I mentioned last week that I was thinking about selling Tullett Prebon (LON:TLPR) from the EV portfolio after a set of results, and the realisation it was a company I had a particularly poor level of knowledge on. It was a tough decision - not least because it still appeared cheap - but, I hope, was the right one. The situation in actuality was completely at odds with my perception of what was happening, mostly because (as I mentioned) my perception was rather flawed. Since selling it's continued to fall, which always makes me feel a little better!
The market's fallen pretty significantly this week too, though, which means that the company I bought with the proceeds - Northgate - has dropped a few percentage points. Noise anyway, so of no particular concern. I first discussed Northgate a few months ago, where I was interested by didn't particularly want to sell anything, and so they sat in my shortlist. Some thanks also has to go to red for a post which refreshed my memory and undoubtedly helped me to make up my mind.
More to come..
Even with those two changes, though, I'm not particularly happy with the structure of the portfolio. I've included a chart and a table below - the chart is in line format since a pie chart gets too fiddly at small sizes - which give my current holdings. This also serves as a nice update on that side of things, since it's the first thing people usually ask, and has been somewhat lacking since I stopped doing monthly reviews and swapped to half-yearlies to try and avoid the noise and incessant chart watching.
The biggest problem is the imbalance. The portfolio's performance is increasingly driven by Barratt, Howden and Trinity Mirror. The bottom couple of shares - Creston and Plastics Capital - have very little relevance now. It wasn't always like this - they were never huge positions, but them falling along with the increases everywhere else means they serve a dubious useful purpose. I don't really have a strong opinion either way on the whole diversified vs. concentrated approach - one thing I don't like, though, is having one share representing 13% and one share representing 3%. If I renew my conviction, though the price has fallen, I think I should top up. Likewise, maybe I should trim back on Barratt since it has risen rather substantially. That's something I've already done once, though, and it's not hugely far off where I'd want to be selling the whole stake, which complicates things somewhat. The huge spread on the micro caps gums everythings up, too, and leaves me with a tendency to just keep what I have.
Not too much more to say about the portfolio than that, really. The timing is a little awkward - probably unsurprisingly - a lot of the shares are appreciating to a level where I want to sell, and I want to find replacements - I don't have any set aside for cash; it's more just what's left over after I've bought what I want to buy. I would rather have it in a productive asset than an unproductive one.
At the same time, the market is down 5% since I started a year ago, so at least a suggestion there should be opportunities I'll be interested in. It hasn't really worked out like that, given the way things have moved, and I've probably gotten both more picky and more aware of what I don't know. The curse of indecision!
Filed Under: Value Investing,