Canadian Money Forum banner

81 - 100 of 111 Posts

·
Registered
Joined
·
5,116 Posts
^ How about BOS (aka AirBoss) or is that too small?
 

·
Registered
Joined
·
3,679 Posts
Discussion Starter #82
Yes, it has been around for over 20 years, so that's good. I'll add it.
 

·
Registered
Joined
·
18,291 Posts
An update of our communal growth stock portfolio. If you are logged in and click on the pic, you should get a larger readable version.
Can you help me understand this output?

How realistically does this simulate a stock portfolio? When you add a stock, does this calculator retroactively calculate what your return would have been if you owned the stock the whole time? Or does it consider the new addition (or deletion) as a trade, meaning that the new addition's performance only has an impact going forward?

Or to put this another way. Let's say you have the existing portfolio and then add a new stock like SHOP which has had insane performance. Does that immediately change all the performance numbers? In a real portfolio, this would have no effect because SHOP was not owned in the past.

Just going to brag for a moment that all the stocks I mentioned at the start of this thread, about 2 years ago, have outperformed the TSX :)
 

·
Registered
Joined
·
3,679 Posts
Discussion Starter #84
^
This portfolio commenced January 30, 2019. None of the originals were backdated in anyway.
With more recent additions, they can be back dated to the original date, or added the date they were first posted whichever one prefers. I guess I should add them on the date they were posted to keep it realistic.
 

·
Registered
Joined
·
4,139 Posts
At any rate it shows how much alpha a group of random stock pickers can generate. Relieving all parameters and constraints is the key.
 

·
Registered
Joined
·
18,291 Posts
At any rate it shows how much alpha a group of random stock pickers can generate. Relieving all parameters and constraints is the key.
I'm not sure that's what it demonstrates. It could be that in this particular time period (2 years) that growth stocks are simply doing much better than the broad index. That may not extend to longer time horizons.

Take a look at XCG, the iShares Canadian Growth ETF. For about 3 years now, it's done much better than the broad index. Here's a 2 year chart to match the timeline of our thread:

20683


XCG is doing very well over the last couple of years.

I never noticed this ETF before but now that I look at its holdings, it looks a lot like all my stock picks (both my 5 pack + growth picks). It seems to really duplicate all the stock picking I've been doing.

So I'm not sure the stock-picking is the real magic, but rather that we happen to be in a good period for growth stocks.

Now consider the period Jan 2007 - Jan 2014, a very long stretch (7 years). Here, XCG underperformed the TSX Composite by quite a bit. I also suspect that growth stock picks would have underperformed in that period.

So just because growth stocks have been having a good 3 or 4 years doesn't mean that growth stocks, or stock-picking like this, will always give outperformance vs XIC.
 

·
Registered
Joined
·
4,139 Posts
This list was for hot growth stocks not buy & hold. I would suggest an annual list be compiled to be effective or at least update the list annually...something like the big banks release their "Best ideas" every year.
 

·
Registered
Joined
·
3,288 Posts
This list was for hot growth stocks not buy & hold. I would suggest an annual list be compiled to be effective or at least update the list annually...something like the big banks release their "Best ideas" every year.
Ahhhh, OK, who knew !

My original take on this thread was for Canadian Growth stocks that were long term holds with low dividends (I use my own criterion of less than 2% dividend to define growth versus dividend stock in my portfolio).

This makes sense to me now when I see entries like Methonex and others that I consider traders (and of course it's at the bottom of the list). If this is for traders only, I would retract my suggestions that are really long term, low dividend, holds.

ltr
 

·
Registered
Joined
·
4,139 Posts
Well I'll let Pluto set the parameters or confirm them but many of these stocks need some close monitoring.
 

·
Registered
Joined
·
3,679 Posts
Discussion Starter #90
Well I'll let Pluto set the parameters or confirm them but many of these stocks need some close monitoring.
I included everything that was suggested. Some didn't fit the parameters but I included them anyway for a learning experience.
 

·
Registered
Joined
·
3,679 Posts
Discussion Starter #91
I included everything that was suggested. Some didn't fit the parameters but I included them anyway for a learning experience.
I don't get that XCG unperformed during any period since inception.
image_2020-10-05_074228.png
 

·
Registered
Joined
·
3,679 Posts
Discussion Starter #92
One issue that has arisen is, what is a growth stock? vs some other kind of stock. Often articles use the phrase "growth stock" in contrast to "value stock" as if a value stock can't have growth, and a growth stock can't have value. I don't get it. But I use the phrase "growth stock" as well. I suppose what I mean by it is a stock that is growing (in total return terms) at higher than average rate over many years.
 

·
Registered
Joined
·
3,288 Posts
One issue that has arisen is, what is a growth stock? vs some other kind of stock. Often articles use the phrase "growth stock" in contrast to "value stock" as if a value stock can't have growth, and a growth stock can't have value. I don't get it. But I use the phrase "growth stock" as well. I suppose what I mean by it is a stock that is growing (in total return terms) at higher than average rate over many years.
My definition is very close to Investopedia as shown below:

What Is a Growth Stock?
A growth stock is any share in a company that is anticipated to grow at a rate significantly above the average growth for the market. These stocks generally do not pay dividends. This is because the issuers of growth stocks are usually companies that want to reinvest any earnings they accrue in order to accelerate growth in the short term. When investors invest in growth stocks, they anticipate that they will earn money through capital gains when they eventually sell their shares in the future.

