"Do you mind if I ask a few questions relating to your CSL...

"Do you mind if I ask a few questions relating to your CSL shareholding that I think will benefit other shareholders and the many people who like reading and learning in here."

@vic_wattle,

I'm not sure my sharing of my investment position on CSL will benefit other shareholders because I'm not sure anyone will have personal circumstances that are the same as mine; we are all unique as investors, with different ages, personalities, stages of life and therefore we have different investment objectives, philosophies, timeframes, risk appetite, requirement for capital growth or income, sensitivity to capital preservation.

But anyway, here goes:

"1. Have you been reducing your CSL holding in recent weeks/months?"

No, I tend to not sell stocks very often, and mostly only when my investment thesis is proven wrong, or some major changes in the company's circumstances occur (eg, an acquisition is made or a new technological or regulatory threat emerges, or the company in question falls into non-premium category (refer discussion under point 3 below)).

But when I do sell for reasons of perceived over-valuation - and I try to avoid doing so as much as possible, so it seldom occurs - it usually only happens roughly once a year anyway (close to the end of the financial year, when I assess my portfolio's overall shape and structure, alternative opportunities, and any significant potential capital gains tax liability).


"2. If yes, what percent portfolio allocation was CSL prior to you selling any, and what is the percent today?"

I don't know.

It's not something I monitor very closely, part of the reason being I'm a bit lazy and it requires some effort given my CSL shares are spread across a number of different entities. It's also information that, if I had it at hand at all times, would be of little use to me.

I usually see the total consolidated picture in June of each year.

But, at last update, it was around 7%, so if I was to guess, it might be 8% to 8.5% today, given the stock's good performance over the past 7 months.


"3. At what valuation metrics will your allocation drop below 5% (assuming it is above that today)?"

Don't know.

It will need to be viewed in the context of my portfolio positioning at annual review date, as well as potential alternative investments.

But even if I was to conduct a review today, I very much doubt I'd sell anyway, despite me thinking the stock is over-valued; because selling would crystalise a significant capital gains tax which would be value-neutral to me on an after-tax NTA basis even if the stock fell by something like 25% or 30%, I estimate.

Generally speaking, I'll happily sell out of deeply cyclical stocks (such as ABC, BLD, KOV, LYL) if I thought they were priced for the top of their business cycle; or out of less-than-premium, quality stocks which I had initially bought because they were excessively undervalued (eg., AUB, CGF, IFL, LNK, MVF, PTM, SDF, SDI, SSG, VUK) but were now overvalued, stocks or were subject to turnarounds (eg. ISD, ORG, TRS) which had duly occurred (or failed to occur as the case often is with these situations).

But for premium-quality, long duration growth businesses (APA, ARB, CAR, CSL, RHC, TCL, TNE, WES), selling is not something I ever really tend to think about.


"4. At what valuation metrics will your allocation reduce to 2.5%?"

N/A


5. At what valuation metrics will your allocation reduce to 0%?

N/A


6. Post any correction in the market value (assuming that may occur for whatever reason), what valuation metrics will you start reversing the process?

N/A


(See? Told you it was unlikely to be overly helpful.)