Recently I’ve bought MTS, UNI, IEL, LAU, DUR all at steep discounts when I think the proposition looked good. Some I might trade later.

I have sold a few small parcels of CDA lately, not because I don’t like the business, but it’s our fourth largest overall investment (with real estate included) and I think it’s reaching full valuation. I could be wrong though!

I currently have IEL, UNI, AX1, ACF and MIN on close watch as buying opportunities. I think they’re all trading below valuation. I could be wrong here too!

Thanks @mikebrisy @Solvetheriddle @Rick this was an enlightening read - when I first read Mike's initial post I was thinking along the same lines as you @Solvetheriddle - that it was a pretty aggressive allocation (internally assuming this RL ASX portfolio essentially reflected your whole asset pool - I think the Cash and VGS inclusions in it may have thrown me off)

Clarifying that it's actually only 8% of your total asset pool makes a LOT more sense - and probably closer aligns with our RL (direct stock picks) ASX portfolio (which is also somewhat small cap heavy) - looking now it's currently ~9% of our (outside/excluding Super and PPOR) asset pool (and also excludes cash held in our personal names). Like you (also in my late 50's) the rest is mostly in broad based indexes and fixed income and thus see this more as the "scratch the itch" and "educational experience" slice which could in theory go to zero without having a catastrophic impact - other than being pretty disappointed/sad :)