This investor puts a lot of thought into his strategy -- and he's sharing it with us.
When an investor takes as considered an approach as today's featured investor does, it's always worth listening. This is why I've been taking a fresh look at a number of portfolios from people who make their living from investing.
Mark, aka "marben100", is well known on the Fool's discussion boards for his shrewd comments and careful approach.
When we last heard from Mark six months ago, his overall asset allocation looked like this:
|Investment type||% of portfolio|
|International with emerging market focus||17%|
At any given time, Mark has around 40% of his portfolio in approximately 10 investments, and the other 60% in 30 or so more.
His is an overall "top-down" strategy, which he readjusts according to his macro-economic view of the world.
A change of poker face
And his view of the world has changed a bit since we last looked at Mark's portfolio in early December, partly thanks to a poker tournament a couple of months ago. Mark found himself sitting next to an investment banker specialising in commodities. The banker was getting nervous about China due to what he perceived to be a huge over-spend on infrastructure development, which could, in turn, lead to a decrease in demand for base metals and similar commodities.
The conversation reinforced Mark's own thinking and caused a readjustment his strategy. Consequently, Mark cut back on natural resources exposure to 15%, refocusing on oil and gold investments, and put in place an option-based "insurance" strategy.
One of the first investments to get the chop was Regent Pacific, a Hong Kong-listed diversified mining group focused mainly on the Asian Pacific region. The discount to NAV had been coming down, and Mark's more pessimistic macro view for commodity prices meant he was happy to bank a profit.
He sees the next Chinese boom in demand coming from areas like machine tools and engineering, as industry in the country gears up to a more consumption-led economy.
Interestingly, Mark has an ambivalent view about markets now. He acknowledges that equities look cheap in general, but is also mindful of the potential for dire market conditions.
He makes provision for both eventualities by staying largely invested in equities, while having around 4% of his portfolio in a FTSE 100 covered warrant put option, which expires in September at a strike price of 5,250. His put-based strategy was initiated in February, and has already paid off following market declines since then, with his portfolio currently 9% up so far this year. Mark plans to review this position at the end of June, once the outcome and consequences of the Greek election are better known.
The puts insure Mark's portfolio against a big market fall resulting from eurozone, China and US election-induced tremors, while simultaneously giving him the confidence to stay largely invested in equities.
Mark's interest in commercial property fund manager First Property Group (LSE: FPO) remains largely unchanged since December, although the share price has decreased slightly to 16.5p.
The company's main income is derived from fund management fees, so the prospective price-to-earnings ratio of 6.6, the well covered yield of the same number, 6.6%, and NTAV of 15p per share remain the overall attraction here.
Coastal Energy (LSE: CEO), whose attractions were noted by my Foolish colleague Simon Murphy with the share price at 645p last September, is now Mark's biggest single investment.
With the shares now at 920p, Coastal has issued mainly positive news, but the price has still fallen along with everything else in the spring sales, so Mark has been adding on weakness.
Second on the marben100 hit-list is the European growth-focused HG Capital Trust (LSE: HGT). Mark added more in April. Now at 905p per share, a discount of 16.5% against the latest quoted basic NAV of 1,084.1p per share.
Mark is impressed by the Trust's excellent track record in growing the businesses it invests in and its openness and transparency with its investors. He shared his detailed thoughts on HGT on the ShareSoc website after attending the Trust's AGM.
He reduced his holding in Philippines-focused gold producer Medusa Mining (LSE: MML) after disappointing production figures, but again bought a few back on price weakness. The miner's shares are now 316.5p and are "still promising".
Mark is far less optimistic than he was about Brazil's macro prospects and reduced his exposure by half. He remains invested in both the JP Morgan Brazil Investment Trust (LSE: JPB) and Ocean Wilson (LSE: OCN), but at a much reduced level.
If you're interested in Mark's investments, you can now also follow his musings on Twitter via @marben100.
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> David doesn't own shares in any of the companies mentioned.