The All Ords and 5,000 (again)

The old thread was both long and old so I thought I would give it a brand new life.

It's been a rough 4 mths but we are back through 5,000 again. Personally, I don't think the volitility is over yet, so punters will need to keep a close watch on their eggs. I'm happy today though, my silver stock is up 12%, hence the post.

thommo

Coincidence...

I was thinking today , it had been a while since anyone had posted re shares .

I think the thought that the market might start sideways for a while , October seems the logical place.

See Change

A good day especially if you are holding CML which has helped todays gains.

Thinking of opening a margin loan account to supplememt my present investment, but don't think I will use it untill after the inevitable October correction.

What's inevitable about an October correction ???

Shares have really had a bad smell about them for 4 months.

Besides buying up some stuff after the initial drop, I've done nothing since. If this Middle East mess can stay quiet for a while maybe things can get moving. The latest inflation readings out of the US seem to be nothing to worry about.

Oil prices are good. They are about where they should be. Cheap oil just makes people waste what shouldn't be wasted. Plus it's good for the Aussie economy. We have huge energy wealth.

I'll predict the All Ords is at 5500 by years end.

See ya's.

House_Keeper said:

What's inevitable about an October correction ???

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A self fulfilling expectation.

See Change

XPJ (LPT index) has been creeping up of late.

I think its a sign of uncertainty (safer place to put money).

I put a moderate additional investment into this in April and another one early last week.

Whilst it may not outperform if the all ords does commence an upward swing I see XPJ having little downside and a lot of potential.

There will probably another run up for a few years until we see a real crash.

In the meantime business will get harder, profits will decrease, un-employement will rise, properties will be vacant, and you will sure see the dowside of the XPJ.

Nothing new really

For traders, sept/october is the time to short positions if it takes a dump with the 'self fulfilling expectations' and go long again after, however there are so many pressing, worrying long term problems with the US market and global inflation that ripples into the aust. mkt...makes me wonder if All Ords has the potential to breach 5,500 as forecasted by topcropper. I am looking to top up my holdings in late oct to mid nov provided that conditions don't deteriote in the US and middle east

I've noticed a few posters here from other forums perhaps...hmm...gotta get more sleep instead of reading till late night

sea change/ macca= do you contribute to reefcap ?

wish ga= smh SATC blog?

and i think a few from comsec chatrooms?

littlevixen said:

sea change/ macca= do you contribute to reefcap ?

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At times

See Change

we might see bhp rally up a bit before next weeks mega profit announcement ... how much will it rise depends a fair bit on how the 'strike in chile resolves (hopefully before the 23rd) ....
bhp was up last night in london so today may also see a 2-3% rise ...
why am I so concened because my options expire on the 24th and the share price hasn't go near the strike price !

RichardC said:

The old thread was both long and old so I thought I would give it a brand new life.

Click to expand...

Richard C.
imho...
For someone with very little share investment experience like myself
i'm still very happy with the market, and i agree with Topcropper
that the upward trend will continue and way above the 5500 mark
by the end of this year..all the banks we hold are still above my
expectations as with everything else we hold and all it will take
is another 15 cent redneck to fire up again like a few weeks ago.

good luck willair........

Little vixen,

<sea change/ macca= do you contribute to reefcap ?>

Guilty

Trogdor said:

XPJ (LPT index) has been creeping up of late.

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Yes it has, it was hanging around 1950-2000 for a long time and has finally managed to break the 2000 mark more than a day or two.

2100 at the moment, not bad at all.

EDIT - Also noticed your location is now London. PM me how it's all going and whether you're enjoying it so far.

House_Keeper said:

What's inevitable about an October correction ???

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Sorry
Inevitable may have been too harsh a description, But "usually" there is either a pull back or not much way of the way in gains in a lot of the octobers in the past.
It don't mean I will be doing anything different other than being a little more cautious around that time of year. ie: won't use the margin loan 'till after then

Greg

Beach Bum said:

There will probably another run up for a few years until we see a real crash.

