It seems a shame to let this post die so hopefully bongo won’t object if I introduce the Contra Broker Betfair High Risk Fund III.
A couple of changes:

I couldn’t find an easy to see list of all broker recommendations on the Hargreaves Lansdown website and didn’t want to click on every share individually. On the telegraph website here:

http://shares.telegraph.co.uk/indices/broker-recs/index/UKX

there is a full list showing recommendations. Unfortunately there were only 3 sell recommendations so I copy/pasted all companies into a spreadsheet and awarded points on the following basis:

Strong Buy –   20
Buy -          10
Neutral –       0
Sell -        -10
Strong Sell-  -20

I then added the scores and divided them to get an average. There were 12 companies with a negative average rating so I took these.

I have bought £1000 of shares in each company at tonight’s (13th September) closing prices. These are the stocks with their prices:



I also noticed that there were 11 companies with a “strong buy” rating (above 15) so thought it would be fun to track these as well:



The FTSE closed at 7379.1.

FTSE - 7379.1

Stock    Price

ADM.L    1812
PSON.L    590.5
ANTO.L    969
NXT.L    4417
CNA.L    191.8
FRES.L    1513
IHG.L    3794
KGF.L    289.6
MRW.L    245
BLT.L    1408.5
ITRK.L    4960
BRBY.L    1764

We'll stick to the same rules - ie fund to run for 6 months.

There's no easy way, unless you can write a script to parse the data.
I went through all 100 one at a time.

Just a quick one month update, and its a good start for the Contra Broker fund as it is up 3.12% compared to the FTSE's 2.11%!

Two of the stocks have had double digit returns in just one month (PSON & NXT - two of the stronger sells )

Okay, we're half way through the life of the Contra-Broker High Risk Fund III and after three months despite spending most of the time ahead of the FTSE benchmark, it has now slipped back below it.

Fund -  -0.11%
FTSE -  +0.48%

So the fund is 0.59% lower than the benchmark.



There is a wide disparity in performance of the individual stocks.

The Top 3:

PSON - +25.74%
IHG  - +18.21%
KGF  - +15.64%

The bottom 3:

CNA  - -27.69%
FRES - -14.01%
MRW  - -12.90%

A couple of sweet broker forecasts on the HL web-site today:

From the Bank of England on inflation
"it expects stronger wage growth than previously and that inflation is still forecast to be above the 2% target in three years' time"
Well, it depends how you measure it, but central banks have gotten quite good at getting close to their inflation targets since NZ pioneered the concept in the 1990s. Housing, if included, and energy are the biggest components in the index, and can you seriously expect costs to be higher for those?

And from David Madden at CMC markets
"traders [are] now pricing in a 100% probability of an interest rate rise from the BoE in August"
You will probably be right David, but would you give me 50/1 that you are wrong on this? August is only 6 months away, the BoE were unanimous today in keeping things put, and data from landlords came out this week showing a big increase in those struggling to pay the mortgage interest. Does the BoE want to start ratcheting up the pressure on people who provide a place to live for other people, and who aren't making any money out of doing so? Do they really want the labels that will go with that?

As always, time will tell, but imv go contra broker if you can.

Today marks the end of the 6 months for the Contra Broker High Risk Fund III – and it has some interesting results!





Despite the portfolio closely matching its benchmark (FTSE 100) for the first 5 months of the funds life, the last month has seen a real divergence :

Portfolio - +1.72%
Benchmark - -3.26%

Meaning that the fund has out-performed by 4.98%

Even more interesting is that the second fund I tracked which took the “strong buys” from the brokers recommended list actually underperformed the FTSE!







Portfolio -  -4.74%
Benchmark –  -3.26%

Meaning the fund underperformed by 1.48%

So to summarise, the fund of broker’s  “strong sells” outperformed the fund of broker’s “strong buys” by 6.46% in 6 months. Interesting results and ones that give more confirmation of Bongo’s theory that broker’s forecasts really are useless.

I will update the fund’s holdings when I get a chance and carry on the experiment to see how things go.

Okay, today is the start of the Contra Broker High Risk Fund IV – Using the same criteria to pick the fund constituents as above, throws up only six negative stocks. I have bought these using last night’s closing prices.



I have also once again created a new fund of the “strong buys” which contains eleven stocks:



The funds will again be run for six months.

The UK hasn't run a trade surplus since the 1990s. But the trend has been reversing of late. In round numbers we imported about £1.10 for every £1 exported between 2008 and 2016, but in the last 18 months this has dropped to around £1.06 for every £1 exported. There's quite a bit of monthly variation and it would only need a bad month in non-food retail, where most of what is sold is imported, and a bad month in factory investment ( all those German machine-tools not being bought ) to see imports drop a few % and the ONS to declare a slight trade surplus for the first time in 20 years.
I predict it will happen this year some time.
This is not a broker forecast, just my forecast.
The second part of the forecast is that all the smart ass mercantilists at Guido Fawkes will say this is good news. ( It isn't, it just makes proud brits feel good ).

investec anaylst said glencore is worth zero. price tanked from 108 to 67 that day. within 2 years it was up 500%. draw your own conclusions

That means that since I started doing this a year ago, the Contra Broker High Risk Fund (which takes the brokers forecasts “Strong Sells”) has out-performed the FTSE as a whole by 15.41%.

Portfolio    +14.08%
FTSE        -1.33%
Difference    +15.41%





In contrast, the Contra-Contra Brokers High Risk Fund (which takes the broker’s forecasts “Strong Buys”) has under-performed the FTSE as a whole by 5.82%.

Portfolio    -7.15%
FTSE        -1.33%
Difference    -5.82%




To quote Johnny Rotten at the end of the Sex Pistol’s  last ever concert – “Ever get the feeling you’ve been cheated!”

As before, the funds will run for 6 months (so will close 13th March 2019).

It will be interesting to see if the fund can outperform the benchmark FTSE yet again. I suspect it may perform badly during a big downturn - which we haven't seen yet.

Another 6 months gone and we have had our first reversal for the Contra Broker High Risk Fund (Brokers Strong Sells):

Benchmark    -1.68%
Portfolio    -6.14%
Difference    -4.46%

However, the Contra Contra Broker High Risk Fund has continued to show how useless the brokers strong buy recommendations are:

Benchmark    -1.68%
Portfolio    -11.12%
Difference    -9.44%

As you can tell by now, I am keeping this running for my own amusement but on the off-chance that anyone is interested here are the new picks to run from 13/03/2019 – 13/09/2019:

First the Contra Broker High Risk Fund VI:




And the Contra Contra Broker High Risk Fund IV:

Dr Crippen posted some time ago:-

"What bongo has established here is to be commended; yet it simply shows that share movements aren't driven simply by the fundamentals.

Because we can be sure that brokers forecasts are logical conclusions arrived at from studying the future prospects of a company and their current trading health.

By making forecasts they've simply done the footwork for us.

Which all goes to show that we need more than the simple fundamentals to guide us when investing in shares."

I have to take issue with the italicised statement for the following reason - these are free broker forecasts made widely available to the uneducated public, therefore the cynic might question the real motivation behind them. For example if a load of early investors wished to offload a ton of Bitcoin without tanking the market, it might suit their interests if the ignorant masses were somehow persuaded that Bitcoin was a good, safe, long-term investment. It also does the broker issuing the free forecasts no harm whatsoever if people trade on their recommendations, generating brokerage fees, then months later trade out again on the opposing recommendation.