__

The 'value' trait doesn't come into my definition. In my own spreadsheet I tend to see any stock that pays below about 2% dividend as a growth stock. I am expecting the share price to provide a higher return than a stock that has a 5% dividend. Total return is what's important though.

ltr
 

·
Registered
Joined
·
3,679 Posts
Discussion Starter #94
My definition is very close to Investopedia as shown below:

What Is a Growth Stock?
A growth stock is any share in a company that is anticipated to grow at a rate significantly above the average growth for the market. These stocks generally do not pay dividends. This is because the issuers of growth stocks are usually companies that want to reinvest any earnings they accrue in order to accelerate growth in the short term. When investors invest in growth stocks, they anticipate that they will earn money through capital gains when they eventually sell their shares in the future.

__

The 'value' trait doesn't come into my definition. In my own spreadsheet I tend to see any stock that pays below about 2% dividend as a growth stock. I am expecting the share price to provide a higher return than a stock that has a 5% dividend. Total return is what's important though.

ltr
Well what if the stock that pays less than 2% dividend isn't growing? What if it's eps growth is zero?
 

·
Registered
Joined
·
3,679 Posts
Discussion Starter #96
^
OK so your criteria for a growth stock is more than just > 2% dividend. It seems you have additional criteria.
 

·
Registered
Joined
·
3,288 Posts
^
OK so your criteria for a growth stock is more than just > 2% dividend. It seems you have additional criteria.
Nope, I don't really have any other criteria to determine if it's a growth stock or not. Once I've established it's a growth stock, then it might be a growth stock that's doing well or a growth stock that doing poorly. Doesn't change what it is, it just tells me when to buy or sell a growth stock. That is the same with any type of stock, growth or dividend.

ltr
 

·
Registered
Joined
·
18,291 Posts
I don't get that XCG unperformed during any period since inception.
The TSX index has a hefty amount of dividends whereas growth stocks do not, so in your chart, the XCG line is probably accurate but the TSX line is not. Based on what I see at stockcharts, which is usually very reliable for this kind of thing, in the period Jan 2007 - Jan 2014, the cumulative increase of XCG in that period was 16% whereas XIC increased 23%.

Now that I look at it again, yeah, it's not much of a difference in performance even in that "bad" period.

XCG has done amazingly well ever since it started trading. This has recently made me wonder if I'm wasting time and energy with my stock-picking. Maybe I should replace my individual growth stock portfolio with XCG.
 

·
Registered
Joined
·
3,288 Posts
The TSX index has a hefty amount of dividends whereas growth stocks do not, so in your chart, the XCG line is probably accurate but the TSX line is not. Based on what I see at stockcharts, which is usually very reliable for this kind of thing, in the period Jan 2007 - Jan 2014, the cumulative increase of XCG in that period was 16% whereas XIC increased 23%.

Now that I look at it again, yeah, it's not much of a difference in performance even in that "bad" period.

XCG has done amazingly well ever since it started trading. This has recently made me wonder if I'm wasting time and energy with my stock-picking. Maybe I should replace my individual growth stock portfolio with XCG.
James, of course you're correct in that you must compare apples to apples, so it's a requirement to chart Total Return as you say. In that regard, XCG is fairly close to the index (XIC.TO) as you can see by the attached chart.

If I look at total return of XCG or XIC for the period starting when I switched from ETF's to individual stocks in 2011, I have easily beat both these ETF's in total return. I about 55% higher return over that period. With individual stocks and trying to beat the index, it's not suppose to be a blow out - it's a slow methodical gain each year in the 5%-10% range that builds and builds over time. That's how you beat the index.

This is exactly what I see from all the various schemes you have followed over the years and can't imagine why you would want to switch to an ETF and accept index returns when yours are so much higher?

20691


ltr
 

·
Registered
Joined
·
616 Posts
It's actually pretty sad for a so-called "growth" ETF to underperform the market.

Based on Portfolio Visualizer XCG.TO average 10-year rolling return is 4.91%, with a max of 6.49% and a min of 2.94%, while XIC.TO has an average of 5.89%, with a max of 7.79% and a min of 4.45%. Moreover, XCG.TO has 0.55% MER compared to 0.06% for XIC.TO...

One issue that has arisen is, what is a growth stock? vs some other kind of stock. Often articles use the phrase "growth stock" in contrast to "value stock" as if a value stock can't have growth, and a growth stock can't have value. I don't get it. But I use the phrase "growth stock" as well. I suppose what I mean by it is a stock that is growing (in total return terms) at higher than average rate over many years.
I also find the categorisation pretty confusing. In both cases, the goal is obviously to grow profits from the investment. This sums it up : Growth vs. value investing? Perhaps you should consider both approaches

In a few words :
  • "Growth" is a high-priced stock currently thriving because investors are expecting expansion and increasing earnings
  • "Value" is a low-priced stock which are expected to bounce back once investors recognise its value
 
81 - 100 of 111 Posts
Top