In the meantime business will get harder, profits will decrease, un-employement will rise, properties will be vacant, and you will sure see the dowside of the XPJ.

Nothing new really

Click to expand...

Gday Beach Bum,

Interesting comments!

My thoughs...

You are pretty spot on (imho) about the usual economic cycle and our place in it.

When this occurs XAO will fall further than XPJ. Why? Because, rising costs, falling consumer spending, etc.. will hit bottom lines in a quite short time frame. Even for RIO, BHP etc.. a fall in commodity prices will cause the market to factor in the effect on profits once "locked in" sales contracts conclude. Coupled with this the yield on XAO is not that high now.

However for XPJ we are seeing 7 - 8% yield now. Interest rates and tenancies for most (or many) LPTs are locked in for 5, 10, whatever years. Economic effects will be "tempered" in the short term (again imho!)

If you re-invest distributions (for arguments sake) you can support a 7-8% fall in capital value for a year or two and still not be "down". At this time you would be able to DCA in more for a very, very cashflow positive (or high yielding) investment in XPJ.

In essence I see the high yielding nature of XPJ (higher than XAO or residential property or pretty much anything else) as a very very strong "safety net".

I do agree that there is some downside, but, I see at this stage in the economic cycle it is much smarter to commit new money to XPJ rather than XAO and would still prefer to add to XPJ rather than accumulate cash or pay down loans.

By the way I do hold more in Aussie + Int shares than I do in XPJ but am looking to close the gap in the medium term by accumulating XPJ at a faster rate than aussie + int shares.

FrankGrimes said:

PM me how it's all going and whether you're enjoying it so far.

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Just PMed you...

Hopefully when the jetlag wears off, and I stop waking up at 5am on my holidays I will stop posting drivel on here hehe...

Trogdor said:

By the way I do hold more in Aussie + Int shares than I do in XPJ but am looking to close the gap in the medium term by accumulating XPJ at a faster rate than aussie + int shares.

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How do you invest in tnhe XJP? As an index or do you have your favoured LPT's?

MJK

MJK said:

How do you invest in tnhe XJP? As an index or do you have your favoured LPT's?

MJK

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Hi MJK,

I personally use the UBS Property Securities fund for all my XPJ exposure, but this is a personal choice (very low MER comapred to peers, and long term performance history, no entry fees, no buy/sell spread).

In the future I also may consider the APN Property for Income Fund #2, but I dont have any of this one at present). They have higher MER and no real long term history so wont buy in until I have too much in UBS and uncomfortable holding more (nowhere near this yet).

I leverage to around 65% - 70%.

Basically - I like anything that isnt XPJ index - but rather is skewed away from "corporate" and development type earnings towards pure "rental" earnings (ie. lower on westfield, multiplex, etc..)

Hope this helps....

Trogdor said:

Hi MJK,

I personally use the UBS Property Securities fund for all my XPJ exposure, but this is a personal choice (very low MER comapred to peers, and long term performance history, no entry fees, no buy/sell spread).

In the future I also may consider the APN Property for Income Fund #2, but I dont have any of this one at present). They have higher MER and no real long term history so wont buy in until I have too much in UBS and uncomfortable holding more (nowhere near this yet).

I leverage to around 65% - 70%.

Basically - I like anything that isnt XPJ index - but rather is skewed away from "corporate" and development type earnings towards pure "rental" earnings (ie. lower on westfield, multiplex, etc..)

Hope this helps....

Click to expand...

Thanks for reply Trogdor,

Interesting I also have UBS & APN 2. APN 1 is closed to new investors but I undersstand that 2 is run with the same principles and is expected to perform as 1 so you could check 1's history I suppose.

Do you leverage into the LPTs with margin loan or LOC or both? 65%-70% is high LVR if through margin loan only.

What do you mean by "(ie. lower on westfield, multiplex, etc..)"

MJK