Recession Portfolio

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22nd Jan '16 by Rusty2

19 comments 20242 reads

With some talk about recession at the moment I thinking of doing a portfolio of 20 shares and see how it performs. Any suggestions for shares to include would be welcome.

My choices so far are: H & T (LON:HAT), National Grid (LON:NG.), Poundland (LON:PLND), Dee Valley (LON:DVWA), Fyffes (LON:FFY), McBride (LON:MCB), Novae (LON:NVA), Charles Taylor (LON:CTR), Fairpoint (LON:FRP), SkyePharma (LON:SKP), GlaxoSmithKline (LON:GSK), Begbies Traynor (LON:BEG), British American Tobacco (LON:BATS), Dignity (LON:DTY), Royal Mail (LON:RMG), £BT.A

Probably need a supermarket?

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About the Author

Rusty2

Premium Member

19 comments

mrwhits

22nd Jan '16

beg.l

Rusty2

22nd Jan '16

Do you mean £BEG?

I don't know much about them, had a quick look and yes they do seem a good selection, I will add them, thanks.

mrwhits

22nd Jan '16

begbies traynor

Rusty2

22nd Jan '16

Yes ok got it, yes looks an excellent choice thanks.

mrwhits

22nd Jan '16

to be honest, you could also add any large miner and any large bank, as they are usually first in, first out of recessions historically...

take your pick...

regards

jjis

22nd Jan '16

Dignity (LON:DTY) is probably recession proof!

gus 1065

22nd Jan '16

Possibly add a large cap consumer defensive. I've held British American Tobacco (LON:BATS) for over 20 years. Hugely cash generative, strong and reliable dividend payer and the first thing its customers want to do is set fire to the product and then replace it. Decent stock rank of 84. Long term declining global market and perpetual risk of litigation hanging over the company but this has always has been the case.

Gus.

Rusty2

22nd Jan '16

I did think about banks but depends why the recession, it was the banks that caused it last time. So I was reluctant to add a bank but I do have some financials.

Rusty2

22nd Jan '16

Yes excellent choice, I used to hold them sold out too early, I will add, thanks.

Rusty2

22nd Jan '16

Thanks, its not a company I would invest in myself but I will add it on. How about telecoms, drinks companies or supermarket?

TangoDoc

22nd Jan '16

I'm keen to lean more about why I would choose BEG, looking at the historical SP since 2005, the ROCE, 1.45 cover and a value rank of 63 and falling. The reported EPS made me wonder if they were diversifying into the submarine business. Have I missed something about managing other companies' insolvency here? Do they have a unique skill that the figures can't reveal? Maybe I've lost it.

I love Gus's comment about BATS and but for the fact that I've spent a working lifetime trying to put their fires out, I'd certainly have some in my portfolio.On the other hand, I've supplied plenty of custom to DTY and have been a believer for a long time.

gus 1065

22nd Jan '16

J Sainsbury (LON:SBRY) is the highest ranked supermarket (it's in my 2016 Naps portfolio. There seems to be some growing sentiment that finally Tesco (LON:TSCO) is getting its act together and might be a good, albeit still highly leveraged, recovery play. Given your recessionary theme, maybe Tesco (LON:TSCO) on the view that it is arguably more in the VFM niche?

Gus.

Rusty2

22nd Jan '16

Yes my thoughts as well, pity Aldi not listed on UK market.

cig

22nd Jan '16

Dignity (LON:DTY) is exposed to interest rates, due to the pretty extreme leverage. It's in negative equity, on a balance sheet rich in intangibles, and their strategy is to get more debt as soon as some cash flow puts them at risk of going into positive equity. If they some day have to refinance at markedly higher rates or if funding gets sparse, they could easily blow up. The underlying business should be robust (unless everyone switches to easyCremation) but it's padded with financial semtex. Don't trust the management either.

Rusty2

23rd Jan '16

Thanks for that info. I have not followed Dignity (LON:DTY) lately, it does not look so good on Stockopedia either.

I may go for Royal Mail (LON:RMG), think that is fairly recession proof.

vik2001

23rd Jan '16

Consider a gambling entertainment company like 32red or betfair. They always do well in recessions as well as tobacoo companies.
I still think jd sports will do well this year again

Rusty2

24th Jan '16

Thanks, its not a sector I ever invest in, it seems you are correct having had a quick look, so yes I may well add one to the list.

For telecoms I was thinking either £BT. or Vodafone (LON:VOD), maybe £BT, is the safer choice?

Redrichmond

26th Jan '16

Interesting. Im reading a book I bought that was listed by Ed on Stockopedia ( I,m not into advertising books etc)

"Trade like a Stock Market Wizard by Mark Minervini"

I love stockopedia and follow certain models but this book is teaching me how to make more money in any market condition.Recession or not recession

It talks about comparing 52 week lows v 52 week highs and its all about momentum investing and EPS and Sales Q v Q, using all the available resources on stocko to compare shares

Momentum investing is the way

I have already made £3000 this week. ( a largish pot though)Interestedly his pattern does match the stockopedia ranking so following his idea I get roughly the same shares as what stockopedia choose but he goes for the superinvestors

I tend to chiose shares greater or = -5 % of 52 week highs and the higher the better of the 52 week low (100%. +)

In the book he talks about stages (4 stages) - chapter 7- buying at stage 2

Theres different checks you need, the above and also using charts and a RSI indicator thats at 70% and making sure the 50,150 are above 200 . Not going into all the checks

So I have burford capital, penna consulting, dart, jd sports, mti wireless

All up when everything else was down (penna is up and down at the moment) JD and burford are rocketing

Obviously do your own research but I bought 3 other books recommended on here and I am continuing to learn

I set a stop loss for 10%

Cheers john

Will Marsh

27th Jan '16

Great idea,

Myslightly off the wall ideas to add would be

1) yara
2) exposure to gold - Randgold, Blackrock gold & General, barrick or similar
3) Nestle

good to have a bit of money in swiss, krona & gold when doom strikes

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Recession Portfolio

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Rusty2

19 comments

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