LON:MGP | The BBB Fund Monthly Retro - July 2021 [ISA +8.2%, SIPP +1.9%, FTSE Benchmark -0.8%]

30th Jul '21 by Boon

9 comments 1297 reads

Like many of you, I have been a Stocko subscriber for a while, private investor for longer, and been slaving 9-to-5 for even longer. This year, I have decided to take a more rigorous approach to investing, and one tip I have received is to make sure you do regular portfolio reflections. I work in Agile, so the concept of doing a "retrospective" every so often appeals; you not only discover what went well and should be repeated, but also what went badly and take actions to stop it from happening again.

Do send me comments or messages - would love a good chat or debate on my or your investments.

Introduction

What's the BBB Fund?

My name is Boon, and this is my Beer & Boat fund. Ideally, every year it should make enough to pay for my beers. And if it does well, maybe a boat!

What's my investment strategy?

Is it fair to say I don't really have one, or I'm not knowledgeable enough to know what strategies I'm deploying. Maybe one of you can tell me after reading ! All I know is that I do both small caps and large caps, I go across sectors, I stick to only UK listed shares, I like both dividends and also growth. I'm skeptical of blue sky, but am holding one currently. I balk at chasing high PE multiples. I avoid IPOs for at least a year after listing. But I'm a realist that as long as you buy at a share price that is lower than where it goes in the future, then there's no difference in how that pound is earned, when it comes to investing.

What's my setup?

I do all my share investing via a SIPP and an ISA. So you will see performance graphs and stats from both below. The SIPP is mainly used to hold larger and more liquid shares; this is because I use YouInvest, and often I find they are terrible in pricing for small caps, both buy and sell. The ISA is mainly for small cap shares, and I hold via IG.

What is my sizing?

I won't divulge how much money I have in each, nor the exact sizes of positions, but in both SIPP and ISA I have 6-figures. I will state Small (0-4% of portfolio) , Medium (5-9% of portfolio), or…

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pgjeh

2nd Aug '21

Great post. Your investing ideas seem very reasonable. There are so many ways to make and lose money investing. Explaining your thought processes is key. I'm not sure about holding so much cash, but each to their own.

abtan

Hi Boon

Thanks very much for writing this, I found it very insightful.

You asked for feedback, but if I'm honest, I don't feel capable of offering any. There are so many different investing styles and so many different reasons that an individual makes for buying or selling that it's hard to critique or praise anyone else's choices.

Taking today as an example, I am gobsmacked by what looks like a successful outcome for Thinksmart (LON:TSL) . Every time I looked at it I just couldn't understand what was so special about it, but those who bought have clearly seen something that I didn't and fair play to them.

---

I do hold a few that you have mentioned, but one that I thought worth sharing my thoughts on was Itv (LON:ITV) .

I hold because of the potential of Britbox.

I must admit to being slightly baffled about why anyone would pay for this service, but the numbers don't lie.

There were 2.6m subscribers as of July 2021 (not all of them are paying), up from 2.1m back in January 2021.

If momentum keeps going and they can hit 10m subscribers, I estimate that ITV's revenues (i.e. excluding BBC's JV share) would be between £200m-£250m per year.

If most productions are being made for TV anyway, I imagine that much of this revenue will convert to profit. By way of reference Britbox US was already profitable after passing 1.6m subscribers.

Can it get to 10m subscribers? Honestly, I'm amazed it got to 2.6m subscribers, so a part of me thinks it will, especially as expansion into new territories continues.

In the meantime, the advertising side of the business should tick along nicely, supporting operating expenditure and growth in the Studios business.

The diversification in my opinion, provides sufficient avenues for future growth.

Thanks again for posting and I hope that you get the time to continue in the future.

Cheers

Boon

3rd Aug '21

Thank you! I am trying to get it invested but am finding a lack of opportunity, as well as wanting to removing timing risk (ie I try to space out purchases and sells).

I also do think markets are a bit toppy and want to hold some dry powder for a correction or bigger drop. I find that often, there will be no shares that meet my buying prices. And then when the markets dip, suddenly 3 or 4 do, so you need enough cash then to buy.

As you saw Itv (LON:ITV) also intrigues me! Thank you for sharing your thoughts, especially around Britbox. That is interesting, I kinda glossed over that part because it was so tiny in the bigger ITV business.

I'm now thinking of it as potentially a sum of parts play. Especially the value of ITV Studios, as content producers and rights owners are getting bought out at ridiculous valuations. Just look at this week's acquisition of Hello Sunshine. £650m! Doesn't have the huge back catalogue of content that ITV Studio does, and by all measures is 5-10x smaller in revenues, productions in progress, etc. I can easily see ITV Studios maybe commanding £2bn, £3bn which is a big chunk of the current EV.

Bluesky Ventura

Hi dahokolomoki,

Great thread and performance, well done.

I was trying to understand the performance returns, but could not understand if this includes cash or not. If it includes the cash the performances returns for your investments are twice as good?

Good luck for the rest of the year.

BSV

My performance does include cash! So yes, on the invested part is probably more like 30% better (I haven't done the maths but I think you can't just double the return date?)

My portfolios have definitely exceeded my expectations for the first seven months, but I do see lean times ahead. There were many massively mispriced shares earlier this year that delivered 50%+ returns in just a few months. But when I look through my watchlist now I struggle to see many that will deliver 50%+ in 6 months.

Where I'm hunting now is looking for takeover opportunities in the large cap space, as I believe as we enter the euphoric stage of the bull market, there's going to be loads of M&A deals at 30-50% premiums. Sumo was one, Meggitt the other recently. Itv (LON:ITV) is a strong candidate, see my discussion with Abtan below!

I've enjoyed the post and the returns are really tremendous.

Itv (LON:ITV) does look interesting and will take a deeper look.

Dose

4th Aug '21

Great article @dahokolomoki - I enjoy reading your posts as well.

Thank you! :)

The BBB Fund Monthly Retro - July 2021 [ISA +8.2%, SIPP +1.9%, FTSE benchmark -0.8%]

Introduction

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Boon

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